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Short-Sellers' Paradise

Who stands to make money when markets are weak?

The Big Boards

When recessions and depressions strike, only real men and women of thought and ability are able to surmount the difficult times. Those who get swallowed up by debts and other calamities experience this not because they are stupid or lazy, it’s because they have not found a foolproof plan to counter any catastrophe. In recent days, the stock market has proven to be weak. Large sell-offs have made investors skittish. The short sellers are the real heroes of these times. They know when to short and when to cover. If they perform with excellence at their task, they can expect significant returns that other investors would only crave.

The news cycle will tell you that investors are nervous about this or that or that worries concerning trade in a country outside of the United States is what is driving the sell-off. In reality, the short seller with intelligence is gaining on the market because while everyone is running around with their hair on fire, short sellers are calm and methodical in their ways. They know that when markets turn weak, it is time for them to employ their strength of mind, of character. To short sell is to announce that you know that a given stock will weaken. You will be able to short at the peaks and cover at the troughs. Fear and anxiety are part of an elixir that prompts the market to go in a given direction...or not. This bitter combination can lead to the downfall of many fortunes and fulfill the worst part of being in the market; losing money. Now, losing money is almost always inevitable in the market. It is pain. But without experiencing the aches and pangs of losses, you will not be able to enjoy the gains and wins once those happy days come along again.

Whether the DOW Jones Industrial Average is weak or strong, there are still people making money in the market. The short seller will tell you that it’s better to have a smooth, steady rise rather than high mountains and low valleys. There’s a sweet spot for the investor to find him or herself in within the context of weak markets. They can scrutinize and make their profits grow by anticipating the bearish market.

When markets show red, it is the short seller who rejoices (usually) because they are able to discover where the money will go in the future. As the numbers head south, he or she will be encouraged to sell at the optimum time. Millions of dollars worth of game go into information that is ninety-nine cents. This hushed world where only the select few can tap into and comprehend markets is for the thoughtful, the patient. Traders know that when session lows occur, they should be able to have saved up enough money to replace any losses. It is the wise investor who seeks out even more information based on the volatility that is inherent in the market.

Dollars flow no matter what the market is doing. There is quiet money all around the globe. Offshore accounts continue to accrue millions and sometimes billions of dollars for investors and other businessmen and women who know just when and where their money ought to be stored. So, with the major sell-offs, there is little that can harm such individuals. It is important to note that the short sellers are not in the pocket of the government, are not beholden to the financial press, or raters and regulators...to an extent. They still must abide by the vicious controls that plague the market. But the best thing is that they can figure out with legions of lawyers and accountants how to, within the law, circumvent the regulators.

With price being primary, short-sellers know that there will be days of losses. As the market stabilizes, these men and women of the mind determine the fate of their own lives.

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Short-Sellers' Paradise
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