The Tenth Wishes You'd Lost More

A variation of an old poker joke is that when it comes to telling other people your "bad beat stores," or when you are mathematically favored to win a hand before it is completed but an opponent defies the long odds and beats you, you are better off keeping it to yourself because nine out of ten people don't care about your bad beat...and the tenth person wishes you had lost more in the hand. 

The moral of the story is that there is very little sympathy, and appropriately so, for a speculator or gambler. 

And similar comments apply to short-selling in the markets; All traders, really. But especially shorts who wake up to untimely news in a given stock which promptly rips their proverbial faces off in the way of a surge higher. 

A line of thinking out there is that short-selling is "evil," anti-American, and should be outlawed. This view is misguided, at best, and overlooks both the liquidity shorts offer to markets, as well as exposing the excesses in the system, or worse, such as what Jim Chanos was able to do with Enron. 

Another view is that shorting is inherently a foolish bet, since markets seemingly always go up over the long run, and your risk of loss is infinite, since the stock you are shorting can theoretically rise forever. This view holds a bit more water, but is too sweeping--If a given trader has a specific timeframe and manages risk effectively with a firm cover-stop then "short-and-hold" is not as applicable. 

Applied to the current market, shorts have had major issues holding the market down for any period of time, even with the stars aligned. This is an observation we have noted before.

But to update that observation and advance it given today's market, the software sector in tech is heating up and could easily see even more M&A activity, which means a savvy short should likely stay away for now. There are other parts of the market which offer much lower risk shorts, if you must press here.  

Recalling that the tenth person wishes you would have lost more in your "bad beat story," and the lack of sympathy for any plight of the bear, the software sector (looking at the action in CVLT ZEN, e.g. after the DWRE buyout) is simply too much risk for any prudent short to fool around with for now.