Short selling is not for the faint of heart.
While most retail investors should avoid short selling, many individuals and short managers thrive at it. Real Money Pro contributor Doug Kass is one of those people.
Among other things, Lang asked Kass about the mindset of a short seller. Kass plotted out several good reasons why it’s difficult if not totally impossible for one to be short and successful over the long haul. He mentioned that having both shorts and longs simultaneously creates the balance needed and perhaps win in both directions simultaneously. Kass mentioned the importance of using index puts and shorting the indices, particularly at a time of speculative excess (as he and Lang are in currently).
Other talking points in the video above:
- How to fight the generous monetary stimulus from the Fed that has been turned on ‘mostly’ since 2008.
- The GameStop ( (GME) - Get Report) stock saga, which was a great lesson for all as we watched the greed/fear in real-time. While the fundamentals of GameStop are/were poor and well documented, Doug ticked off reasons why this stock should not have been shorted.
- In the recent game of SPACS, Doug agreed that the rise is a concern for the markets and is fueling even more speculative juices, comparing this bubble with the 90’s Dotcom period.