Some big-name hedge fund managers who made out shorting stocks last year now see major short positions as too risky, and are tilting their portfolios mostly — or completely — to the long side, Reuters reports.

“Some hedge funds have already changed tactics and are simply buying cheap stocks, wary of getting burned if a stock they are shorting announces unexpectedly good earnings and the share price spikes — a real possibility in an improving economy,” writes Reuters’ Laurence Fletcher, adding that higher stock borrowing costs being charged by skittish lenders have also led to the shift.

Among the big names who have moved away from shorting: Crispin Odey, who told Reuters that “equities now look exceptionally cheap against cash”. His European fund is now 65% long in equities. And top hedge fund manager Phillipe Jabre says he has no short positions because it would be “too dangerous”.

While shorting strategies fared well in 2008, this year has been a different story, Fletcher says. “Dedicated short bias — one of only two strategies to make money in last year’s market chaos — has lost 10.81 percent so far this year,” he writes,

Long-focused funds, meanwhile, are faring much better. “Long/short equity funds, which tend to be long-biased, returned 8.21 percent in the first half of 2009,” Fletcher reports.