Your broader point is well taken though and should be heeded. One of my worst days was in the middle of the '08 meltdown, short a bunch of banks and financials...and they banned short-selling banks and financials. Ouch! The path to zero was not a straight line!!
Your broader point is well taken though and should be heeded. One of my worst days was in the middle of the '08 meltdown, short a bunch of banks and financials...and they banned short-selling banks and financials. Ouch! The path to zero was not a straight line!!
I remember there was some surprise rate cut (mid-meeting) in 2001 or maybe 2002 that just ripped everything higher. If I remember right, it was like a 10% and then an 8% up. And then it just melted for months after that. It was strange because there was fear, but to the upside.
People underestimate how difficult it is to hang on to a short during a relentless bear market.
I wasn't trading in the '70s (I'm an apathetic Gen-Xer), but that Mar 2000 to Mar 2003 was a brutal grind lower. Every bear market since then has bounced in a year or less (I guess the GFC crash was a little bit longer), but I worry the BTD mentality in the next bear market is going to take a lot of people out if they expect every big rally to be "the" bounce. I do think the Fed put strike will be lower if inflation remains elevated. Bailing out the asset owners while the majority are suffering from higher food and energy prices will be a bit of an obstacle in deciding to cut rates. As you always say, it doesn't matter what I think should happen, just what I think will happen.
Kent - I think that this one will be different in that it will be in a real select group of stocks. Everything that everyone rushed into during COVID with so much gusto will be for sale for probably years. But I expect that real economy stocks can actually rally. So, it's going to look much different than 2000-2003 IMO.
That's my $0.02.
Thanks for sharing all your views. Have a great night, Kev
Your broader point is well taken though and should be heeded. One of my worst days was in the middle of the '08 meltdown, short a bunch of banks and financials...and they banned short-selling banks and financials. Ouch! The path to zero was not a straight line!!
I remember there was some surprise rate cut (mid-meeting) in 2001 or maybe 2002 that just ripped everything higher. If I remember right, it was like a 10% and then an 8% up. And then it just melted for months after that. It was strange because there was fear, but to the upside.
People underestimate how difficult it is to hang on to a short during a relentless bear market.
I wasn't trading in the '70s (I'm an apathetic Gen-Xer), but that Mar 2000 to Mar 2003 was a brutal grind lower. Every bear market since then has bounced in a year or less (I guess the GFC crash was a little bit longer), but I worry the BTD mentality in the next bear market is going to take a lot of people out if they expect every big rally to be "the" bounce. I do think the Fed put strike will be lower if inflation remains elevated. Bailing out the asset owners while the majority are suffering from higher food and energy prices will be a bit of an obstacle in deciding to cut rates. As you always say, it doesn't matter what I think should happen, just what I think will happen.
Kent - I think that this one will be different in that it will be in a real select group of stocks. Everything that everyone rushed into during COVID with so much gusto will be for sale for probably years. But I expect that real economy stocks can actually rally. So, it's going to look much different than 2000-2003 IMO.
That's my $0.02.
Thanks for sharing all your views. Have a great night, Kev