Perfect Shorts produces and publishes alerts on the shares of companies that are identified that have a high probability of going to zero. The alerts are utilized to trade put options on the underlying shares of a perfect short candidate. The alerts are sent directly to an online broker who executes the orders for the purchase of put options for the behalf of the subscriber.
A key characteristic of a perfect short is that its shares have buy recommendations by one or more Wall Street analysts. Another characteristic for a perfect short is its being diagnosed with one or more of the following:
- The EPS Syndrome
- Cashless earnings
- Severe negative cash flow
The “perfect short” designation began to evolve in 2002 when BullsNBear’s Director of Research, Michael Markowski discovered operational-cashflow per share (OPS) anomalies after he conducted a post-mortem on bankrupt Enron’s Financial Statements. Further back testing led Mr. Markowski to discover more than 100 public companies prior to Enron that had gone bankrupt after having the exact same OPS anomaly. Markowski also discovered Suprema Specialties, which became the poster child for the anomaly. Within weeks Suprema had completed a $50 million secondary financing and had reported record EPS for its 15th consecutive quarter the company had filed for bankruptcy.
- Have weak cash flow business models which were subsidized during a bull market.
- More difficult to raise capital during a bear market.
The table below lists Mr. Markowski’s media verifiable perfect shorts for which Wall Street analysts had buy recommendations. Information about secular bull and bear markets available under the Secular Bull & Bear Markets research tab.
Media Verified Perfect Shorts 2002-2012
*rescued from 2008 crash
Perfect Short Research is the ideal short research product for an investor to capitalize from during a secular bear market. The achilles’ heel for a company that meets the qualifications of a perfect short is its negative cash flow. Thus, a perfect Short is defenseless during a secular bear market since raising additional capital becomes increasingly difficult. This enables traders of put and call options to have the level of CONVICTION that is needed to stay in the trade and to also parlay his or her profit. For example, while Mr. Markowski was the author of The OPS Newsletter, a subscriber was able to deploy a strategy that enabled him to make a 20X multiple on his investment in less than 24 months.
For access to the research page for Perfect Shorts go to Negative Cash Flow Research page.