"The Big Short"

"Between 10 and 20 investors ... at most"
 -- Michael Lewis on 60 Minutes, estimating how many people saw the financial crisis coming.

This painfully small group of financial crisis winners is the focus of Lewis' new book, The Big Short: Inside the Doomsday Machine. When Michael Lewis visited the Fool offices in the summer of 2009, he mentioned he was working on a book focused on the financial crisis. Back then, I was excited for the book to come out, but I wondered what new spin he could bring to the crisis. 

I shouldn't have doubted my favorite financial raconteur. 

You may know him from books such as ...
If you're unfamiliar with Lewis' work, he's the guy who semi-autobiographically chronicled the surreal world of 1980s Wall Street in Liar's Poker, explained the contrarian sabermetrics-focused success of Oakland A's general manager Billy Beane in Moneyball, and helped Sandra Bullock get her Oscar for the movie version of his book The Blind Side.

Lewis has a knack for illuminating abstraction via masterfully chosen human examples. We saw it in the animalistic Salomon Brothers traders in Liar's Poker, the Greek God of Walks (aka now-famous Kevin Youkilis of the Boston Red Sox) in Moneyball, and the rags-to-riches man-child Michael Oher in The Blind Side

King of the shorts
Expect more brilliance from The Big Short. Instead of giving us yet another rehash of how we all lost a ton of money, Lewis shines a reflective light by highlighting those who made a killing effectively shorting the financial markets.

The memorable character from this book will likely be Michael Burry. I can picture the future movie trailer (from the writer of The Blind Side):

In a world where housing prices could not fall. Where down payments and heartbeats were optional, but interest-only half-caff-mocha-3-year ARMs were mandatory. One man ... ONE MAN ... stood against the subprime tide. Neurosurgeon-turned-hedge-fund-manager Michael Burry, suffering from Asperger's syndrome and equipped with only one functioning eye, dared to take ... The Other Side of the Trade.

That last line, the one describing Michael Burry, is 100% true (Zeke Ashton, in a 2003 Motley Fool article, wrote: "he may be the finest money manager I know"). He saw the problems AIG (NYSE: AIG  ) , Moody's (NYSE: MCO  ) , and Citigroup (NYSE: C  ) did not. Burry didn't invent credit default swaps, but he invented credit default swaps on subprime mortgage bonds. By convincing Goldman Sachs (NYSE: GS  ) and Deutsche Bank (NYSE: DB  ) to make a market for him, he cheaply bet against the housing market and made an absolute fortune. Basically, he is to credit default swaps on mortgage-backed securities what Liar's Poker hero/villain Lewie Ranieri was to mortgage-backed securities.  

Share your shorts
So it is with great excitement that we welcome Lewis to Fool HQ on Thursday. He'll be telling us more tales of the financial crisis and answering our questions. We'll share a summary of his best insights with you later in the week.

For now, help us get in the Michael Lewis spirit by sharing what you would short now. We're thinking more broadly here rather than individual companies.

Maybe you want to go anti-Moneyball and short the Oakland A's. Or the U.S. dollar. Perhaps the prospects of any meaningful health care or financial regulation. Or Ashton Kutcher's career. Maybe your lazy son's future prospects. Anything's fair game. Leave us a comment below with what you would short now, and the top five responses -- as judged by The Motley Fool's editors -- will get a signed copy of The Big Short!

Have at it in the comments section below!

Anand Chokkavelu owns shares of Citigroup. He notes that Tom Gardner is so excited about the Lewis visit that he has been obsessively starching and ironing his jeans. Moody's is a Motley Fool Inside Value and a Motley Fool Stock Advisor recommendation. Motley Fool Options has recommended a write puts position on Moody's. The Fool has a disclosure policy.


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Comments from our Foolish Readers

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  • Report this Comment On March 17, 2010, at 5:06 PM, onthewind wrote:

    I'd short Bidu, even goog distruction in China can not support this run up...What do you think, and perhaps short The Washington Huskies, as Marquette is going to into them to Big East Hoops!

  • Report this Comment On March 17, 2010, at 5:14 PM, elwoodrow wrote:

    I'm shorting Greece and the US Postal Service. Long on Crystal Bowersox.

