So here are the three.
The first is we call them structural shorts. We love these. These are melting ice cubes. These are formerly good or great businesses where the premise the business was built on is no longer relevant, usually from technological obsolescence and/or business model innovation. These are all tons of formerly great businesses, and you get the double whammy of imploding earnings power and multiple reduction. These can be phenomenal shorts that you can press on the way down.
The second one is a type of competition short. It’s a this is a wider
variance of outcome where you’ve effectively got an industry structure
with a set of competitors and the competitive dynamics can only
escalate.
Then the third one is cyclical peaks. It’s where you’ve got peak
revenues, peak margins, peak multiple. Two of the three is good
enough