How To Assess JB Hi-Fi

The recent move by JB Hi-Fi (JBH:ASX) to acquire The Good Guys has a lot of investors excited. Largely, it seems, because the tie-up will help consolidate the retailer’s pricing power in an already concentrated industry. But while we’re happy to shop there, we’re not yet convinced JBH meets our investment criteria.

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JB Hi-Fi: Short Squeeze Coming Or Another Peak?

I have mentioned it before, I generally don’t like to trade against large market short positions in stocks that are in strong downtrends. More often than not, the big hedge funds know something the rest of the market does not and invariably they win. Big time. Large short positions in recent years over the mining services companies, Myer, Slater & Gordon, Dick Smith and so on have all netted large profits.

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