A LOW RISK WAY TO SHORT THE EQUITY MARKET

Below is the intro taken from this months edition of our magazine.

So, current consensus wisdom is that the stock market is overvalued but that it has further to go in the near term due to seasonal effects, too much scepticism (a contrarian signal), outstanding short interest, low VIX measure etc etc… in fact, pretty much any real reason you can conjure up to justify the elevated valuations.

Here at Titan however, we wonder whether investors are collectively engaging in “bigger fool theory”. Of course, when investors en masse are blindly buying stocks knowing they are overvalued in the expectation (hope?) that there is another fool around the corner ready to buy at even higher prices, to us, this classic late stage bull market actions and we question who the next “fool” is as retail money has come back into the market with vigour this year…

The script we are seeing today looks remarkably like the end of 1999/early 2000, where fellow fund managers and investors would openly say to me “the market’s crazy, but hell let’s go along with the party”. Of course that ended in carnage just 18 months later as the chart below shows – in fact some equity prices at the higher end of the risk spectrum fell 90-99% – and that included some supposed tech “blue chips” like Cisco.

To read the rest then visit page (36) here – http://issuu.com/spreadbetmagazine/docs/spreadbet_magazine_v23_generic or to learn more about options then click the image below for your free guide