  • Report this Comment On March 17, 2010, at 5:18 PM, polia wrote:

    Hi there Anand! Be sure to also stream online, Terry Gross's show Fresh Air on NPR...she interviewed Lewis yesterday (3/16)..and it was one of her best interviews ever...he did a brilliant job illuminating the development of the sub-prime debacle...its key players and how it all came to be. Soooooo interesting. You will love it. And a good prep for your interview with Lewis coming up!

    regards,

    Polia

  • Report this Comment On March 17, 2010, at 5:21 PM, unitra wrote:

    Short the National Football League:

    1. Jobless people will not pay these prices.

    2. Economy down makes people worried and will pass on football, now a luxury to some.

    3. Ticket prices are increasing, but will cause a total revenue decrease.

    4. With salary cap going away, some salaries will go sky high, adding much to overhead.

    5. Player unrest over lack of a contract may cause a walk-out, ruining revenue.

    6. Basic operating costs are increasing as well as non-player overhead.

  • Report this Comment On March 17, 2010, at 5:24 PM, Idahosehead wrote:

    Sadly, I would go short on my Social Security benefits. I am 46 years old and would immediately and gleefully settle for merely one-half of what I have already paid in fearing that the SSA's chances of paying me any benefits by the time I reach 67 is virtually nil.

  • Report this Comment On March 17, 2010, at 5:24 PM, jmillerdo1 wrote:

    I think that US Treasuries are ripe for shorting. How long can we keep this level of debt?

  • Report this Comment On March 17, 2010, at 5:25 PM, jesse2159 wrote:

    I would short all of the emerging markets that have billions of very poor people who have zero chance of making it to middle class, enough pollution in their air and water to shorten their lives after costly, yet ineffective medical treatments and an awakening public tired of government policies to control how they should think. I think it's an emerging mirage.

  • Report this Comment On March 17, 2010, at 5:30 PM, SilveraAU wrote:

    Isrg which is a great company but soon their equipment will be more widespread and then it will be hard to maintain the sales inertia and the price will come back to earth around 200. Lately it has had very poor upward price momentum in a rising market.

    While you make money doing that short the Huskies women who are due for an encounter with an Orange train.

  • Report this Comment On March 17, 2010, at 5:34 PM, marginjim wrote:

    If health care passes and I'm pretty sure it will, I would short the prospects of the Republican Party as they try to keep their vow to repeal the thing.

  • Report this Comment On March 17, 2010, at 5:34 PM, DanePymble wrote:

    I'd short the AUD, or any other commodity currency & go long USD. It's a relative strength trade, not a vote of confidence for the USD.

    The AUD has rallied against the AUD along with the market. As the Fed withdraws its liquidity mechanisms March 31 this will help precipitate a 2008esque collapse in equity prices and subsequent rise in the USD. Longer term all fiat currencies are toast. It's just which ones go first that matters.

    http://financialmarketsheretic.blogspot.com/

  • Report this Comment On March 17, 2010, at 5:38 PM, onthewind wrote:

    Short Duke and the UW Huskies, and perhaps BIDU as nothing can support that run up!

  • Report this Comment On March 17, 2010, at 5:51 PM, larchmont1 wrote:

    I'd short an incumbent's chance of being reelected in November. Is anyone making a market in ethics default swaps?

  • Report this Comment On March 17, 2010, at 6:10 PM, sagesfool wrote:

    Short almost anything big and public.

    Short gold, as its bubble is about to burst.

    Short anything non-liquid.

    Short the big box retail chains who have over expanded betting on "emerging urban sprawl".

    Short large trucking companies who are the backbone of our unsustainable logistics system, and who's LTL shrinking margins have dwindled because their decreasing load costs have surpassed the revenue/ton. (What happens when the logistics system breaks down?).

    Short Toyota.

    Short the NYSE, a corporation; and the Federal Reserve, a cartel (Read "Creature From Jekyll Island").

    Short the Supreme Court, the shredded US Constitution and a cancerous "Democracy" that has been outsourced to every foriegn country and corporation who wants to take what is left of the country so many have died for.

    Short Capitalism.

    Short Luck, Generosity, Compassion and Apple Pie.

  • Report this Comment On March 17, 2010, at 6:13 PM, ArizonaLoon wrote:

    Short ISRG.

    Great idea.

    Great run.

    It's a one horse show.

    (or maybe one horse, a pony, and some kind of dog... ;-)

    Loon

    PS - I'd also short social security if I knew how.

  • Report this Comment On March 17, 2010, at 6:18 PM, MAcDScientist wrote:

    I'd short Winter since its' on its' way out but has probably already been discounted. Appreciation for Summer has probably already been factored in so nowhere to go but down - I'd short Summer and buy Calls on Autumn. Anybody want to sell short Winter 2012?

