London-based Arhammar Short Alpha Fund Ltd would be betting on falling stocks around the world. Arhammar Short was started on October 10 by two former analysts of Kynikos Associates Ltd, the company that achieved popularity when it was able to short Enron Corp. Co-Managers Mike Monnelly and David Bonnier said they would be investing in 30 to 50 stocks which they expect to perform poorly in the market. Both analysts did not say how much capital they had gathered for the fund. However, the second biggest Baltic lender, Skandinaviska Enskilda Banken or SEB, is one of the fund's backers.
When an investor goes short on a stock, he or she would anticipate a reduction in the stock's share price. Short selling a stock allows investors to sell shares borrowed from the broker and then buying them back when the share price goes down. Doing so would allow investors to make a profit.
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