Buffett Watch: Squeezing the Shorts
Updated with stock prices.
Warren Buffett, the billionaire head of Berkshire Hathaway (BRK.A), is the second-richest man in the world, after Bill Gates and ahead of Carlos Slim Helu. He is considered one of the leading value investors, and although Berkshire has taken a major hit recently, over the years it has performed extremely well. An $8,200 investment in the company in January of 1990 would now be worth more than $86,000.
So it makes you wonder why traders would short the stocks that Buffett chose for his Berkshire portfolio. Since many of his stocks have dropped and some are heavily shorted, there may be some short-squeeze opportunities to take advantage of.
A short squeeze takes place when short sellers quickly buy in shares of the stock in order to cover their positions, driving the price of stocks up sharply. The ratio for measuring short squeeze opportunities is the short ratio, which is the number of days it would take the short sellers to cover their position based on recent average daily volume.Stockpickr has reviewed the stocks owned by Warren Buffett and their short ratios and has compiled with a portfolio of the Top Buffett Short-Squeeze Plays. To read more, visit Stockpickr.com.
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