Daniel Chisholm: Ha. No I'm not buying QQQ ... yet. But since I want to maintain a diversified portfolio, and value stocks - or what I perceive to be value stocks anyway - are the biggest component by dollar value in most of my portfolios, then I want to look around for ways to diversify. One way would be to buy QQQ. Another would be to buy a relatively small amount of internet/telecommunications stocks. (I'm doing this.) Another way would be to short apparently overvalued stocks (I do this but don't have any success.) Or short a basket of stocks using options. (I don't have any success with options.)
If you will look real, real closely you will find, imo, that most people do not make consistent profits or a lot of profits from shorting stocks. There aren't so many people who've quit their day jobs- from what I can see, based on profits from selling short. But there many who have profited immensely by being long.
There are some successful short sellers sure.... Anthony, Mr. Pink, and perhaps a bunch of their followers. On this thread, Peter M. comes to mind and might be another. You will notice that Mike Burry argues for short selling as a very good opportunity in today's or tomorrow's market, and his actual short position is very small compared to his overall portfolio and is used as a hedge, according to his site notes. This seems reasonable to me.
Switching back-and-forth between long and short positions or having large short positions (in dollar amounts)-- that, from what I can tell and from what I read of successful investors - is best left to professionals. That my opinion, anyway. I want to say also, that I hope I am basing my opinion on what I see and experts say, and NOT on my own experience. That is, just because I can't short well, I'm not saying shorting doesn't work and people shouldn't short.
pasta boiling, gotta go. Paul. |
