Shortsellers in the Bull Market - 1987-08-31
Connoisseurs of sleazy stocks are the three Feshbach brothers -- fraternal twins Joe and Matt, 34, and their older brother, Kurt, 35. The Feshbachs go for what Joe calls "terminal" stocks that will drop even if the Dow goes to 3000. "We want to be sure we short lousy ones," he says. "Frauds and bankruptcy candidates and accounting fiascos." The brothers work from messy offices in Menlo Park and Palo Alto, California. Since they began shorting in June 1982, when the Dow sat on its tuffet around 800, the Feshbachs have yet to endure a down year. Their fund was up 248% in 1984. In the worst year so far, 1985, it rose 44%. They made 62% last year, but the fund is up only 13% for the first half of 1987 because the brothers made a mistake and shorted a large block of Reebok International shares. After watching the price rise, they covered at a loss. Reinvested profits and money from outside investors have pushed the total under Feshbach management to over $100 million. The fund is not open to new money just now. When it does reopen, the minimum investment in the partnership will be $2 million.