I have no short position whatsoever at this point. The reason is that my view on the economy differs markedly from yours. I believe that there is risk of a recession, but won’t be as bad as you predict. My mouth (and a little of my money) is to go overweight on defensive stocks (I see that we both like Berkshire). Things like consumer staples, health care, etc. I figure that I won’t get killed if things get really ugly, and I also have some upside if the market decides to rally.
However, the vast majority of my positions are market neutral, in arbitrage trades. This has been pretty good lately, with all the M&A activity around. But this implies very high turnover, and use of margin strategies to boost returns. You pretty much becone a trader and start running your own little hedge fund if you decide to do this. I don’t really think it’s suitable for everyone.
As for homebuilders, lenders, energy stocks, etc, my policy is not to touch any “hot” stock (neither buy nor short-sell). I simply feel that I lack the necessary expertise to make an informed choice. Whatever I don’t understand, I stay out of.
Finally, in the hope of clearing this up once and for all, I DO NOT ACTUALLY RECOMMEND THOSE 5 IDEAS. Those are appropriate if, and ONLY if, you’re convinced of a big crash (and I’m not).
