These 16 stocks are a short seller’s dream — likely losers no matter what the market does

Certain stocks are bully bets to lag the marketplace successful the coming months, according to a caller study, careless of what the marketplace does. Sixteen of these stocks are listed successful a array astatine the extremity of this column.

Short sellers person bully likelihood of turning a nett with these equities — adjacent if the Iran struggle is soon resolved, lipid prices decline, U.S. involvement rates are cut, oregon immoderate different events that are apt to marque the marketplace soar transpire.

• Is Trump losing his grip connected the banal market? Sustained declines suggest the president’s power has waned.

• Microsoft’s banal hasn’t been this oversold successful a decade, with the tech elephantine ‘really losing the AI narrative’

• U.S. endures weakest Treasury auctions successful implicit 3 years arsenic anxiousness astir Iran warfare grows

• ‘He didn’t look precise alert’: Our CPA said we beryllium the IRS $443, but we’re really owed a refund of $637. Do we occurrence him?

• My member says lawyers tin get him a Medicaid nursing location successful Florida for a ‘hefty fee,’ contempt his assets. Is this a scam?

The 16 stocks listed beneath earned their spot due to the fact that their shares are costly to get successful the share-lending market. That means comparatively fewer abbreviated sellers are consenting to see them, which successful crook means that they astir apt are trading for much than they would otherwise. And that means their banal terms is much apt to decline.

The caller survey finds that adjacent aft paying these stocks’ precocious borrowing costs, a abbreviated seller has a bully accidental of profiting from specified stocks. Consider the unspeakable show of a hypothetical portfolio containing stocks whose borrowing costs exceeded 50% annually. From January 2010 to June 2025, this portfolio lagged the wide marketplace by 81.4% annualized.

Unfortunately, a abbreviated seller couldn’t person turned a nett with these stocks, due to the fact that the 81.4% antagonistic alpha didn’t bespeak borrowing costs. Once those costs are taken into account, a abbreviated seller’s imaginable nett shrinks to zero, successful fact. Still, this effect shows the grade to which hard-to-short stocks are hugely overvalued, connected average.

Yet the study’s researchers recovered a mode for abbreviated sellers to profit: Focus connected stocks whose borrowing costs are high, but not higher than 50%. Specifically, they constructed different portfolio that sold abbreviated stocks whose annualized borrowing costs were betwixt 10% and 50%. Between January 2010 and mid-2025, this portfolio bushed the wide marketplace by 22% annualized connected a risk-adjusted basis, with an mean holding play of each banal of astir six months.

Note cautiously that you should not expect a portfolio of specified stocks to diminution immediately. The 23 hard-to-short stocks I listed successful 1 of my December 2025 columns, for example, person since declined lone moderately.