It depends on a lot of factors. A big one is how long do you intend to short them? Do you think they're going to continue to fall or file for bankruptcy in that time period? Would the return be big enough to justify shorting a bad stock instead of investing in a good one? It could take a long time for a company to fail, so you have to ask yourself how long you want to hold the short position.

Does your brokerage charge margin interest on short sales? A lot of them do, since they have to borrow the stock for you to short it.

If you do decide to short any of these stocks, check the dates for their next earnings releases and look for clues as to whether or not they'll meet analyst expectations. That is where you will see larger swings in the share price that could boost (or kill) your return.

As far as just opinions on the stocks, I do agree with you. Best Buy and Barnes & Noble both need some restructuring or re-branding of their company (or both) in order to turn things around. I'm not sold on Groupon either. They have shown some great growth, but they haven't been able to turn it into increasing profits and with the heavy competition in the daily-deal websites, I don't think they have a ton of potential for increasing in size.

Here's a Smart Money/WSJ article from today. Have you seen this already, or is it just a coincidence?

3 Stocks Short-Sellers Are Targeting

Groupon is an eventual zero.

I like shorting newer chinese companies after a big climb. A whole lot of scams coming out of there with many shorting opportunities.

I am still looking to short apple. They have had a parabolic rise, only one way that ends. Waiting for them to fail a trend line then i will short. I may get forced out a few times but i want to be in on that blow off.

Don't watch the chart on that one. Apple's eventual pullback will be based on real events like a product flop or credible competitor in the smartphone/tablet arena that significantly reduces their margins and market share. Once it does happen, there will be a killing to be made in shorts and puts.

I'm long in Apple because I don't think either of those things are going to happen until 2013 at the earliest and more likely a few years after that. The market that Apple sells in is still growing at an incredible rate so even if they lose market share it is possible to continue sales and earnings growth on the simple fact that the pie is getting bigger and bigger.

My sign will be when a competitor comes out with a phone or tablet with the same kind of mass appeal as the iPhone/iPad. It needs to be a sea change event though as Apple is trading at only 17 times earnings and simply doesn't need massive double digit growth to justify their current price.

It's not like when Microsoft went parabolic in the late 90's on the pc boom and was trading as high as 35 times earnings.

Have you considered Put Options instead?

That's another way to bet against a stock. The minimum for most brokers is a single contract.

They are "risky" in the sense that they can become worthless quickly but your exposure is limited to your initial investment and there is no interest costs. The premiums can be expensive though in % terms.

I've had a couple winners and a couple losers doing options while I was messing with them last year. I'm convinced it's not a good general strategy but if you have a stock you feel EXTREMELY bullish or bearish they are a good tool.

Again, that is a very dangerous statement to make. There are plenty of stocks out there that grow and rise in stock price very quickly and never see a significant pullback, other than normal market fluctuations. If you don't see a fundamental reason why a stock will fall, assuming it will because it has risen quickly is not smart. It's no smarter than buying a stock that dropped 50% and assuming it's going to climb back up, without looking to see if the company is on the brink of bancrupcy. You're just guessing at that point.

As far as Apple's problems, I think you're nit picking trying to find justification for a short position. Apple knew Jobs was in poor health and had plenty of time to prepare for his departure from the company. They have plenty of products in the pipeline and their top executives have been there for a long time. It's not like they just revamped the entire structure of the company after Jobs died. Thinking that they're going to change, "and usually not for the better", when there is no indication that they will, is just gambling. You may as well go to Vegas and put your money on red.

Subsidized iPhones? That doesn't make any difference. That's how the phone industry works, and that's how their pricing models are setup. Apple still has net margins nearly twice the industry average and they haven't seen any indication of dropping due to competition. It doesn't matter if they're subsidized off an MSRP that noone ever pays. You have to look at their revenues and earnings, which are much stronger than any of their competitors.

As far as the comparison to housing bubbles and tech stocks, it's an excellent example of why Apple is fundamentally strong and should not be shorted. Tech stocks in the 90's were seeing P/E's in the hundreds and even thousands. They weren't profitable, had tiny revenues, and were being run-up in price without the growth to support it. Investors were ignoring the fact that they were strongly overvalued because they hoped the industry would boom. Apple is the exact opposite. They are undervalued by at least 10% using any normal means of valuation. Their P/E is extremely reasonable and falling, which shows that their earnings are growing faster than their share price. They have huge amounts of cash on hand, well established leadership and new products in development.

When I am screening for new stocks using mutliple factors to find undervalued companies, Apple continues to come up at the top of every screen, even at a price of $620-$630. If their earnings continue at their current pace, a price of $800 or so is still a great value. In my opinion, they're one of the strongest companies in the US, and will continue to be for the next 3-4 years at least.

You need to understand the difference between a bubble, and price increases that are supported by company fundamentals. Anyone who does would not logically compare Apple to any of the tech stocks of the 90's. Expecting to short Apple is just not supported by any sound investment theory other than speculation and gambling.

short AAPL at 617.

Apple is still in Jobs' last product cycle. We will have to wait and see if his successor have the same vision, and more importantly, the same drive to that vision.

Everything is a potential short.

For RIMM, I see it going sideways for a while. I think it is going to trade between about 12.60 and 13.40 for awhile. Until BB10 comes out, after that it depends on the markets reaction, if BB10 is a hit RIMM could be a buy.

I would be more inclined to go long rimm than short, if i were to invest in them.

Here's a better question: Why ban short selling? What makes it unethical to short a stock? It's a voluntary transaction between 2 parties. And what could short sellers possibly be doing to "destroy the economy"? If a stock is fundamentally weak, the price is going to fall anyways. Shorting the stock does nothing to change the value of the stock, it just gives you an opportunity to earn a return when the price does the inevitable.

The free market demands a mechanism to short stocks. Banning that is just another form of government intervention. You can ban short selling if you want, but investors will find another way to do the same thing. Look at put options, basically the same type of investment as a short.

Think about what you're doing when you short a stock: You are borrowing the shares from another lender who is completely willing to loan them to you, and then selling them. You have an obligation to repay those shares at a later date. What exactly is immoral with that? And what improvement will banning short sales add? Does the SEC really need to prevent investors from voluntarily loaning shares to other investors? There's no evidence or logic to support the idea that short selling is harmful to the economy. I would guess it has the opposite effect in reality: shorting most likely provides more liquidity and volume, which would drive prices closer to what they are fundamentally valued at when they are overbought.

For what it's worth, I agree with your strategy to invest in companies you believe in. I rarely short stocks because I think the better long term strategy is to buy good, quality companies and hold them for a long time. But I don't think we should ban investment vehicles simply because they don't fit into my strategy.

Still short aapl, put stops down. Plan on going down to 550ish but likely hood is low. Lowering volume is not good for further downside which is why I put in some stops.

Asking the moral or ethical value of shorting a stock is the exact same as asking it of going long in a stock. In both cases you are doing the exact same thing, trying to predict stock price movement based on forward valuation. Everyone can apply upward pressure on a stock by buying it. If you couldn't short it then they only way to sell it is if you already own it, so which method provides true price discovery? One where everyone can participate or one where only some can participate.

Also short sellers are the only ones buying the stock your selling after an event causes a big drop in price. Believe it or not short sellers save you money when they cover, who else is buying a dropping stock?

Also as someone earlier mentioned short sellers have uncovered some big scams. Always a good idea to read and listen to short sellers even if you dont sell short yourself.

Did your stops trigger today?