Dana Galante: The Short Seller Who Made Money While the Market Soared

Last reviewed: August 2026. Figures are drawn from Galante’s profile in Jack Schwager’s Stock Market Wizards and secondary reporting. Her documented record covers 1994–1999.

In the late 1990s, the Nasdaq was doubling, dot-com stocks were minting overnight millionaires, and buying almost anything and holding it looked like genius. Dana Galante spent those exact years doing the single hardest thing in the market: betting against it. On purpose. For a living. And winning.

She was a pure short seller, which means she profited when stocks fell and lost when they rose. Doing that during one of the most violent bull markets in history is a little like swimming upstream through rapids, which is why Schwager titled her chapter “Against the Current.” Her headline return of fifteen percent a year does not dazzle at first glance. Then you learn what it was fighting, and it becomes one of the most impressive numbers in the entire Market Wizards canon.

The hardest job in the market

Short selling is structurally brutal, and it is worth being honest about why. When you buy a stock, your loss is capped at what you paid and your gain is unlimited. When you short, that reverses: your gain is capped, because a stock can only fall to zero, while your loss is theoretically unlimited, because a stock can rise forever. On top of that, the whole market drifts upward over time, so a short seller is fighting gravity every single day. You can be completely right about a company and still be carried out by a market that stays irrational longer than you can stay solvent.

Galante chose that side anyway, precisely because it was harder. She was drawn to the short side as the genuine challenge, the place where you really had to know what you were doing rather than simply buy something because it was going up. She learned the craft working closely with a skilled short-biased manager she half-jokingly blames for the whole career. Being the lone skeptic standing against a wall of analysts recommending a stock, and being proved right, was a feeling she described as truly earning the money.

The record that only looks modest

From 1994 to 1999, Galante compounded roughly fifteen percent a year. In isolation that is respectable but unremarkable. The context transforms it. During that same window the Nasdaq, which made up about eighty percent of her trades, rose an average of thirty-two percent a year.

Schwager framed the achievement perfectly: making fifteen percent a year by shorting into that market is the mirror image of a long-only manager making fifteen percent a year while the market falls thirty-two percent annually. Both require extraordinary stock selection to overcome an overwhelming opposite trend. Measured against her own benchmark, Galante outperformed by something like forty-seven percentage points a year, on the wrong side of the greatest bull run of the era. Her investors understood this. Most of them used her fund not to get rich on shorts, but to hedge their long portfolios, because returns that go up when everything else goes down are rare and valuable. The fund was popular enough to close to new money, and she preferred keeping it nimble to growing it, since a larger book would have made her hard-to-borrow positions even harder to exit.

How she actually traded

Galante’s edge was disciplined, catalyst-driven short selection wrapped in strict risk control.

Find the overvalued company with a reason to fall. She hunted for expensive growth stocks where something concrete would puncture the story: deteriorating fundamentals, accounting red flags, heavy insider selling, or hype detached from reality. Overvaluation alone was never enough; she wanted a catalyst.

Overlay the macro. She traded partly top-down. If a war looked likely to push oil prices up and damage the economy, for instance, she would lean on shorting cyclical stocks that would suffer. The big picture told her where to hunt.

Time with charts, and above all, control risk. This is the part most aspiring short sellers skip. Galante used support levels to take profits, covering shorts where heavy past buying was likely to halt a decline. Most importantly, she got out of any short that made a new all-time high. A stock printing fresh highs is a short going violently wrong, and her rule was to stop fighting it rather than ride it into the ground. That single discipline is what separates a surviving short seller from a blown-up one.

Where the Mind · Method · Money framework meets Galante

Method is catalyst-driven fundamental short selection, supported by a top-down macro read and chart-based timing for entries and exits.

Mind is contrarian conviction under maximum pressure. Standing alone against the analysts and the crowd, being right but early, and holding the discipline to act on your own analysis while the whole market screams the opposite, is as hard as trading psychology gets.

