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10 Stocks to Buy as Short Sellers Swarm


The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage

NEW YORK ( Zenpenny) -- Human beings enjoy picking on others as long as it can be done with some measure of privacy. Internet forums of various sorts have proven this time and time again. How many times do you hear individuals being loving and understanding as opposed to angry and confrontational? The anonymity of the Internet gives human beings the power to avoid their greatest fear. That is the fear of direct, face-to-face confrontation where real thoughts are expressed with fluidity.

The financial markets can also serve as a venue for expressing our passion, as human beings, for anonymous aggression. This is after all a zero-sum game. For every dollar you make, somebody is on the other side of your trade losing a dollar. That Ferrari that your investment in Google bought you came at the expense of a guy who had his Ferrari repossessed by shorting Google.

Joy is bought and misery is sold on a daily basis. Unbeknownst to market participants, the investments you are making can become like a shove in the chest to a guy who is taking the opposite side of your trade. If we were to personify the markets it is nothing more than a Battle Royale: steel chairs, closed fists and mayhem on a minute-by-minute basis.

There is no group I enjoy picking on more than short sellers. It's not because I am opposed to short selling. I have sold short stocks many times in the past and will continue to do so. What makes brawling with short sellers so appealing is the fact that a majority of them are traders at heart. When any stock is dominated by traders, the footprints that stock tends to leave become all the more transparent. You can sniff out its intentions well before it gets to its destination.

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They will sell short into failed patterns and pile on as the stock continues to move lower. Weak markets make them more aggressive. A bearish liquor of sorts is passed amongst them. They literally swarm like an army of angry ants on a hapless caterpillar that has stumbled into their den.

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