Monthly Reports Leave Investors in Dark

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Monthly Reports Leave Investors in Dark

Sat May 29, 2004 07:25 AM ET

NEW YORK (Reuters) - Like a full moon, short-interest reports from U.S. stock markets show up just once a month.

That's odd, considering the recent growth of hedge funds using the bearish strategy. And in an era of quicker trades, speedier transaction processing and instant disclosure, it's especially out of whack.

The monthly reporting of short interest puts small investors at an information disadvantage. Unlike the pros, retail investors don't enjoy the contacts and relationships on the Street that serve as a network of information to fill in the gaps between the reports.

Shorting a stock is a bet that its price will drop. To set up a short, an investor borrows a block of shares, sells it, and then buys the stock at a later date to return it to the broker who lent him the shares.

"Certainly in today's environment where so many of the reporting and disclosure requirements have been made more stringent and real-time, it seems to be one of the remaining antiquated rules," said Steven Cohen, a partner in the New York hedge fund shop Kellner DiLeo Cohen & Co. .......>> MORE

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