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What makes short selling structurally more difficult and hazardous than long investing?

Replied bySir Paul Marshall

Co-Founder, Chairman & CIO at Marshall Wace

Niche: Finance

Revenue: Not Publicly Disclosed/month

Location: London, England, United Kingdom

Started: 1997

Short selling is fraught with structural hurdles because capital markets naturally tilt long. When a short position declines in value, position sizing expands against you, borrow fees can become exorbitantly expensive, and you compete against sophisticated hedge funds. However, successful shorting provides invaluable alpha and funds long growth positions.

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