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 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.
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.
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)
