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Jim Cramer: Richard, in Columbus, Ohio, does short interest ever affect your decision holding a stock? You don't, if we were more trading oriented it would, I think that we look at it to see whether people are betting against us. So Five Below, which obviously has a lot of shorts seems to really go crazy. That's when I look at, and then the one that is most problematic, I got to tell you, the shorts are just in this Amgen, they kill it. So I look, I look, it's part of the panoply

Jeff Marks: Well remember that one quarter, two quarters ago from Palo Alto networks. It was a good result and this is before it really got its footing. But the shorts just completely took control of that quarter off a really good result. We saw it rally and then I think it ended flat. This is probably back in, you know, 60 points ago, 70 points ago. In the 170's, back last November.

Jim Cramer: So we have conviction or else we wouldn't own these stocks.

Jeff Marks: You also get the opportunity for a short squeeze, which is always a, you know, so if you're very positive on the fundamentals and it hits, you're going to get that benefit.

Jim Cramer: Exactly right. It can be wind at your back.

Does Short Interest Affect Your Decisions in Holding a Stock?

During Jim Cramer's members-only Action Alerts PLUS monthly call, he was asked "does short interest ever affect your decision holding a stock?" 

"You know" he told Action Alerts PLUS senior analyst Jeff Marks.  "...if we were more trading oriented it would, I think that we look at it to see whether people are betting against us." said Cramer.

Marks added, "Well remember that one quarter, two quarters ago from Palo Alto networks. It was a good result and this is before it really got its footing."

TheStreet Explains.  Short interest is the number of stock shares that are sold short, but not covered or closed out. Short interest can give you an indication of just how bearish investors are toward a given stock's price. Short sellers are betting that a stock is going to decline from current levels, allowing them to sell their  shares at a profit after a pre-determined interval.

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