Yep, you're right about the risks to shorting stocks regarding timing. That said, I still think it's easier to pick individual stock to short purely because you can work out a timeframe and know what's going on better. (FWIW, I don't short stocks and I never have - I just call out the stupidity.)
Shorting the general market through ETFs is a little nuts until a clear peak has taken place. With BTC and US equities, I'm not convinced (yet) that we've seen the peak. This could be a "buy the dip" period where bulls simply cannot lose and bears get more and more sick and tired. I think it's in the nature of bear's to be consistently early. Bears are right. Don't get me wrong. But they're also stubborn by nature. (Just read through messages from this thread in the late nineties if you want proof of that!)
It's when all bears have thrown in the towel and bulls seemingly have the Midas touch, that I'm going to turn from cautious to fearful. When teenagers become millionaires from buying stocks,... that happened in 2021, remember. I remember enough stories. I don't think we're at that stage yet.
You're right about shorts getting burned. They still ARE getting burned from 2021 fads. Tesla, for example - who'd've thought that three years later they'd still be worth half a TRILLION dollars?!
And this risk must also be considered - There's a record $5.3 trillion in cash on the sidelines as investors get more bearish on stocks. Here's why that could mean big gains ahead. (yahoo.com)- but I don't fully understand what would/could cause a dramatic shift. FOMO?
This was written in 2020 - Why Nearly $5T in Cash on the Sidelines Is Bearish for Stocks (moneyandmarkets.com)
Realistically, my portfolio will be the exact same in a bull or bear market. Longing cheap stocks with balance sheet strength. I find this bear talk very interesting, but in terms of actual implementation, I don't see myself changing tack. |
