I advise you to develop the habit of not short selling.
Otherwise it will definitely go bankrupt.
It has never been easy to make money in the financial market; it is even more difficult to make big money; it is even more difficult to make big money when the market is falling and the economy is depressed.
The characters in the movie "The Big Short" appear to be prosperous, but are actually miserable. In hindsight, they were very successful and made a lot of money during the financial crisis and when people were devastated. However, looking ahead, this success is uncertain, full of uncertainty, and very costly. In fact, it is extremely difficult to make money in times of crisis.
In "The Big Short", the CDS they bought were equivalent to buying insurance on real estate mortgage bonds, and they had to pay a huge monthly fee, equivalent to a premium. If the years are quiet, their investment will be lost forever, with no end in sight, and the time cost of waiting is huge. In fact, at the beginning of the crisis, their opponents, the big banks, were not ethical and refused to increase valuations, which was equivalent to insurance refusing to pay out. If the subprime mortgage crisis had not erupted in 2007, but had been delayed until 2009, none of the heroes in "The Big Short" might have survived.
Of course, some smart people will suggest that you choose a good time and buy just before the crisis breaks out to avoid high time costs. In this way, review can be done after the fact, but it is impossible beforehand.
This involves the characteristics of short selling: it is extremely difficult to choose the right time point. When the market rises, you always sit on the escalator, starting slowly and gradually moving upwards. However, when the market falls, it is like sitting down in an elevator, going straight up and down, and falling vertically.
These two directions are asymmetrical, the short-selling window is extremely narrow, and the time point selection is extremely difficult. The characters in "The Big Short" essentially pay high fees, exchange time for space, and wait for the opportunity to short.
