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The growing peril is only for long positions. Peril for long positions is profit for short positions. Seeing this article advising "reducing your exposure to t

The growing peril is only for long positions. Peril for long positions is profit for short positions. Seeing this article advising "reducing your exposure to tech by selling your tech stocks" assumes that you have no choice to participate other than buying. They are looking at half of the market(buy-side) and ignoring the equal-sized selling-side of the market. Stocks going down == Short the market. Stocks going up == long the market. The direction is unimportant, the volatility is absolutely important - and there is an awful lot of it(volatility) at the moment.

astrange 9y ago
Are you suggesting an index fund that passively shorts everything? I don’t think that’s in my 401k. (I use Hedgeable which is the most complex robo-advisor, but as they say they hedge long instead of using options. Please sign up, I’d be inconvenienced if they went out of business!)
- module0000 9y ago
  I'm suggesting if the article has any conviction for moving out of tech, then the smart play is not to move out but to short. The language of "reduce exposure" is not what you should hear from your advisor/broker. You don't reduce exposure, you reduce risk by opening short hedges or opening short outright. If these people are tied up long in QQQ(the article references this instrument, which is an amateur hour NQ100 ETF), then risk of tech bust is managed by shorting NQ as a hedge.
rsync 9y ago
"The direction is unimportant, the volatility is absolutely important - and there is an awful lot of it(volatility) at the moment." I am not sure what you mean by this - the asset market in general and the stock market in particular is historically non-volatile right now. Almost all asset classes are in lock-step correlation and fear indexes like the VIX are in such permanent languish that shorting the VIX has been one of the more profitable strategies for trading desks over the last few years.

astrange 9y ago

Are you suggesting an index fund that passively shorts everything? I don’t think that’s in my 401k. (I use Hedgeable which is the most complex robo-advisor, but as they say they hedge long instead of using options. Please sign up, I’d be inconvenienced if they went out of business!)

module0000 9y ago
I'm suggesting if the article has any conviction for moving out of tech, then the smart play is not to move out but to short. The language of "reduce exposure" is not what you should hear from your advisor/broker. You don't reduce exposure, you reduce risk by opening short hedges or opening short outright. If these people are tied up long in QQQ(the article references this instrument, which is an amateur hour NQ100 ETF), then risk of tech bust is managed by shorting NQ as a hedge.

rsync 9y ago

"The direction is unimportant, the volatility is absolutely important - and there is an awful lot of it(volatility) at the moment." I am not sure what you mean by this - the asset market in general and the stock market in particular is historically non-volatile right now. Almost all asset classes are in lock-step correlation and fear indexes like the VIX are in such permanent languish that shorting the VIX has been one of the more profitable strategies for trading desks over the last few years.