Why should we trade long only?

There are a couple of reasons I’d suggest only trading long. When I was trading commodities, we traded long and short. With equities it’s long only for a couple of reasons. Firstly, my strategies and system research show while trading on the short side can be quite profitable, the risk adjusted return (I’m talking on a systematic basis here, not a non discretionary basis) is just not worth the effort. The other issue is, during the GFC, the Australian regulator actually banned all short selling. They did that to protect one of Australia’s biggest banks that was under fire from the short sellers; it was going down the same path as Lehman Brothers.

They banned short selling across the whole universe of stocks. The argument I now have is, why rely on a short side strategy, when the time you need it, there’s a risk that they’re going to ban it, and you can’t use it?

Plus a lot of people don’t understand short selling. It doesn’t make sense to them.