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Comment by _zoltan_ | Hacker News Reader

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Why do people persist in repeating this dumb meme? Tyler Cowen, who should really know better, does it too. To be profitable shorting, you have to not only be right about the direction of the market but you have to time it precisely. Shorting is not 'I think the market is going to decline at some point in the future', or else we'd all do it.

You're borrowing to short, and your broker can call your loan at any time for any reason or no reason at all, including 'our risk algos felt nervous this afternoon'. If you try to short a stock or ETF and the market surges in a dead cat bounce before declining, you get completely wiped out even if you're going to be eventually right

>> To be profitable shorting, you have to not only be right about the direction of the market but you have to time it precisely.

It's even worse than that, you also have to get the price right. If everyone wants to short the same stocks, it's going to be expensive to do so.

no, neither of you are right. to short you just need to buy ATM puts. while technically not the classical short, if you believe it's downhill from there, this will pay.

get ATM into 2028dec and you're good if it crashes.

I going to defend Zoltan here and say the comment they responded to had about the same level of thought. "I read the market is overvalued" is no different than asking about short positions. I've been reading about the market being overvalued for like a decade at this point, meanwhile we've had the longest bull market in history. I feel for all the people who have been sitting cash all this time because they heard somewhere things were overvalued.

The train of thought is 1. The economy is making me nervous. 2. You're right to be nervous. 3. Then what are your short positions, since you're so smart?

Non-sequitur.

There’s no such thing as an easy short. Going short doesn’t mean predicting a downturn, it means being precise in your predictions about when that downturn will happen. Look at the last few major stock market drops and try to retrospectively time when they would happen from the moment all of the underlying causes of the upcoming crash became apparent: in most cases you get a huge range of values.

As John Maynard Keynes supposedly said, and I've seen play out over the past quarter century, "Markets can remain irrational longer than you can remain solvent."

Cheap shot. Going long is easy, going short is very risky even if you get the general trend right.

John Maynard Keynes — 'Markets can remain irrational longer than you can remain solvent.'

"Nervous" does not equal "sure that it's going to go down".

Yes I didn't mean it's certain to be ruinous! But wow, things have changed fast.

Or even "sure what the right move is".

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