no, its just america. on the way down its protected, everyone knows it and is in on it. NOONE benefits from the market going down. Hedge funds know this and push the envelope especially when the King of Liquidity speaks.
Exactly. It's called 'moral hazard' and it's dangerous. It causes a disconnect between financial markets and intrinsic value such that, when the chickens finally DO come home to roost, markets go down with a vengeance. I guess it goes some way to explaining why downs are always faster than ups too.
During the internet bubble, every monkey and his brother led every trade with a buy, and you couldn't lose. Until everything got smoked. At the peak, I would get buy recommendations from the local grocer. The pendulum swung the other way to the extreme. Every monkey and his brother now leads every trade with a short; a concept the general public would have previously never endorsed. Now I have the local grocer and the bum on the subway telling me to go short because of some "pending accounting irregularity" or some "pending lawsuit". The same idiots who came into the market to buy at the top are the ones now coming in to sell indiscriminantly. Instead of "always leading with a buy" or "always leading with a sell", how about leading with your brain. If the situation warrants a buy, then buy. If it actually warrants a sell, then sell. But a predetermined preference in the market one way or the other, and you can get burned.
I doubt there are many grocers or bums on the subway set up to short the futures markets. And, with mutual funds currently at 3.6% cash on aggregatet, there are clearly few of them practicing what you say they are preaching. Not many times in history when they've been so fully invested in fact - and that includes the run up to the 2000 dotcom bust. After the past week they're probably down to 2.5%. I don't have a pre-disposition, but I reckon that's foolhardy. I wonder what will happen if and when they decide - in unison - that 5-15% might be safer? Should be fun
Shorting and going long...will always be viable strategies...in any market for any product... The long only crowd of course is most highly represented by the outstanding mutual companies.... And of course...securities laws are set up for a public upward biase... Whoever is responsible for this line of thinking...is at best...incredibly naive ...or drug driven...
So no one benefitted when the COMPX sank from over 5000 to 1500? LOL There was a ton of $$$ made back from 2000 to 2002 on the short side. As an example, I shorted VTSS at $96. Take a look at where it is today. You clearly don't get it. Lots of people made money shorting an overvalued market. And lots of people make money each and every day shorting stocks.
Better still, what will happen when just a few % of investors decide their money might be safer in gold - or under the mattress. With the current fractious state of consumer confidence, it looks like an accident waiting to happen to me. Which of course is why we need a constant bullish refrain from the Wall St cheerleaders.