Shorting Profits Fade as Bets Against Banks Backfire

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Shorting Profits Fade as Bets Against Banks Backfire

3 May 2010 - BusinessWeek - Lynn Thomasson

The biggest U.S. equity rally in seven decades is wiping out profits for stock-market bears who have yet to capitulate on bets against banks, retailers and casinos.

“It’s been tough because things are shorted upside down -- the worse the company is, the more it’s gone up,” said Harry Rady, who oversees $270 million and runs a long-short fund as chief executive officer of Rady Asset Management LLC in La Jolla, California. “I wouldn’t want to be a pure short seller.”

Zions was the S&P 500’s 11th most shorted stock in April 2009 after losses in construction and commercial loans drove the shares down 93 percent in two years. The Salt Lake City-based lender reduced credit losses, spurring a 124 percent rally this year, the biggest in the index.

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Investors should carefully consider the investment objectives, risks, charges and expenses of the Contrarian Long/Short Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 877.302.7239. The prospectus should be read carefully before investing. The Contrarian Long/Short Fund is distributed by Northern Lights Distributors, LLC member FINRA/SIPC.

	RAM L/S	S&P 500
One Year	4.05%	49.74%
Three Year	7.29%	-12.01%
Since Inception	7.65%	-12.77%
Q1 2010	0.09%	5.39%

Mutual Funds involve risk including possible loss of principal. ETFs are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest directly in stocks and bonds. When the Fund invests in foreign securities through ADRs, the Fund could be subject to greater risks because the Fund’s performance may depend on issues other than the performance of a particular company or U.S. market sector. Stocks of mid-cap companies may be subject to more abrupt or erratic market movements than those of larger, more established companies or the market averages in general. The Contrarian Value Long Short Fund has the same management practices and is in all material respects identical to the predecessor Limited Partnership and is managed by the same portfolio manager since the predecessor limited partnership’s inception on February 2007. The Fund’s investment goals, policies, guidelines and restrictions are, in all material respects, equivalent to the predecessor limited partnership. From its inception date, the predecessor limited partnership was not subject to certain investment restrictions, diversification requirements and other restrictions of the 1940 Act of the Code, if they had been applicable, it might have adversely affected its performance. In addition, the predecessor limited partnership was not subject to sales loads that would have adversely affect performance. Performance of the predecessor fund is not an indicator of future results.