Unfortunately, I lack the steel nerves requred to go short in a big way. In fact, I've never gone short in a SMALL way. The idea of risking it ALL for a maximum 100% gain just doesn't stike me as worth it.
Which isn't to say that shorting stock isn't smart. In fact, nearly every time I've thought that something should be shorted, I was right. I remember talking about Lennar homes right before it fell from $25 to $7. pdowd's KCS when it had rocketed to $43 (then fell back to... I think... $9). And NFLX, just this year, Etc.
So, it' shappening again. I *AGREE* with the author that this is a very smart time to go short. But I'm not going to do it.
Dec. 2, 2011, 12:01 a.m. EST
Don’t be fooled: Get short now
By David Trainer
Do not be fooled by the recent stock market run-up. Think of it as a set-up for a fall. Do not be fooled by how long insolvent organizations can perpetuate the poor capital allocation and spending decisions that created their insolvency.
The euro is not that different from Enron, WorldCom or the Madoff fund. All of these organizations were able to pretend they were profitable or solvent long after they were insolvent. The euro has the distinct advantage of support from central banks around the world, but printing money, as I explain below, does not create solvency. It only delays the inevitable, albeit for a bit longer than accounting manipulation and ponzi schemes delay their inevitable implosion.
Investors should brace themselves and their portfolios for a big market decline now. The shell game in Europe is ending and markets are yet to discount the structural decline in the productivity of economies around the world. These declines result from large-scale mis-allocation of capital over the past several years and in the present.
And when I write "brace" your portfolio, I mean take a net short position as I have in my portfolio.
Full article: http://www.marketwatch.com/story/dont-be-fooled-get-short-now-2011-12-02
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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