4 comments

  • sschnei83 hours ago
    The market can stay irrational longer than you can stay solvent.
    • 011000112 hours ago
      and shorting something priced in a currency is effectively going long on the currency as well. If the USD takes a dive due to, idk, increasing populism from both major parties, stocks will do quite well in nominal terms. Your shorts will burn and you&#x27;ll end up far worse than just staying in cash.<p>For most people, the best way to short is to just hold cash equivalents like short-term treasuries.
      • stogot53 minutes ago
        What is an example of shorting something not priced in a currency?
        • manquer44 minutes ago
          Positions are not necessary to be single transaction. They can be multi-step trade.<p>For global currency risk (meaning on USD), You will have to hedge your shorts with a non currency long position which historically hold value during defaults&#x2F; runs etc. Assets like gold (ETFs&#x2F;Gold bars) or real estate (REITs or physical land holdings) or rights to commodity revenue like oil, copper etc [1].<p>If the currency risk is not for USD, then mix of other currencies particularly USD would work well as as hedge.<p>Currency risk is independent of shorting, i.e. it is risk in Long positions as well, current may inflate faster than your position increases in value etc.<p>---<p>[1] Commodity come with additional shorter term market volatility and risks - due their own supply&#x2F;demand volatility and depend performance of economy.<p>However after assets like Gold, they will have highest correlation of returns against inflation as long the economy doesn&#x27;t completely crash, because the demand for them is foundational
        • loeg42 minutes ago
          I don&#x27;t think GP is suggesting any particular bet isn&#x27;t priced in some currency, just that you&#x27;re also taking currency risk you might not be aware of.
    • bequanna2 hours ago
      Said another way: “being too early is the same as being wrong”
      • cal_dent21 minutes ago
        I’d change to “can be the same as being wrong” and agree. All these people out there thinking their being oh so clever with bubble this short that etc. Everyone knows.<p>One of the idiosyncrasies of modern human society is that we’re pretty good at knowing how things we create or initiate can go wrong, particularly with the economy. We’re just not great at perfectly understanding the degree of risk or the probability or at what point&#x2F;level it goes wrong. That’s why I’ve never really got all the chat of “economists have predicted xx of the last x recessions yadda yadda”. I’m fine with that, I’d be more concerned if they predicted 0 of the last x recessions.
      • fhrjfjfnd2 hours ago
        Your quote is something that AI mania speculators often like to reassure themselves with, but consider the fact that it took 17 years for the NASDAQ to recover from the dotcom bubble when adjusting for inflation. What&#x27;s being early by a year or two when the consequences take <i>decades</i> to heal over?
        • loeg46 minutes ago
          The Nasdaq 17 year figure is only true from the peakiest peak of ~4800 in March 2000. Two years earlier, in March 1998, it was at 1750. It had hit 1750 again by August 2023.<p>All this to say... shorting 1-2 years early doesn&#x27;t work. You don&#x27;t have the patience or capital to actually maintain a short position for two years while the market goes from 1750 to 4800. You can cheaply sit out in cash, if you want, but that&#x27;s not a <i>short</i> position. And the S&amp;P500 hasn&#x27;t seen the kind of 300% run-up over an 18 month period that Nasdaq did in the dotcom boom.
        • wmf2 hours ago
          If you short a bubble before it goes vertical you lose everything.
          • fhrjfjfnd2 hours ago
            See the other posts in this thread discussing Nassim Taleb&#x27;s strategy of small bets spread over time with highly asymmetric rewards. You can afford to lose it all on small bets nine times in a row, if on the tenth bet you achieve a 100x payout.
            • the_gipsy1 hour ago
              Yea but where can I play that kind of game?
              • CamperBob21 hour ago
                Just get a job as a principal in a VC firm. Upskill or gtfo
    • matt321032 minutes ago
      The market is rational. If it&#x27;s is not doing what you expect, then you are the irrational one.
