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I predict, that in the future, there will be a recession. Also, at some point, an economic boom. Feel free to quote me on that.

I am unable to give exact dates, but there is a 25% chance that it will begin in the spring (what year, I cannot say)




I'll go even further and day that it will go up and down again continuously. An "economic cycle" if you will.

You can quote me on that too! :-)


I'll nail it down a little for you. I think it's going to be within two years, based purely on asset valuation : income ... which isn't a particularly sophisticated way to analyze it, but when people can't afford things anymore, they stop buying them, and that has predictable effects.


I think you should both put your money where your mouths are: longbets.org


Don't even need Longbets; just invest in or short the stock market.


Shorting is very risky, since the downside risk is unlimited if you guess wrong. (Imagine shorting Microsoft based on the low quality of their code, sometime around MS-DOS 1.0.) It's better to buy businesses that will go up when the market goes down, or ones that are recession-proof in general, while avoiding cyclically sensitive businesses and, especially, any sectors that are about to have bubbles burst in them.

If the near future is the unicorn version of the dot-com bubble, its aftermath would be a good time for tech stocks you're interested in.


Options, then. Buy a put option and your downside is limited to the cost of the option; you just get nothing if it's out of the money.

My point is that there are plenty of financial instruments that exist precisely so you can "put your money where your mouth is".


Options vs. shorting are just two different ways to risk all your capital on a bet... the "unlimited" downside of a short position has a practical limit--it's when your broker forces your account to cover with buys (the short squeeze) and you zero out.


You describe selling a call. Not buying a put. (jessaustin is right about these.)


No, I described the practical downside exposure of a short (or, the trader could put in a stop). It is no more "unlimited" than is the downside of buying a bunch of ultimately worthless options.


Unless your options trade on an exchange, and they have a clearing house behind them. (The government doesn't let the clearing house fail.)


Buying an option only risks the cost of the option.


Agreed. I've done that in the past and done quite well, but when I got married I dumped all my non-retirement portfolio. 6% guaranteed return paying down student debt (plus getting rid of payments, which hadn't been something I'd dealt with before) beats playing games in the stock market for me. Plus, I like to make my bets while the market is already on the way down ... during the last recession I started buying on the way down (after prices had already dropped quite a way), and stopped when the market got back to where I'd started, which worked out quite well. I did most of this in my 401k and IRAs (to the limits allowed by the contribution rules), so I also scored tax benefits :). Biggest non-retirement bet was buying a house in early 2011, which also turned out to be a decent thing to have done in my market ... although I think that there is a significant possibility that the gains in value due to the market will be wiped out in the future.


wow.. didn't know such a site existed...will definitely point more people to the site when they keep making these types of predictions. That was such a fun read (looks like the site has been around for a long time)


If you strongly believe this, you could do something similar to what the guy did in 'The Big Short', short the relevant markets within your timeframe and you'll be recession proof.


That forgets the primary lesson of the film: markets can remain irrational longer than you can remain solvent, and doubly so for rigged markets.




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