Seeing a stock with mounting short interest can be intimidating, especially if it's a stock you already own or are looking to own. What do the bears know? Why are so many people willing to bet against this stock?
In this video, Fool contributor Rick Munarriz takes a look at how a peak in short interest actually helped investors in Tesla Motors (TSLA 4.96%), Baidu (BIDU 0.72%), and Netflix (NFLX 1.74%).
Shorts certainly get it right from time to time, but often they are attracted to the same negative sentiment that's driving down the stock to the point where it may be a compelling purchase for opportunistic investors. So long as you are comfortable with the fundamentals of the stocks you own and the ones you are looking to own, heavy shorting shouldn't scare you away. In fact, it may even be a dinner bell.
