Short Interest Ratio

Who's short? Who's long? Then we make a pretty fraction and come up with a published ratio.

That's the recipe. How's it taste? Well...for the most part, meh. In theory, if there are lots of professionals shorting stocks, it means that wizened and schooled, naturally smart people are betting that the market will go down. But, in fact, the way the calculation is made is that it just takes a total gross number of shares short in any market, and kinda makes up a number that represents who or what is long. Maybe that used to be a relevant metric 40 years ago when this ratio really became a Thing, but today, with so much automated trading, with so many hedges being put on and pulled off in such short periods of time, the calculations don't mean a lot.

And then, oh...there's that little thing that the pros are wrong alllll the time. In fact, some 99% of index funds outperform managed funds in their category over 5-10 year periods, at least in the modern, post-Reagan history of Wall Street. So maybe you should have only short interest the next time your broker calls wanting to sell you shares of a hedge fund, a mutual fund, or anything...managed.