  • Report this Comment On March 17, 2010, at 6:19 PM, richie54 wrote:

    Burry for President

  • Report this Comment On March 17, 2010, at 6:20 PM, LeFevre1 wrote:

    I'm going to short the (inflation-adjusted) $5 cup of coffee (i.e. the $20 cup of coffee in five years). When the proverbial can may no longer be kicked down the road, Mr. Coffee will be back in a big way.

  • Report this Comment On March 17, 2010, at 6:30 PM, NoMoeMoney wrote:

    I'd short humanity, when the market crashes again there will be none...

  • Report this Comment On March 17, 2010, at 6:47 PM, RideHD wrote:

    Short ISRG and BIDU...hhhmm...well, I hope you're prepared to cover those bets. If you are in that mood, short GMCR and F as well. Heck, why not BRK-B, too? You should have a great time fighting overall momentum and trends, unless you are looking for shorting pullbacks/consolidation. Shorting stocks isn't all that great in the big picture IMHO; there are better bearish options that I have made more $$ with. Be careful and best of luck, fools!

  • Report this Comment On March 17, 2010, at 6:48 PM, dmduffy wrote:

    I would short the PGA Tour. Tiger's coming back for the Master's, and the ratings will be huge, but the rest of the season will just be so, so. Tiger will probably only play a select number of tournament in 2010. The master's should be interesting though.

  • Report this Comment On March 17, 2010, at 6:54 PM, beacon6 wrote:

    We thought W was a big spender, but BHO truly made him look like piker in 2009. And the 2010 forecast is equally scary. We are adding as much to our deficit in 1 year as Bush did in 4 or 5. We cannot sustain this level of deficit spending. And we're printing money like it's going out of style. And the looming Obamacare bill hasn't even been figured in. Short the US Dollar. Maybe not this year, but Inflation will hit us like a tsunami.

  • Report this Comment On March 17, 2010, at 7:03 PM, bzw51 wrote:

    Short TMF, since it is trying to sell me one news letter after another. Who has money to invest when you have to buy all the advise.

  • Report this Comment On March 17, 2010, at 7:10 PM, TMFEditorsDesk wrote:

    Hi polia,

    Just checked it out...a quick, interesting listen. Learned a little about the movie business, too. Here's the link for the rest of you:

    http://www.npr.org/templates/story/story.php?storyId=13

    -Anand (TMFBomb)

  • Report this Comment On March 17, 2010, at 7:18 PM, jonpunski wrote:

    I would short your new book.

    No one will want to read about the 'geniuses' that made a fortune, while the working man lost his shirt.

  • Report this Comment On March 17, 2010, at 7:30 PM, Pr0metheus wrote:

    I'd short batteries: http://www.infinitepowersolutions.com/product

    And the AP Poll.

  • Report this Comment On March 17, 2010, at 7:34 PM, TMFRhino wrote:

    onthewind,

    If you're looking for a place to short the Huskies, I'll take the opposing side of your trade :).

    Also, Duke... C'mon, they've got the easiest bracket for a #1 seed ever conceived!

    Best,

    Eric

  • Report this Comment On March 17, 2010, at 7:52 PM, peters46 wrote:

    I would have to short health care insurance customers. If any 'reform' is passed the only meaningful part to pass will be malpractice-suit caps/limits and forcing pre-existing condition coverage. Those would be large revenue decrease from malpractice and large increase in costs for pre-existing condition coverage. Less revenue and higher costs equals much, much higher insurance premiums. Might as well short the democrats after that 'reform' has been in play for eighteen months.

  • Report this Comment On March 17, 2010, at 8:18 PM, jm7700229 wrote:

    I was one of the "10 to 20" investors who saw the financial crisis coming and got out of the industry. Would that I had realized how badly it would hit the rest of the economy...

  • Report this Comment On March 17, 2010, at 8:19 PM, jm7700229 wrote:

    ...but for now, short gold.

  • Report this Comment On March 17, 2010, at 8:19 PM, dontwin wrote:

    I would short Nancy Palosi big time!

  • Report this Comment On March 17, 2010, at 8:49 PM, OPTIONNUT wrote:

    I would like to short our Congress...half of them should be on the way out! I will not go long until they practice/partake in what they vote for the rest of us!

  • Report this Comment On March 17, 2010, at 8:50 PM, mtodd1 wrote:

    I would short the television time the actual winner will receive throughout the 2010 Masters compared to Tiger Woods'.

  • Report this Comment On March 17, 2010, at 9:05 PM, jerryguru69 wrote:

    The Euro. The exchange level of a country's currency is subject to a number of disparate factors, domestically and internationally. Do you really think that all those European countries are going to keep holding hands and sing Kumbaya forever?

    And: if I am correct, do I get another one of those hammer-thingies?

