Investors bold enough to short companies should seek targets in industries that could go away entirely like video rental stores or pager companies, said Scott Fearon, author of ‘Dead Companies Walking: How A Hedge Fund Manager Finds Opportunity in Unexpected Places. Although he avoids shorting high profile companies, Fearon said that JC Penney and Sears will have difficult times regaining their standing in the retail industry and that Herbalife’s product is questionable. On the long side Fearon is bullish on homebuilders Green Brick Partners and LGI Homes. He is also positive on Core-Mark which distributes food and snacks to convenience stores in San Francisco.
Unlike most investors, who live in fear of failure, Scott Fearon actively seeks it out. He has earned millions of dollars for his hedge fund over the last thirty years shorting the stocks of businesses he believed were on their way to bankruptcy. In