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> “Shorting” a company does not just mean short selling stock. Instead, it means having a short position, which you can use without unlimited downside. If you

by Ntrails 7mo ago

> “Shorting” a company does not just mean short selling stock. Instead, it means having a short position, which you can use without unlimited downside. If you are an equity index holder anyway, simply by not holding any exposure in an otherwise "market" portfolio is a "short" relative to benchmark. ie if I "buy" the SP500 constituents according to weight but with TSLA zero'd out my portfolio is essentially the same as long SP500 and short weigtht*TSLA.

ses1984 7mo ago
Normally you buy into something like SP500 via something like an ETF, something with a very low fee because it’s managed entirely automatically via simple algorithms. How can you invest in SP500 minus TSLA without racking up exorbitant fees? Unless such a fund already exists, you’d be managing it yourself and pretty much wiping out any gains any time you rebalanced.
- Ntrails 7mo ago
  Oh for sure, not an actual proposal for how to invest
- klodolph 7mo ago
  > How can you invest in SP500 minus TSLA without racking up exorbitant fees? Various options… 1. Direct indexing (requires minimum amount of assets), 2. Certain actively-managed ETFs like GGRW, which is not exactly SP500 minus TSLA but it’s not too far off 3. Buying passively-managed ETFs in sectors that don’t include TSLA, 4. TSLQ, maybe. You get fees and other problems. I wouldn’t. Direct indexing costs more than ETFs in terms of fees, but there’s apparently some kind of tax loss harvesting that you can do with direct indexing to offset the fees, and some people say you can come out ahead. I don’t understand how tax loss harvesting works at a satisfactory level (I’ve read articles and watched videos, but I think I would need to take an accounting class and really sit down with a spreadsheet before I could say that I understand how direct indexing and tax loss harvesting work together.)

by Ntrails 7mo ago

ses1984 7mo ago

Normally you buy into something like SP500 via something like an ETF, something with a very low fee because it’s managed entirely automatically via simple algorithms. How can you invest in SP500 minus TSLA without racking up exorbitant fees? Unless such a fund already exists, you’d be managing it yourself and pretty much wiping out any gains any time you rebalanced.

Ntrails 7mo ago
Oh for sure, not an actual proposal for how to invest
klodolph 7mo ago
> How can you invest in SP500 minus TSLA without racking up exorbitant fees? Various options… 1. Direct indexing (requires minimum amount of assets), 2. Certain actively-managed ETFs like GGRW, which is not exactly SP500 minus TSLA but it’s not too far off 3. Buying passively-managed ETFs in sectors that don’t include TSLA, 4. TSLQ, maybe. You get fees and other problems. I wouldn’t. Direct indexing costs more than ETFs in terms of fees, but there’s apparently some kind of tax loss harvesting that you can do with direct indexing to offset the fees, and some people say you can come out ahead. I don’t understand how tax loss harvesting works at a satisfactory level (I’ve read articles and watched videos, but I think I would need to take an accounting class and really sit down with a spreadsheet before I could say that I understand how direct indexing and tax loss harvesting work together.)