Article content

NEW YORK — After years of hiding under their desks, short sellers are re-emerging — slowly.

Investors who make a living betting that stock prices will fall are happy to forget 2013: The S&P 500 gained nearly 30% while Credit Suisse’s index of hedge funds with a dedicated short bias lost 25%.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Shorts set to pounce as stocks seen pricey, Fed pulls back Back to video

Buying the most heavily shorted stocks was a much better bet than the S&P 500: A list of top shorted stocks from SunGard’s Astec Analytics beat the S&P 500 by 26 percentage points on average last year.

But with the Federal Reserve beginning to cut back on its bond buying — in a withdrawal of the stimulus that underpinned the rally — there’s hope for short sellers in 2014.

Jim Chanos, president and founder of Kynikos Associates and one of the most prominent short sellers, said the market is primed for people like him and as a result he has gone out to raise capital.

“Now I think is not a bad time to be raising capital for what we do. When we got a rough going in the mid-90s, that was exactly the time to raise capital,” Chanos said, adding it was better to do this when critics viewed him as “like the village idiot and not an evil genius.”