A rising tide lifts all boats — even the most unseaworthy ones — and that makes a raging bull market a terrible time to be a short seller.
Even after the recent stumble, U.S. equity markets are on fire this year. The S&P 500 has generated a total return (that’s price appreciation plus dividends) of 17.6% for the year-to-date as of Aug. 21. On a price basis alone, the Nasdaq Composite is up more than 20%.
That long-and-strong performance is naturally crushing short sellers — those punters who are betting on the market or individual stocks to go down. In fact, the shellacking they’re taking is rapidly becoming one of historical proportions. According to an analysis by The Wall Street Journal, short sellers are suffering their worst losses in at least a decade.
Get this — the short sellers’ calls have been so bad, they could hardly have done worse if they tried to lose money. As WSJ reports:
“In the Russell 3000 index, the 100 most heavily shorted stocks are sharply outperforming the average returns of stocks in the index, according to a Journal analysis of data provided by S&P Capital IQ. The shorted stocks are up by an average of 33.8% through Aug. 16, versus 18.3% for all stocks in the index.”
Of course some shorts have been much more painful than others. With that in mind, here are five soaring stocks crushing short sellers: