Retail investor: Market's at all-time highs so I opened a short position. Easy money on the way down.


Me: You know the market goes up like 3 out of every 4 years, right?
Retail investor: Yeah but it's DUE. It can't keep going.
Me: People said that 40% ago. & here's the ugly part about shorting... when you buy a stock, worst case you lose 100%. When you short, your loss is UNLIMITED.
Retail investor: I mean, it can't go up forever...
Me: It doesn't have to. It just has to go up longer than you can stay solvent.
Retail investor: So what do you do when things look expensive?
Me: I get careful. Close some sold puts, take profits on bought calls, demand deeper discounts, tighten ratios, add bonds. Being cautious pays. Betting AGAINST the whole market... that's fighting a machine that's gone up for 100 years.
Retail investor: Careful, not short.
Me: You don't have to bet on the crash to be ready for it.
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