Short Story: Cold Market Is Just Right for Bears

An analyst's prediction last week that shares of FreeMarkets (FMKT Quote) could quintuple partly on the strength of short-covering probably should surprise nobody.

"There's still an overhang of the belief that it's a good sign to be long stocks with heavy short positions," says David Tice, portfolio manager of the Prudent Bear Fund. "But it's a game that's dangerous to play, especially in a bear market."

The episode is a predictable byproduct of the growing flight to the short side among investors, analysts said, a trend that further clouds the market's already murky waters.

Short on Logic

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