A Day of Disappointment for Shorts

By iamned - Last updated: Thursday, May 21, 2009 - Save & Share - Leave a Comment

Closing update.

I was wrong. Yes, the big white candle failed, but today was a bigger disappointment for short sellers than bulls, despite a lower close. For one, stocks ended near their high, and second the magnitude of the selloff was insubstantial. Considering the S&P 500 is up 33% from its March lows, a 1.4% retracement is kinda a joke.

The pain will continue on Friday. No one who shorted today made money because of the end of day surge.


Job loss isn’t a big deal, which is why the sell off was subdued. The new baseline of unemployment will rise from 4.5% to 7-8% by 2020 due to improvements in efficiency, but the GDP growth will return to levels last seen in the 90’s. Investors who short the market based on supposed ‘gloomy’ job data will suffer large losses because economics isn’t a rational science. If you invest using your heart and not your brain, you will fail.

Easy fed policy, laissez faire capitalism and the ‘Goldilocks economy‘ is the driving force of this unrelenting bull market. Job security, welfare FDR type liberalism, employee benefits, affordable quality heath care & education, frugality, high employment, unions, and isolationism/protectionism are relics of a bygone era. They are never coming back.

That’s why you BUY & HOLD the same stocks I have been recommending on iamned like GOOG, AAPL, MA, V, BIDU, RIMM, POT, MOS, EWZ, FXI, GS, and BIDU.

Posted in Uncategorized • • Top Of Page

Write a comment

You need to login to post comments!