Summary
This short chapter is not meant to test the braincells of the reader. It is simply a collection of practical tips on how to avoid classic expensive pitfalls and meet investors' expectations. Investors do not buy into long/short products for long ideas. They want low-volatility uncorrelated returns. This chapter considered investors' expectations, while avoiding the trap of thinking of the short book as an afterthought of the more fun long book. If those problem stocks are removed from your field of vision, they will not be on your mind and this will eliminate temptation.
Once you have distilled your investment universe and understood what is expected of you by investors, it is time to pull the trigger. In the next chapters, we will put everything together, and see how this can be done in practice.
