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Comment by cmiles8 | Hacker News Reader

Not financial advice, but: Honestly it’s pretty hard and I wouldn’t recommend it. Shorting stocks and getting into bonds / default swaps but the system is broadly rigged against small players doing well here. Ie in the Big Short see everything that was needed for two guys to bet with their own money.

It’s likely to be bumpy for all but stay the course with diversified strategy. The .com bust and 2008 are just blips and cheap buying opportunities for most folks with diversified portfolios and index funds. We’ll likely see similar messy markets for a while but the world will eventually recover and move on.

The ones that get truly wiped out are those with a lot of paper wealth now that implodes, but have little liquid wealth. These types go from “super rich” to can’t pay their bills almost overnight. Cash is king for times like those ahead so if you don’t have a lot of cash on hand, now is the time to secure that if you can.

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Heck, it's pretty rigged against big guys too. The subprime bubble was not something that only Michael Burry knew about -- it was a front page story on the Economist several times years before the crash.

There were lots of big guys that bet against the bubble, but bet too early and weren't able to keep up with margin calls etc.

“Markets can remain irrational longer than you can remain solvent.” - John Maynard Keynes

As well, I have a feeling that market dynamics have evolved a tad since 2008, from the influx of retail investors (redditors, if you will) who seem keen to "buy the dip" on general principle. So, who knows how poorly a short position on the wrong instrument or at the wrong time can even land.

> Not financial advice, but: Honestly it’s pretty hard and I wouldn’t recommend it. Shorting stocks and getting into bonds / default swaps but the system is broadly rigged against small players doing well here. Ie in the Big Short see everything that was needed for two guys to bet with their own money.

Do you base your knowledge on anything other than a very mediocre movie?

If an "investor" believes the market will sell off drastically, there are many, many ways they can express that bet in the open market. They can short index futures, buy put options, long volatility... so many options that depend only on the thesis being right. It does not sound as sexy as "look kid, the billionaires rigged the system!", but it's true.

The problem is the old saw about the market staying irrational.

You can't time the market reliably. Ultimately the base advice remains sound even if it's couched in a bit of conspiracy: diversify and allocate your assets based on your risk profile, as informed by your retirement timeline.

> You can't time the market reliably.

There's an entire profession doing that: traders. But for most people, yes, it is not worth it. No argument there. I just don't like conspiracy theories and that line of thought, it's cheap and stupid.

> There's an entire profession doing that: traders.

Well no, there's an entire profession trying to time the market. The data is not favourable as to their ability to actually do it at a rate greater than random chance.

But.

I also don't think it's reasonable to label as a conspiracy a claim that markets are rife with cheating, insider trading, etc. Just look at the current US Presidents profit margins.

Is that systematic, organized, conspiratorial, rich v poor market rigging? No. But it would be naive, I think, to believe that the rich aren't significantly advantaged in the market in ways that the average person isn't. There is, after all, a reason payment for order flow exists as a valuable thing.

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