It's worth the thought. I usually do investing in pairs. For example, when I bought some gold miners, I also bought materials miners. My thinking is was that both have asynchronous upside potential, but gold can act as a hedge against other commodities and stocks in general in environments like this. Since then, my materials miners have done great and my gold miners have barely budged. Interesting dynamic.
Right now, I think growth and large cap is way overvalued, so a short play on select stocks there could work, but also can be dangerous because of the momentum trading that happens there. Then value stocks, small, and mid cap look historically very cheap, so going long looks right there. So as a pair trade, that might work. Go short large cap growth and long small cap value. If you lose on the large cap growth, then that should be offset by gains in small cap value. But you have a good chance of winning at both, if the rotation trade continues to pan out.
Anyway, I don't do shorts myself, but just a thought. |
