Buyiing stocks based on Short Ratio <1

Hi everyone,

I have wondered one thing - if the short ratio is less than 1% on a stock, isn't that necessarily a VERY good thing.

I have been looking at a lot of stocks that are under this ratio and have been doing well.

Just wondering what are the downsides to looking at this strategy.

Kind Regards,

sikh investor

 

Um the downside is you are wrong and lose money?

 

I just meant to say what are the downsides at looking at this trading strategy. Obviosuly losing money is one thing, if you dont' have stop losses or don't research the company thoroughly..

 

The downside is you might be buying the tops while the business has growth priced in and before shorts attack.

Have you backtested your theory?

 

hey guys - any suggestions on this trading style?