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Thread: Thinking about making a bet against the stock market

  1. #1
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    Thinking about making a bet against the stock market

    Hi everyone. I just wanted to run this idea past everyone. I feel like the US economy is propped up on some really shaky ground with some pretty baseless optimism, and the fact that interest rates keep getting cut, leaving very little room to cut more to try to pull the economy out of a downturn, makes me think whatever downturn happens next will be bad.

    I don't currently have any money in the stock market, but I'm seriously considering putting a lot of money into an inverse ETF, which is a fund that essentially follows exactly what the market does, but in reverse. (So, if the S&P 500 goes down a point, this goes up a point, etc. It's not exactly shorting a stock, but it's close.)

    What do you guys think?

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    Director Freude am Fahren's Avatar
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    So it's like shorting the entire market? I'm in!

    Seriously though, I've never done anything with regards to the stock market, but I think I should at least learn about it. Maybe I'll jump in after the downturn.

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    Timing the market has always been easier in hindsight. Market coming down after some period of irrational upturn is an inevitability, but to be able to pin point exactly when that will occur will always be some sort of gamble.

    When I visit Vegas to gamble, I'd only gamble small. An amount I'm comfortable losing. Don't bet an amount that's larger than what you can afford.

    Historically speaking, markets to tend to tick upwards over time. Even if you bought at the peak right before the crash... whether it's a house or stocks, by now, you would've made your money back and then some.

    So personally, I think it's wiser to bet a better future rather than betting for a sad future with little value, but then again, you're sad little man!

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    Quote Originally Posted by Freude am Fahren View Post
    So it's like shorting the entire market? I'm in!

    Seriously though, I've never done anything with regards to the stock market, but I think I should at least learn about it. Maybe I'll jump in after the downturn.
    Yes, what I would probably invest in is ProShares Short S&P500 (SH). It's a fund that's engineered to do just the opposite of what the S&P 500 does. So you aren't doing anything weird or complicated that comes with actually shorting a stock, and it allows you to get a similar effect to shorting the entire market.

    If you want to get crazy, you can even find funds that do TWICE what the market does, but inverse, so if you really felt the market was going to tank, you could invest money in it, and if it went down, you would make twice what you'd make in the ProShares Short S&P500 fund.

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    I don't think you're wrong about the stock market and/ or the greater economy in general.

    My mum wants to sell her house and move in with me when I buy one. I've been delaying and delaying because of my pessimism about the economy. (and I got proper fucked up in a rear end crash on my motorcycle in February!) One of my coworkers already divested himself of all stocks in his 401K (Costco stock has gone up 50% in the last year ) I'm holding on, hoping it splits. If it does i'm going to wait for the initial uptick then run for the hills as well.

    Our "problem" is that we just entered the Chinese market with one store, and that opening was so succesful they aren't even waiting to monitor it, they've already got a couple more stores penned in for next year.

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    High Plains Luddite George's Avatar
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    Invest in real estate. They're not making any more of it.

    An old saying for sure, but it has worked for us so far. And I hear credible stories regularly about people owning houses just a year or two and walking away with large profits.

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    Quote Originally Posted by George View Post
    Invest in real estate. They're not making any more of it.

    An old saying for sure, but it has worked for us so far. And I hear credible stories regularly about people owning houses just a year or two and walking away with large profits.
    If I sold my house now, from when I bought it in '14, I would profit over 100k....

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    The house I bought with my parents back in 96, we could profit share $400k! My very own house I bought back in 10, I can probably pocket $150k.

    However, who am I kidding, after we sell the houses, its not like well be able to afford rents in LA!

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    Quote Originally Posted by George View Post
    Invest in real estate. They're not making any more of it.

    An old saying for sure, but it has worked for us so far. And I hear credible stories regularly about people owning houses just a year or two and walking away with large profits.
    That's the plan but my work situation is kinda dicey. I'm fully employed but may not be working, again, in three weeks, depending on how this back thing works out. Twas supposed to be enf September that I started getting serious about looking etc. But I got injured in February.

  10. #10
    Junior Potato
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    Unfortunately I'm in no position to buy property, but if I did, there's a neighbourhood near me that looks like it will be rezoned in the not-too-distant future, which would increase the height limits by two or three storeys, depending how far it is from the Broadwater. There's one section that's slated for a 26 meter increase!

    That's where I'd buy.

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