Gain Through Shorting

As we end of the first week of the year, I want to discuss stocks to avoid and even consider shorting early in the year. For the most part these are stocks that are overvalued or have a poor business outlook going forward. The one thing we know about the market in 2012 is that the volatility of the past year is likely to continue, and the gyrations should give us a chance to make money going up and coming down. Given the extreme global risks, it just makes sense to have a few chicken shorts on the books this year.

My first pick is a stock I have been short for some time, and I will probably keep rolling over my options positions until it falls or until the Mayans are proved correct about the end of the world. Apollo Group (APOL) is not rich in the numbers, but it is a company in a very bad business with poor prospects. The for-profit education industry has been described by several fund managers as one of the worst in the nation. Hedge fund manager Steve Eisman has been among the most vocal critics of the industry, pointing out that the default and dropout rates are too high and the schools' revenues are too reliant on federal loan guarantees....487 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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