Investors who have shorted stocks in recent years have gotten clobbered due to the five-year bull market.
At the end of December, according to Bespoke Investment Group, not a single S&P 1500 sector had more than 8% short interest as a percentage of float; that’s the first time this has happened since 2007.
The contrarian in me thinks now’s the time to go short when everybody’s long. However, as they say, the trend is your friend. For this reason I’ve picked three (out of a list of 26) heavily shorted stocks to buy now that I expect to provide market-beating returns in 2014 and beyond.