Anyone shorting stocks yet?

[barnaby33]

This time around I’d say it’s a bad idea. In real value terms the market is bound to decline. In Bonars that cat is out of the bag. You are 5 years to late. Unless you have inside info, then short like there is not tomorrow. Just don’t be Martha Stewart if you do.

Josh

[spdrun]

But YMMV may still vary with individual stocks. Why not ignore the market and concentrate on good stocks?

[scaredyclassic]

you are dumb.

the market is crazy.

beware.

[spdrun]

Exactly. Ignore the crazy, go with the sane.

[scaredyclassic]

We are too dumb to even know what is sane.

[spdrun]

I think you broked the markets today.

[scaredyclassic]

I used to believe that what I believed had some connection to reality. Now I believe that any connection is merely accidental. Investment wise. There’s still a very high probability my legal advice will be acvurate.

[SK in CV]

[quote=scaredyclassic]I used to believe that what I believed had some connection to reality. Now I believe that any connection is merely accidental. Investment wise. There’s still a very high probability my legal advice will be acvurate.[/quote]

I just lectured my daughter on using the words “I believe”. She used the words in an application for a supplemental grad school program. I told her “believe” is a religious word. It’s a word to use when you think something irrespective of the evidence.

Your legal advice is sound because you KNOW your shit. You don’t just believe it to be accurate. It isn’t based on speculation or feelings. I think you’re right. Any connections between “beliefs” and reality are merely accidental.

[paramount]

It seems Russia is preparing to dump US debt:

http://blogs.wsj.com/moneybeat/2014/03/14/did-russia-just-dump-its-treasury-holdings/

Sort of like a fed bank run.

I know, it doesn’t matter, nothing matters.

The market will rally on this news since it may mean more fed printing.

[spdrun]

To put this in perspective, Russian holdings amount to 1.4% of total debt.

[scaredyclassic]

[quote=SK in CV][quote=scaredyclassic]I used to believe that what I believed had some connection to reality. Now I believe that any connection is merely accidental. Investment wise. There’s still a very high probability my legal advice will be acvurate.[/quote]

I just lectured my daughter on using the words “I believe”. She used the words in an application for a supplemental grad school program. I told her “believe” is a religious word. It’s a word to use when you think something irrespective of the evidence.

Your legal advice is sound because you KNOW your shit. You don’t just believe it to be accurate. It isn’t based on speculation or feelings. I think you’re right. Any connections between “beliefs” and reality are merely accidental.[/quote]

there is a bit of speculation with some legal advice, as you are predicting what’s going to happen based on some facts and some law. however, i wish my investment abilities were as accurate as my law predictions…

[CA renter]

As someone who has been short stocks far more often than long, I can say that shorting stocks can be the worst possible investing decision you can make.

I started to go heavily short back in ~2005, and this was after **extensive** research (full time, for years) into what I believed would be the worst financial crisis/depression in our lifetime. We had significant short positions in banks, mortgage lenders, ratings agencies, auto manufacturers, and a handful of retailers, among others. I have a tendency to be early, so made sure we could withstand a period of time when the market would move against me (long-dated options/LEAPS and kept rolling those over when the market would take a short-term dive; straight short stock positions with lots of extra money to protect myself against margin calls, etc.; and NO leverage, whatsoever). I built the positions up over time, but even while I took precautions (but only some hedging), we had unrealized losses of just over 30% at the market peak ~2007. It was not an insignificant sum, BTW.

Eventually, things did pan out the way I thought they would and the positions paid out rather handsomely, but the Fed’s actions throughout the process, along with the bans on short-selling and other market manipulations against the shorts, made things very volatile and gut wrenching. I got out of all my short positions in October 2008 when everyone thought things were going to get far worse. Best decision I ever made, and I was glad to be out. Some others I know who were shorting throughout the bubble as I was did not do so well, and some were absolutely slaughtered.

I nailed the internet/stock bubble, and nailed the housing bubble, and I am 99% convinced that we are in another peak wave of the same credit/asset price bubble that has plagued us for more than a decade. As a matter of fact, I think the bursting of this one will be even worse because the PTB are nearly out of their traditional ammunition since they’ve wasted it on trying to keep these bubbles afloat over all these years. We are tapped out on all levels, public and private, IMO. But I’m still extremely hesitant to short things this time around. If they DO decide to pour gasoline all over the fire again, I think they will go to extremes that have never been seen or thought of before.

I want to short, am very comfortable shorting, and I’m far more bearish and willing to take lots of risks when it comes to shorting… more than anyone else I’ve known personally or on blogs (even bearish blogs). But I am scared to do it this time around; the last time was incredibly stressful — and that was when I was 100% right!

If you short, be VERY careful, and do NOT use leverage! Do not put any money at risk if you’re not comfortable with huge losses. I cannot stress this enough.

IMO, the best move to make if you think things are going to crash is to get out of your long positions. Maybe, you can buy some puts on index ETFs or a few stocks that you think are wildly overvalued, but I think the best bet is to keep these positions small. Just be careful, whatever you do.

Good luck!

[moneymaker]

Thank you for your experience CA, since I’m not well versed in the markets (and I think they behave irrationally) will probably not short anything, I do recall about 10 years ago wanting to buy heavily into gold but did not, big mistake! I don’t have the means yet to “play” the market but just thought I’d give a wake up call to others out there in pigg land.

[scaredyclassic]

here’s a lower risk proposition.

something hugeley devastating, catastrophic, horrifying, disruptive happens today or tomorrow.

you short soemthing related for just monday. get outmonday afternoon.

you have a chance of making a bit of money on that. may only happen once ina while though…

[paramount]

Wow CAR that is incredible and excellent commentary as well.

I just don’t know what to think anymore: I’ve been anticipating a crash like many others (primarily based on analysis by people a lot smarter than myself…), and I thought it would have happened by now. On the other hand, big crashes happen fast and most will never see it coming.

Market manipulation is heavy.

Here’s the latest from ECRI:

Price Signals of Global Slack

Some key economies, including the U.S., have been enjoying increased export growth by certain measures. Yet, as discussed in ECRI’s U.S. Cyclical Outlook in January, “the U.S. is able to boost exports only by cutting prices, because exporters simply lack pricing power.”

In fact, year-over-year growth in world trade prices remains in a cyclical downturn, and dropped deeper into negative territory, hitting an eight-month low in December. Indeed, this measure has exhibited almost continuous price deflation since early 2012, barring a couple of abortive forays into positive territory.

As the chart shows, this measure has rarely been so consistently negative, the last occasion being in the wake of the Global Financial Crisis. Before that, it had turned negative around the 2001 U.S. recession.

The other extended period of deflation seen in this measure was for nearly four years in the late 1990s, when a massive once-in-a-lifetime deflationary shock resulted from the integration of China, India, and the ex-Soviet economies into the global economy. This period also included the Asian crisis.

Today, there is no such crisis or structural deflationary shock comparable to that experienced in the late 1990s. Thus, the mounting deflation in world trade prices is signaling growing slack in the global economy.

[Author]

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