Hi, Consider a hypothetical. An investor short* sells Stock A for $100 and uses that money to buy Stock B for $100. After one month, stock A drops in value by 5% to 95 and stock B rises 10% to 110. The investor closes his investment ( sells stock B for $110, uses $95 of that to buy a stock A and returns it to its owner) and has made a profit of $15 ( $5 on stock A and $10 on stock B). The conventional return on investment (ROI) calculation would give an infinite return. ROI = returns / Investment = 15 / 0 = infinity My argument is that the ROI formula is not a suitable measure in this situation. 1. Is my argument correct? 2. Is there a physical process that is equivalent to the above example? I am trying to understand if there are any natural phenomena that generate something from nothing? ( my guess is it is impossible) Thanks, MG. Short selling a stock means selling a borrowed stock. Our investor borrowed the stock from another investor and sold it for $100. The borrowed stock is returned when the position was closed, i.e. our investor bought back one stock A from the market and return it to its owner. You can read more on short selling http://www.investopedia.com/university/shortselling/" [Broken].