    • the__alchemist2 hours ago
      Thought terminating cliches only terminate thoughts if you allow them to.
    • DaveZale2 hours ago
      also you may have to pay interest on shorted shares. Better to take a Burry&#x2F;Taleb approach of extreme option bets with small money.
      • treetalker2 hours ago
        My understanding is that an extremely OTM put on a clear, strongly held thesis would be Burry-like, and many people would be able to do so.<p>But Taleb&#x27;s point is that (non-insiders) cannot accurately predict regarding individual securities (hence derivatives), but can identify over-&#x2F;under-priced OTM options — and that, trading these systematically, one can suffer many repeated &quot;small&quot; losses that become outweighed by the Big One that eventually (yet unpredictably) hits, thus generating overall positive expected value. But, as I further understand Taleb, most people don&#x27;t have the huge capital that enables such a strategy, and that doctors, lawyers, dentists, etc., are better off making money by plying their professional services and perhaps investing in index funds and the like.
        • the__alchemist1 hour ago
          How do you take advantage of these options without getting screwed by the bid&#x2F;ask spread? Whenever I think I see one, the spread kills it for me.
          • sitzkrieg1 hour ago
            look at strikes where higher OI is. everything will be arbd out by bots on anything that isn&#x27;t thin though. i trade futures for this reason though, because they are actually centralized unlike us equities. selling calls for a credit or spreading into free long entry is a better strategy in every way though.
          • fhrjfjfnd1 hour ago
            Buy the options with the intention of them either hugely appreciating in value or expiring worthless. Under Taleb&#x27;s system, your bet sizes should be small enough that it doesn&#x27;t matter if individual options tranches expire worthless. The bid&#x2F;ask spread only matters when you try to cut losses on a large bet, which is outside the scope of this strategy.
      • oa3351 hour ago
        You will end up paying that &quot;interest&quot; on long put positions. The advantage of options is an ability to make more granular bets.
      • hypeatei2 hours ago
        You also have to pay dividends on the shorted shares.
    • bdangubic1 hour ago
      this statement could be just replaced with TSLA :)
      • rasz47 minutes ago
        Nicola scam was still worth real money a good year after CEO conviction.
  • iloveurcelsnuf7 minutes ago
    &quot;how to take a mom from a toddler&quot; when nobody is around?<p>I bet there&#x27;s an entry in some dude&#x27;s journal from the 1100s
  • skybrian2 hours ago
    <a href="https:&#x2F;&#x2F;archive.is&#x2F;TJAfs" rel="nofollow">https:&#x2F;&#x2F;archive.is&#x2F;TJAfs</a><p>It&#x27;s pretty clearly not a &quot;how to&quot; that ordinary people can practically use. More like &quot;How someone else might do it.&quot;
  • the__alchemist2 hours ago
    I got in on 4 of the big quantum computing stocks ~a month ago. I haven&#x27;t felt this good about a short since Nikola; one of the few times I will use &quot;money left on the table&quot;.<p>I miss Hindenburg.<p>Unfortunately, most of the scammiest companies (e.g. ones you hear about on HN) are not IPOed, so you can&#x27;t short them using traditional methods. I&#x27;m glad the article points out some non-traditional ones, but I&#x27;m not clear on how to actually do it.
    • delichon1 hour ago
      I hope you lose a lot of money on at least one of those positions. I want to be in a timeline where quantum and AI computing grow up together.
      • rimbo78955 minutes ago
        So you want all the humans replaced then?
        • osiris97039 minutes ago
          Automation is inevitable, has happened non-stop since the industrial revolution. Imo we should never &quot;protect jobs&quot; when in the end they will hurt the vast majority of other people.
        • delichon52 minutes ago
          I want minions.
          • Nextgrid7 minutes ago
            It&#x27;s more likely <i>you</i> will be the minion doing menial tasks (that aren&#x27;t worth automating because unskilled human labor is unbelievably cheap), while all the better-paying, intellectually-engaging jobs have all been automated away.