thanh dao,
>>but isn't it profitable and safe that instead of keeping cash..you short the high fliers or buy some puts for gain?
Profitable, yes. Safe? No. Problem is timing.
When the bear is established then short everything, but it's difficult to establish before the trend is already in full steam and bound for corrections. One can trade the market ST both ways all the time. You can short the SPOO against the trend for day trades and make money in an uptrend. Strategic holdings in stocks, however, better be long then short, because the upside is unlimited (as shown by many highflyers) while the downside is (zero). The most money is made long stocks, even though one can specialize in shorting, too. I wouldn't mind shorting the markets and many stocks myself, but I cannot recommend it as a safe play to anyone. There are not many safe investments, even when buying government bonds you speculate against inflation. The very safe bets (CPI linked government bonds)usually carry very low interest.
>>if a crash does happen, besides some no profit high flier stocks..what kind of stocks mostly suffer during the depression?
1. Cyclicals, but even worse, cyclicals that have been recently deemed as growth companies. Best example is INTC.
At a P/E of 15 on FY 2000 profit I would consider it highly priced. A P/E of 10-12 would be fair price IMO, and that takes it's gorilla status into count.
2. Companies that will be go out of business. In prosperity the less competitive companies are gobbled up by the leaders and their shareholders get more then they bargained for. In depression said companies just go bankrupt.
3. Big S&P stocks that nobody will want to buy from the index funds when the latter get a flood of withdrawls. You can start by screening the highest Price/Book ratio.
>>Where you buy gold coins cheap and is the premium cost of coins is much higher than gold leaves?
I think premium of the popular coins is 2-3% over their gold contents. One great quality of gold coins and bars is that you can carry it on your person.
ATG |
