Best way to make money as the market goes down? (coming recession?)

[JohnnyDoe]

what you really want to do is wait for $6 oil

and go bankrupt when it reaches $-40
Something that was thought to be impossible.
Nobody is smarter than the market.

 

[avalanche]

If you know what the market will do, what’s the problem? If it goes down, short it with as much leverage as you can, use options, futures, whatever instrument you have available and you will make a ton of money

It works best in fantasy world though, given that there's always space for a juicy short squeeze or broker declaring "bug in a system"

 

[alistera]

and go bankrupt when it reaches $-40
Something that was thought to be impossible.
Nobody is smarter than the market.

Yes there are those that are smarter, the market has momentum not intelligence, you need to be careful about your asset references, you are mixing them up.

 

[JohnnyDoe]

Yes there are those that are smarter,

They must be real geniuses or have paranormal abilities to be able to outsmart millions of participants, including the most powerful computers.
We will always see a new master of the universe coming up with astonishing results, and we will always see him disappearing eventually.

 

[alistera]

They must be real geniuses or have paranormal abilities to be able to outsmart millions of participants, including the most powerful computers.
We will always see a new master of the universe coming up with astonishing results, and we will always see him disappearing eventually.

Apparently you do not understand the numbers behind contextual analysis via supercomputers, quantum computers and highly experienced professionals.
Yet there are people and entities which did just that and are still around today, people always have that view when they can't do it themselves unknowingly working for free.

 

[JohnnyDoe]

Apparently you do not understand the numbers behind contextual analysis via supercomputers, quantum computers and highly experienced professionals.

That's a real superfugazi

 

[diatessaron]

Are the shorters okay tho? Someone ask ChatGPT how to break into a Bitcoin wallet.

 

[DarkRevoMan]

What are some of the best ways to make money during a recession? Make money off the market by shorting it? (use a etf to short the market as a whole?, wise to use a x2 or x3 short etf?).

Other better options?

I acquire businesses and improve them. Downturn creates more opportunities.

I also aquire real estate and improve it. Down turn also create more opportunities there.

 

[princeofprofits]

"The time to buy is when there's blood in the streets, even if the blood is your own." - Baron Rothschild

2001 - equity crisis
2007 - bond crisis
2013 - taper tantrum (emerging market flight to usd)
2023/2024 (my opinion) - sovereign debt crisis (fundamental lack of confidence in Central Banks after weaponization of SWIFT and turbo money printing)

Don't bother timing a recession... keep in mind recession is a lagging indicator. Markets are way to manipulated to predict exactly when. Momentum trading is akin to playing a casino... caveat emptor (buyer beware). Day trading is stressful but can be rewarding for those with the correct appetite for risk.

Stack cash (or precious metals if cash is loosing too much purchasing power) and wait for the crisis to take place. When there is structural failure and chaos you make your move and rotate into assets that are at fair value.

 

[void]

When there is structural failure and chaos you make your move and rotate into assets that are at fair value.

the big question is which traditional assets are worth the exposure and cannot be seized, heavily taxed or diluted in the unprecedented times of collapse we are most probably heading towards

 

[princeofprofits]

the big question is which traditional assets are worth the exposure and cannot be seized, heavily taxed or diluted in the unprecedented times of collapse we are most probably heading towards

I agree, that's the quadrillion dollar question. I personally think equity markets are overrated and way too risky. One "bank holiday" away from loosing your shirt. Between bail-in legislation for deposits, shilling for CBDC, AML hysteria, war on cash and fundamentals that dont matter anymore markets are a crapshoot beyond this week.

Concerns about asset seizure and taxation are what brought me here to OCT

Personally I'm looking at traditional service businesses that are recession proof like scrapping/auto recycling, sewage, excavation, etc. Also looking at liquid luxury goods that have global brand recognition and can be sold online globally like collector cars, watches, luggage, etc. Call me old fashioned but I still see good reasons to stick to a contrarian mindset.

 

[backpacker]

2023/2024 (my opinion) - sovereign debt crisis

No, we are not even close to that. Just because of the bankruptcy of a few US bank (interestingly, all had significant exposure to crypto) + a dubious Swiss bank every half way decent local shunned, doesn't mean there is "blood in the streets".

Personally I'm looking at traditional service businesses that are recession proof like scrapping/auto recycling, sewage, excavation, etc.

That's a good idea, indeed. No matter what anybody thinks about the current state of the global economy.

Also looking at liquid luxury goods that have global brand recognition and can be sold online globally like collector cars, watches, luggage, etc.

Only looks at it. Your luxury luggage has same value as a cheap bag from the store around the corner omce sh.. hits the fan.
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Perhaps take a look at Private Equity.

 

[pomegranate]

the world really doesn't sync very well with contrarian viewpoints.

This is so true. And empirically proven. As much as I have strong contrarian views, it is clear historically that momentum-based strategies have delivered far superior returns than contrarian ones.

 

[void]

This is so true. And empirically proven. As much as I have strong contrarian views, it is clear historically that momentum-based strategies have delivered far superior returns than contrarian ones.

examples please

 

[pomegranate]

The Theorem of Market efficiency (“investors can’t outperform the market” that JohnnyDoe keeps referring to) implies that asset prices will follow random walks, with drift and that asset price changes will be white noise, with no autocorrelation.
There are thus only two possible inefficiencies to be exploited when you invest: positive autocorrelation, that’s Momentum, or negative autocorrelation, that’s Value or mean-reversion/contrarian. In this latter case, asset prices need first to go down, or fundamentals need to improve faster than the price.

Empirically, Momentum dominates Value. (Admittedly It is slightly less true in the fixed income world)


iShares MSCI USA Momentum Factor ETF (Blue) vs iShares MSCI USA Value Factor ETF (Yellow)

Since 2013

Last 5 years

 

[annatrs]

I think it's already almost at the bottom, it's time to of into offense

 

[backpacker]

I think it's already almost at the bottom, it's time to of into offense

Where would you go into the offensive?
Emerging Markets, Western World (Europe, USA), biotech, listed PE, bonds???

 

[Spinat]

What are some of the best ways to make money during a recession? Make money off the market by shorting it? (use a etf to short the market as a whole?, wise to use a x2 or x3 short etf?).

Other better options?

Wait for everyone lose their jobs and you know it's time to buy!