Hedge Funds Hunt Frothy Names to Short, Even After GameStop
- Managers are finding more opportunities outside of the U.S.
- They anticipate more dispersion and benchmark-beating returns
This article is for subscribers only.
Many hedge fund stock-pickers who rang up benchmark-beating returns in 2020 expect to repeat that feat for a second straight year, even after the Reddit rabble-rousers bloodied some short sellers.
They’re betting that rock-bottom interest rates, government stimulus and vaccine rollouts will push stocks higher. And they see irrational exuberance from retail investors creating a target-rich environment on the short side, too, after stocks like GameStop Corp. and AMC Entertainment Holdings Inc. rocketed to heights that quickly proved to be unsustainable.