I tend to talk a very pessimistic game when it comes to the economy. I talk like a bear. I tend to act more like a bull.
Rex Hammock made a great comment on twitter today:
I think we’re at that point when you should start shorting fear and go long on greed.
On my things to do before I die post I included “short a stock”. While I don’t have the capital required to really short a stock right now, I am going to try and take Rex’s advice here because I think he is right. Fear is at a very high point right now (and there is no shortage of fear in my voice either). Sure, fear my rise before this is all over, but it will go back down to normal.
The thing is, when you short a stock you buy it for today’s price and hope it goes down so you can sell it. The problem with fear is that many people are living without a buffer each month. There is no money to set aside and “short fear”. If the market gets worse there will be people who can no longer make ends meet and that is some scary shit. I am mostly sure that will not happen to me, but that little bit of doubt is terrifying.
Going long on greed is a little easier to do. Now has got to be a great time to buy index funds. Sure, there are some better undervalued picks than market funds right now, but they are hit and miss. Like Rex’s sentiment above, I am confident the US market will rebound and thrive again in the future.
