Short Bears Post Record

With stocks continuing to surge, open positions of short sales on the New York Stock Exchange have set their fifth consecutive monthly record in the most recent period.

The Big Board said short interest represented 2.35 billion shares for trades made in the month ending June 11 and settled by June 15, up 1.6 percent from the month earlier.

During the same period, the Standard & Poor’s index of 500 stocks, a broad measure of the stock market, rose by 1.4 percent, though it has since retreated from its record high close set in late May.

In a short sale, an investor borrows shares from a brokerage firm and sells them, hoping to buy them back at lower prices and make a profit. If the shares rise in price, the short-seller faces a loss.

High short-interest positions have been considered an indicator of bearish sentiment among market investors. But some analysts say large short interest positions are a positive sign, because short-sellers eventually have to buy the shares back.

Big increases in short interest were posted in the shares of Corrections Corporation of America, Kmart Corp. and Coca Cola Co.

Fund outraces rivals

So far this year, a little fund run by Audrey Snell, a graduate of George Washington University, has returned about double the market averages.

The fund, SunAmerican Small Company Growth, returned 50 percent in 1995 and has beaten the Standard & Poor’s 500-stock index in every year since Snell took over in 1991. Over that time, she’s tripled shareholders’ money.

She does it by zipping in and out of firms like Neurex, Gadzooks, and Hologic. Scary. But that’s why you buy a small-cap mutual fund - to ride with a skilled driver.