At any point in time the value picks are far outnumbered by shorting opportunities. This is because 1. more companies fail than succeed (even fewer beat cost of capital) and 2. there are multiple institutional biases against shorting. Although the path from identifying the short candidates and the execution of the trade leading to capitulation can be torturous. Following are three, non exclusive, frameworks for identifying shorts: Kathryn Stanley Trail Signs / Triggers Management lying or obscuring events Accounting Gimmickry Inflated stock price / speculative bubble Insider sleaze Deteriorating macro environment for the company Stellar price rise Cash burn / Deteriorating balance sheet Scott Fearon / James Montier Trail Signs / Triggers Fraud (Bad Managers) Overvaluation Fad (Bad Companies) Deteriorating Fundamentals Failure ...