Money is her defining strength. On the short side, where losses can run to infinity, she covered at support, exited any position making new highs, sized carefully, and delivered the uncorrelated returns that let her clients sleep. Risk control was not a feature of her method; it was the method.

The honest counterweight

Short-only is a graveyard. The overwhelming majority of dedicated short funds eventually close, because the math and the market’s upward drift are relentlessly against them. Galante is remarkable partly because she is a rare survivor, and survivors are the ones who get interviewed. Her firm, Miramar, was later wound down.

The absolute return was modest. Fifteen percent a year is good, not spectacular, and in that specific era she would have made far more simply going long. The case for her rests entirely on the risk-adjusted, uncorrelated, hedge-portfolio view. If you only care about raw return in a bull market, her record understates what long-only investors made; if you care about returns that survive a crash, it shines.

One fund, one documented window. The celebrated record covers 1994 to 1999. It is a genuine, verified feat, but it is a single manager over a single period, and it should be read as such rather than as proof that short-only investing is a reliable path.

Shorting is not a beginner’s game. Unlimited loss, short squeezes, borrow costs and hard-to-borrow constraints make it genuinely dangerous. Galante’s risk rules exist because the strategy will destroy anyone who runs it without them.

Where are the women wizards?

It is worth naming something the series makes obvious. Across all of Schwager’s Market Wizards books, only a small handful of the traders profiled are women, Galante and Linda Raschke among the most prominent. That says far more about the industry she entered than about who can trade. Galante built an elite record on the hardest side of the market, in one of its most male-dominated corners, during its most euphoric bull run. She was against the current in more ways than one, and she won anyway.

What to actually take from her

You can win against the dominant trend. Superior selection can overcome even a savage headwind. The crowd being wildly bullish does not make it right.

Risk-adjusted and uncorrelated beats raw and correlated. A return that holds up when everything else collapses is worth more than a bigger number that evaporates in the first crash.

Never fight a runaway. Her rule to exit any short making new highs is the whole discipline in one line. When a position proves you wrong, stop arguing with it.

Contrarian conviction needs ironclad rules. Betting against the crowd only works if your risk control is stricter than everyone else’s. Conviction without rules is just stubbornness with leverage.

Frequently Asked Questions

Who is Dana Galante?

Dana Galante is an American money manager and the founder of Miramar Asset Management, profiled in Jack Schwager’s Stock Market Wizards (2001) in a chapter titled “Against the Current.” She is known as a pure short seller who produced strong returns during the 1990s bull market.

What made Dana Galante’s track record so impressive?

She compounded about 15% a year from 1994 to 1999 as a pure short seller, during a period when the Nasdaq, roughly 80% of her trades, rose about 32% a year. Making money on the short side against that kind of tailwind requires exceptional stock selection, which is why her modest-looking return is so respected.

What is short selling and why is it so hard?

Short selling profits when a stock falls and loses when it rises, the reverse of normal investing. It is hard because losses are theoretically unlimited while gains are capped, and because the market drifts upward over time, so short sellers constantly fight the prevailing trend. You can be right about a company and still lose if the market stays irrational.

How did Galante pick shorts and manage risk?

She targeted overvalued growth companies with a concrete catalyst to decline, such as accounting red flags, insider selling or weakening fundamentals, and overlaid a top-down macro view. For risk, she covered shorts at support levels and, crucially, exited any short that made a new all-time high rather than fighting a losing position.

Is Dana Galante one of the few women in Market Wizards?

Yes. She is one of only a small number of women profiled across Schwager’s entire Market Wizards series, alongside traders like Linda Raschke. It reflects how male-dominated the industry was rather than any limit on ability, and it makes her elite short-side record all the more notable.

Which Market Wizards book is she in?

Stock Market Wizards (2001), the third book in the series. For the wider series and where to start, see our Market Wizards book review.

What is the one lesson to take from Dana Galante?

Superior selection plus ruthless risk control can beat the dominant trend, but only if you never fight a runaway. Her rule to exit any short making new highs is the discipline that let her survive on the market’s most dangerous side. Conviction is worth nothing without rules.

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