Philippe Bonnefoy, Cedar Partners

The trick to shorting is not necessarily identifying the target; it is identifying the catalyst. Securities can remain mis-priced for months or even years. The successful hedge fund manager needs to identify the timing of the event that will cause a de-rating of the security.

Is it an earnings release, an analyst or rating agency downgrade, a revision by the management of future earnings guidance, the failure of a clinical trial, a loss of market share, a fall in operating margins, disappointing