7 of Wall Street's Most Heavily Shorted Stocks

7 of Wall Street's Most Heavily Shorted Stocks

"Short interest" is one of the most interesting pieces of stock data that you might pay little or no attention to. But this little metric of negative sentiment, while popular among traders, can be valuable even to buy-and-hold investors who never want to place a single bearish bet.

If you believe a stock will rise, you buy it. Easy. But what if you're bearish on a company's prospects and want to profit off that belief? A popular technique is short selling: To sell a stock short, you borrow shares so you can immediately turn around and sell them. You wait for shares to fall in price, then buy them back and return those shares to the lender. Your profit is the difference between the price you sold and the price you bought back.

But that gamble can go wrong - to the delight of bullish investors. Short sellers incur losses when the stock's price goes higher. Also, time is against you when you short a stock, because you pay interest when you borrow shares. If you want to exit your short trade, you have to buy back shares, which in turn drives the stock price higher. That might force other short sellers to cut their losses, leading to a virtuous cycle of buying called a "short squeeze."

That's why short interest (how many shares are currently sold short to bet against a company) matters. There's no concrete level, but anything above 10% of the float, which is the number of shares available for public trading, is worth watching. If you're a conservative, buy-and-hold investor who hates volatility, you might want to avoid stocks with high short interest. If you're an aggressive investor, however, you might consider buying these stocks in the hope that a small bit of positive news will trigger a short squeeze, netting large returns in a short time.

Here, we'll look at seven heavily shorted stocks to watch. These companies have short interest ranging anywhere from 14% to 96%, and many of them are the kinds of hot-moving growth stocks that are typical among short-selling targets.

SEE ALSO: The 20 Best Stocks to Buy for 2020

Read more: https://www.kiplinger.com/slideshow/investing/T052-S001-7-of-wall-streets-most-heavily-shorted-stocks/index.html

16 Stocks Warren Buffett Is Buying and Selling

16 Stocks Warren Buffett Is Buying and Selling

Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B), oversaw a fairly busy fourth quarter of buying and selling stocks. Berkshire made new investments in the retail and biotechnology sectors, all but dumped a couple of big names and even jumped on the index-investing bandwagon.

We know what the greatest long-term investor of all time has been doing because the U.S. Securities and Exchange Commission requires all investment managers with more than $100 million in assets to file a Form 13F quarterly to disclose any changes in share ownership. These filings add an important level of transparency to the stock market and give Buffett-ologists a chance to get a bead on what he's thinking.

When Buffett starts a new stake in some company, or adds to an existing one, investors take that as a vote of confidence. On the other hand, if he pares his holdings in a stock, it can spark investors to rethink their own investments.

Here's the scorecard for what Berkshire Hathaway bought and sold during the three months ended Dec. 31, 2019, based on the most recent 13F that the company filed on Feb. 14. And remember: Not all "Warren Buffett stocks" are actually his picks. Some smaller positions are believed to be handled by lieutenants Ted Weschler and Todd Combs.

SEE ALSO: Every Warren Buffett Stock Ranked: The Berkshire Hathaway Portfolio

Read more: https://www.kiplinger.com/slideshow/investing/T052-S001-16-stocks-warren-buffett-is-buying-selling-2019-q4/index.html

Play the Retirement Flash Card Game

Play the Retirement Flash Card Game

What does retirement look like for you?

To help answer that all-important question, check out a game that Charles Schwab has cooked up. Here's how it works, according to the game's designers: "The Next Chapter is a fun, thought-provoking card game designed to help you picture what you want in your golden years, so that you can start working to make those dreams a reality. Play solo or with your spouse, family or friends by answering questions like ... 'Which long-lost friend would you like to reconnect with?' or 'What moment in your life would you keep framed by your bed?' Not only will your answers tell you a lot about yourself and your friends, they'll also help you visualize your future."

Here are 20 questions pulled from the deck to get you started. For the rest, visit https://content.schwab.com/thenextchapter/ to order your complete set (it's free), or download one and get started planning The Next Chapter.

Written by Joe Vietri, who has been with Charles Schwab for more than 20 years. In his current role, he leads Schwab's branch network, managing more than 2,000 employees in more than 300 branches throughout the country.

Read more: https://www.kiplinger.com/slideshow/retirement/T047-S014-play-the-retirement-flash-card-game/index.html

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