The tell-tale signs of a share-price tumble

Learning the tricks of traders out to profit from share price falls can make you a better investor. Phil Oakley explains what makes a company a target.

Short sellers look to profit from falling share prices. They borrow a share from an existing owner paying a fee to do so and then sell it. They then hope to buy the share back at a cheaper price later and make a profit.

Short selling is a hard way to make money and is very risky. That's because share prices can only fall to zero, limiting the potential gains. As share prices theoretically can go higher and higher, the losses for short sellers are potentially unlimited.

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Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.