Saturday
Worth checking out: Mark Spitznagel Warns: If Investors Thought August Was Scary, "They Ain't Seen Nothin' Yet".
Long-time TDE readers know they don't want to take investment advice from me: Yes, I bought physical silver low and got rid of it at a decent price, but I didn't get rid of it because I thought the price would go down. I got rid of it because I didn't like holding physical silver. I turned around and put my money into paper forms of physical metal, such as mining stocks . . . and lost everything I gained on my physical and much more.
I continue to follow an unconventional investment plank. I still hold onto my mining stocks, I keep a lot of cash in the bank at .0000025% interest, and I hold large short positions in the market.
I started shorting when the Dow hit 10,000 and kept adding to my short positions every 1,000 points or so until it hit 18,000. It's an investment strategy that has cost me huge amounts, both in the loss of gains I would've enjoyed if I just had my money sitting in a conventional Dow index fund and loss in the value of my short positions.
Still, if Spitznagel is correct, things are going to get a lot worse. Interesting, though: He declines to give any advice in the interview (that you can watch at that link), except to say, "Things are really tricky. There just is no good advice for the unsophisticated investor. For him, I'd say just hold cash" (not remotely an exact quote).
It has always been my position that my short positions are "cash," in the big outlook, since I'm looking to create liquidity if the market crashes. And I know Spitznagel made huge money on Black Monday when the market slid 1,000 points. So he must've been short, and I'm guessing he's still short. So it seems he thinks more shorting is appropriate. Why didn't he just say that?
Maybe it's because the unsophisticated investor can't trade options, which is what you need to short stocks. But can't the unsophisticated investor use inverse ETFs, exchange traded funds that short the market? Maybe the costs associated with ETFs are too high? I simply don't know, but if you want to short, here's a list of inverse ETFs. You might also want to look at what sectors have done the best lately, then short them. I might, but again, if you're thinking about following my lead, don't. Think for yourself.
And feel free to email me with any correctives, if you think my idea is more flawed than I realize.
