In an article sure to not surprise the short sellers of the world, the NY Times shows the research that proves short sellers aren’t evil and actually know a thing or two about investing, which is how they make their money. And not “taking” down companies or manipulating the markets for the hell of it as people like Patrick Byrne want people to believe.

These concerns are largely unfounded, however, according to the new study, titled “How Are Shorts Informed? Short Sellers, News and Information Processing.” Its authors are Joseph E. Engelberg and Adam V. Reed, both finance professors at the University of North Carolina at Chapel Hill, and Matthew C. Ringgenberg, a Ph.D. student there. The study has been circulating since January as an academic working paper.

Their work suggests that the average short-seller has done well through astute research and analysis, not market manipulation.

The researchers analyzed a database containing all short sales involving stocks listed on the New York Stock Exchange from January 2005 to July 2007. The database showed the exact time and price at which each short sale was executed. That enabled the researchers to compare the timing of short sales with the publication of news articles about the companies whose stocks had been sold short.

It’s a good story. It shows that short sellers tend to, you know, actually research the companies that they short sell. They have a good idea of their targets and know what they’re doing.

Now that we have some proof that short selling isn’t evil, I won’t hold my breath waiting for the SEC to retract it’s short selling regulations. They get way too much cash from BOA and Goldman for that ever to happen.