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As they say in the biz: post shorts.
I've been out of stocks and in treasuries for a while myself, so I'm not about to paint a rosy picture of the coming recession, but if you believe the market is always right you would have to believe they were right about a whole bunch of rate cuts that didn't happen just in the past few years. And if you believed the experts (rather than the market) you'd have been even more wrong.
Markets aren't magic, they're just the aggregate of what people with skin in the game believe. Them being wrong happens all the time.
While I agree with the sentiment here, I think this illustrates why successfully shorting the market is so much harder than it looks. If you looked at Trump’s economic proposals during the campaign, thought “man, this will wreck trade,” and then shorted the market immediately after he got elected, you ate shit. If you shorted the market early February when Trump signed an executive order to impose 25% tariffs on Canada and Mexico, you didn’t make diddly squat. You would have had to short the market the last 6 weeks specifically in order to be in the money. There was no real way a priori to know that this is when the crash would be.
I second all of this. I have messed with shorting a little (although usually by options rather than naked shorts) and it's a lot harder than being long. You're paying interest the entire time, and when it goes against you, you effectively get more leveraged, increasing your risk even while you think "cmon, this price is totally irrational, when is the bubble going to burst already!?" I know some perma-bears who have been predicting doom for the past 10 years (just from market valuations, nothing to do with Trump) and they keep getting proven wrong.
In general shorting macro events is extremely dumb. Some people are super geniuses / very lucky (it is not worth litigating which), but there’s a reason most short strategies are the result of relatively diligent research / low key or high key non-public information, narrowly construed, and limited. “Short the market if you think there will be a crash” is always a dumb thing to say. Unless you have non-public information about a market wide trigger (like a major bank about to report a huge increase in mortgage delinquency) the smart move is probably to take money out and wait.
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Where is your money atm, if not the market?
Bonds, gold and bitcoin. Mostly bonds.
There is bound to be pain, but long term Bitcoin trades like an option on its own adoption, and the current administration is quite favorable to the industry in general and to it in particular.
The recession outlook entirely depends on whether or not it's seen as a safe haven. If state and financial system adoption continues or hastens, those shocks won't matter and it'll behave like a better gold.
If it doesn't and nobody cares because everyone is buying a gold backed BRICS currency or gold directly, it'll be the worst asset to hold in 2026, even worse than stocks.
I hold it as a hedge, like the rest. But if you want some real alpha, I think that tokenizing stocks and general financial engineering around bridging crypto and the regular financial system is going to be the next big thing for that industry. Exchanges all have products like that rolling behind the scenes, Blackrock has been positioning itself in that area and with a SEC that isn't persecuting the industry anymore, people can start to do things again.
I'm unsure how that particular kind of financialization will interact with a contracting economy, but it will. GameStop trying to shore up value by buying Bitcoin might be a template for others. Or it might not.
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