Reuters Writes: Insight: Shorts set to pounce as stocks seen pricey, Fed pulls back
NEW YORK (Reuters) – After years of hiding under their desks, short sellers are re-emerging – slowly.
Investors who make a living betting that stock prices will fall are happy to forget 2013: The S&P 500 gained nearly 30 percent while Credit Suisse’s index of hedge funds with a dedicated short bias lost 25 percent.
Jim Chanos, president and founder of Kynikos Associates and one of the most prominent short sellers, said the market is primed for people like him and as a result he has gone out to raise capital.
“Now I think is not a bad time to be raising capital for what we do. When we got a rough going in the mid-90s, that was exactly the time to raise capital,” Chanos said, adding it was better to do this when critics viewed him as “like the village idiot and not an evil genius.”
There was a flood of similar articles over the weekend. If you have read my blog in the past, you know that I would agree.
The investment thesis for most short sellers is right on the money. After all, by most measures the market is significantly overpriced. I know the merits of any valuation work (either for individual stocks or the overall stock market) can be debated, but one thing is not. I am unable to find anything to invest in. At least for me, this is reminiscent of the 2000 and 2007 tops where the selection of undervalued stocks was nonexistent as well.
Now, we all know that the stock market has been driven up by massive credit infusion by the FED, speculation and certain factors behind my “mathematical timing work”. There is no doubt, at least based on my work, that the market is set for a significant drop here. Yet, shorts must be very careful here. Proper timing should be their number one priority.
As such, while the article galore predicting a large drop in the stock market is right on the money, I wouldn’t short “Right Now”. Based on my mathematical work the rally is not yet over and shorts should wait for a few more months or a technical confirmation before taking any meaningful short position.
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Short Sellers Are Getting Ready. Should You?
Iam with you on being bearish on stocks. but not on gold and silver. do the math
stock market world wide 100 Trillian
bond market world wide 100 trillian
When Both stock and bond markets sell off min 50%. the flood money will flood both gold and silver. the euro will die not the all powerful usd. Math time
money50 trillian/500million ozs of silver= $100,000 per oz and 50trillian/250million ozs of gold= $200,000
Math time
Hi John,
Thanks. I never said I was bearish on gold or silver. I do talk about Gold on my blog, please search “Gold” to see it.