Shorting This Market

Just last week, I added some to my blanket positions in Bear ETFs, mainly TZA. I also own TECS, FAZ, SD and  BIS.

None of these are large positions. Altogether I am in negative numbers. I would rather not be, but given my system of trading, that is unavoidable sometimes.

I am not short a single share yet, but I will be. Today’s traders are accustomed to bear markets that snap back like a jack knife. That is not going to happen this time. I am looking at a decline that lasts no less than two years.

So, I am not in a great hurry to load up on shorts. The ALGOs control the direction of the market, but only to the upside. The ideal time to short is when the ALGOs are no longer relevant. When long term holdings start hitting the market, they will be helpless with respect to their trend guiding efforts.

My goal as a trader is to get in and stay in whether long or short for the duration of a move. I would be short up to my neck right now, if the market was not so adeptly rigged up to this point. Further, I don’t know what heroic steps the government will take on behalf of our betters, in terms of a wealth saving programs. I think we can count on some collective efforts to save those who count.

I never use stops.  With the ALGOs in charge, a stop is as much as a guaranteed loss. Without the ALGOs, I don’t need stops anyway.

The ideal short for me is a stock that will eventually fall off the board and land in the corporate grave yard. After a bear market is over, many stocks will be destroyed. My hope is to never have to cover.

So, what I am looking for are stocks that are not going to survive. I don’t have a list yet. I am at best an average stock picker. If anyone has idea with respect to good short sale candidates, I am listening.

My first criteria in this effort is a company’s utility to society. As corny as this may sound, stocks with no utility to society are the ones that end up on the pink sheets sooner or later. Big tech, Big Pharma, Big Insurance and others currently have a negative utility over all. In other words they only take and never give. By give, I don’t mean by means of charity. I mean, those which in one way or another enhance lives over all. The industries, just mentioned have enormous political power.  That power is diminishing rapidly. A better bet is to find the smaller players in these industries and short those.

I don’t have the time to research all of the opportunities. No no one else does either.  That is why I am suggesting collaboration.

None of this is advice. It is just what I am personally doing. If I ever give you advice, don’t take it. I can be right ten times in a row, and then give advice. it almost always backfires.

 

(Visited 10 times, 4 visits today)
0 0 votes
Article Rating

About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
This entry was posted in Daily Comments. Bookmark the permalink.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments
Inline Feedbacks
View all comments