As we thrust ourselves into the shortest calendar month of the year, am I the only one hungry for a short stack of pancakes and a bowl of strawberry shortcake? Life is short. Attention spans are shorter. And wasn't it the great market philosopher Bart Simpson who once said, "Eat my shorts, dude"?

Well, the market hasn't been eating the shorts over the past three years. It's fed them, actually. Taking a bearish slant on the market has proven to be quite profitable. I don't think it will be so easy to profit from the pessimism this year. Even if all of the pieces aren't exactly in place for an economic recovery, I see some downtrodden stocks with a good chance of bouncing back in 2003. But just as select stocks have risen over the past few years, there will be stocks that tank even if the market does regain its winning ways.

No matter which way the market is streaming, there will always be some equity salmon flowing against the current. To be honest, fishing for salmon in the small-cap pond isn't easy. Since you're dealing with generally obscure or undiscovered companies, it's not like the well-stocked waters over at the Blue Chip Lake. But, yes, there are still some small caps that could very well get even smaller. Here are three such cases. I promise to practice "cash-and-release" here. Grab a line. Let's go.

But please keep in mind one thing as we set out on our journey. Selling stocks short presents its own set of risks and is for experienced investors only. To learn more, enjoy our Shorting Stocks special!

Ambassadors International (Nasdaq: AMIE)
Talk about your bad breaks in the corporate gene pool. Ambassadors organizes trade shows and conventions at a time when business travel is the first line item to get whacked off company budgets and the soft economy isn't motivating too many students and adults to take the company up on its educational travel treks. That's a business plan ripe for plucking out of the water, even if the word "bass" wasn't wedged into its corporate moniker.

The company spun off its healthier Ambassadors Group (Nasdaq: EPAX) subsidiary last year, which has only helped bring attention to falling revenue in 2002 and projections for a dip in profits for the next fiscal year. Is Ambassadors International really worth more than 50 times next year's earnings given its suspect prospects and business lines? If you think so, maybe the company can offer you a travel package to Opposite Land.

Connecticut Water Services (Nasdaq: CTWS)
Shorting a utility for a long period of time can be painful, especially when it comes with a streak of hiking its dividend for 33 consecutive years. But if a short can handle the quarterly payout trickle, there are a few reasons to consider betting against this provider of water utility services to nearly 300,000 residents in Connecticut and Massachusetts.

Earnings over the 12 months leading through September have come in lower than the four previous quarters. What's even more intriguing is that the September period included a one-time gain following a land contribution in July. The 3% yield isn't much but it's still nearly three-quarters of what the company has earned. I realize that utilities play this way, but with interest rates likely to trend higher down the road and the debt-laden utility with little wiggle room to keep hiking its dividend, would I be justified in saying that the company may be all wet? 

ProxyMed (Nasdaq: PILL)
If you go by ticker symbols alone, this would be one bitter pill to swallow. With the company's acquisition of MedUnite last year, it not only became a marriage of two companies with an aversion to spaces between corporate monikers but also the country's second-largest physician claims clearinghouse.

But there is a problem. MedUnite may be producing superior gross margins than ProxyMed, but it's losing money and will continue to be a drain on the consolidated company's cash flow through at least the end of the year. The end result is that, after a loss in 2001 and a projected $0.22-a-share profit in 2002, the company looks like it will barely breakeven in 2003. So while ProxyMed has seen its shares halved since its summer highs, when earnings flatline this way it's anyone's guess as to what company we'll see in 2004.

In closing
I'll admit these aren't the juicy shorting morsels that sat like fat targets three years ago. In running screens for high-priced, low-growth opportunities, I actually found few compelling shorts. The market's thumping has taken its toll. But wasn't it also the same Bart Simpson who had some sage advice when he recommended shorts to not "have a cow, man?" And these situations certainly aren't cash cows. A rotting sector and one that may be potentially obsolete? A stagnant utility and a medical marriage that just isn't going anywhere?

When you're fishing for shorts, here in the shortest month of the year, you'll always find willing bait nibblers. You just need to have the patience -- and risk tolerance -- to know when to pull in the line.

[Want more on shorting? This month's issue of The Motley Fool Select is all about it. Look for it hot off the Internet presses February 20.]

Rick Aristotle Munarriz wrote this article from his home. Granted, he did take a break to walk around the block for inspiration. Rick's stock holdings, which includes Netflix, can be viewed online, as can the Fool's disclosure policy.