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How would one go about shorting this debt?
by swampthinker 8y ago
How would one go about shorting this debt?
- cdiddy2 8y agoShort the companies with the most debt to earnings or some strategy along those lines.
- HillRat 8y agoYou could short publicly-traded PE firms with unfavorable profiles, go after companies with bad current ratios and operational cashflow, or just short the market. Dangerous game, though — remember that the market can stay irrational longer than you can stay solvent.
- fjp 8y ago"Being right early is the same as being wrong"
- aaronblohowiak 8y agoThis debt can also be seen as a bet that there will be inflation.
- ikeboy 8y agoStart a company and issue debt
- incorporate 8y agoActually, this is my favorite answer, because it’s absolutely THE way to profit from terrible economic practices. Borrow money, and never give it back. That IS the correct way to come out a winner when it comes to operating stock ownership. Be the borrower.
- quickthrower2 8y agoOther people’s money, as they say. But can you spend that money as is on for example a Ferrari? Best bet would be to “invest” in something high risk where you either lose it or make so much you can pay off the loan and still be loaded.
- abakker 8y agoFavorite saying: “ when you owe the bank $100,000, you have a problem. When you owe the bank $1,000,000,000, the bank has a problem”
- cheez 8y agoThere are ETFs tracking corporate debt.
- dsp 8y agoBuy credit-default swaps on said debt. The swaps can even be found bundled conveniently in ETFs. Not recommended; good luck.
- technofiend 8y agoFirst, watch The Big Short and decide how you'll manage being on the right end of a winning bet with the incumbents doing everything they can to screw you out of payment.
- rosege 8y agoRead the book - a couple of great scenes that weren't included in the movie.
- quickthrower2 8y agoWorth it for the bathtub scene.
- tryptophan 8y agoBuy puts on $jnk, or try shorting it. Or you could take a look at corporate bond rate swaps. Disclaimer: This is a terrible idea. Don't do it.
- deleted 8y ago[deleted]
- heifetz 8y agoYou can short or buy puts on high yield ETFs, such as HYG and there are probably some others. However, unless you know what you're doing, and have risk management, it's probably not advisable to hold longer duration short positions. The market may ultimately go down, but in the mean time, you'll be losing money and may not profit very much when it ultimately does go down.
- acover 8y agoApparently high yield ETFs invest in junk bonds which are different then leveraged loans. For example, junk bonds are overseen by the SEC.
- gzu 8y agoThe short squeeze in HYG over the past few weeks is insane, up nearly 6%. It had moved +/- 1% all year up until then. You’d have to hold through price moves like that.