  • Report this Comment On March 17, 2010, at 9:11 PM, poppawheeler wrote:

    Short me I'm outa here

  • Report this Comment On March 17, 2010, at 9:22 PM, falang1 wrote:

    Short Facebook. It just rose to the top of the pile over google, which means most likely people will get greedy, try to milk money from it, then it will slowly die.

  • Report this Comment On March 17, 2010, at 9:24 PM, MKArch wrote:

    China! Besides the widely reported real estate bubble I don't buy people averaging $3.5K/ year raised in a culture of thrift are going to replace the mass migration of jobs from developed countries to low cost developing countries this past decade that's largely played itself out by now. Unprecedented stimulus and fudging the GDP numbers can hide the problem for a while but my spidey sense tells me China is a bubble waiting to be popped. Just shorted CZM in my CAPS portfolio. Long the U.S. where expectations are low.

  • Report this Comment On March 17, 2010, at 9:28 PM, Fool4ZTribe wrote:

    Short the Kentucky Wildcats in the NCAA men's hoops tourney - just like many hedge fund managers who lacked experience in trying times, none of these Cats have been to the big dance!

  • Report this Comment On March 17, 2010, at 9:29 PM, snapperreef wrote:

    Like some others have said, I'd almost short anything government. TBills, T bonds, dollar. The unfunded spending will first cause us to lose AAA rating for US govt paper then the big sell off by lenders begins.

    I'd then short any Democrat member of Congress and a lot of Repubs.

  • Report this Comment On March 17, 2010, at 9:40 PM, freddy112 wrote:

    I would short Obama's second term. The way he is going he has no chance!

  • Report this Comment On March 17, 2010, at 10:04 PM, Alexinthebox55 wrote:

    I would short Gold!

  • Report this Comment On March 17, 2010, at 10:37 PM, bluffguy wrote:

    Sara Palin, her 15 minutes is long gone.

  • Report this Comment On March 17, 2010, at 11:15 PM, sgcole wrote:

    Crude. Light Sweet. Over the next 8 months. OPEC is a bunch of lying knuckleheads over-producing like no tomorrow. And there's new production coming on.

  • Report this Comment On March 17, 2010, at 11:25 PM, George3919 wrote:

    I think we have already shorted future generations. we have messed with mother nature and she won't be able to fight back.

  • Report this Comment On March 17, 2010, at 11:36 PM, SRV339 wrote:

    Principal Centered Leadership!

  • Report this Comment On March 17, 2010, at 11:42 PM, techfule wrote:

    I would short the military/industrial complex. God bless our young men and women in arms, but we can't afford to run a global empire anymore. We can defend the US forever but we can't fight everyone else's wars much longer, we have too many other bills coming due.

    And in response to an earlier comment, I would NOT short Lewis' book or Burry, either. I'm not learning about investing to stay a "working man". Short working, long investing.

  • Report this Comment On March 17, 2010, at 11:59 PM, solarfool314 wrote:

    I would short the corporation that laid me and most of my coworkers off but it's not publicly traded.

    I agree we have shorted future generations but mother not only can fight back, she gets in the last punch.

  • Report this Comment On March 18, 2010, at 12:18 AM, MADMAXROI wrote:

    (B) - Be very very wary of continued Federal Deficits.

    (I) - If the Feds remove the stimulus too early, watch

    out.

    (G) - Gold only maintains purchase value and nothing

    else.

    (S) - Short everything you think is going to go down.

    (H) - Hold onto your gains.

    (O) - Order the book.

    (R) - Read the book.

    (T) - Those that broke the law during this last downturn should be in jail.

  • Report this Comment On March 18, 2010, at 12:20 AM, Kilstofte wrote:

    Short the English language in the hands of Wall Street, where "insurance" becomes a "Credit Default Swap". Give something a different name to avoid regulation. Watch for bonuses to be called "enhanced attendance recognition."

  • Report this Comment On March 18, 2010, at 12:24 AM, ChicagoMary wrote:

    Short common sense.

    Short shared vision.

    Short the Age of Aquarius

    Short Big Sister's Keeper

    Short a sense of community

    Short both satire and comedy

  • Report this Comment On March 18, 2010, at 1:23 AM, dschleicher wrote:

    I'm shorting groups that are on their way out like factory farms and hunters of endangered species like bluefin tuna fishermen!

    Long Live Organic and Sustainable Farmers!

  • Report this Comment On March 18, 2010, at 1:38 AM, kenrexb wrote:

    short TMF...the bloodsuckers!

  • Report this Comment On March 18, 2010, at 1:57 AM, repldorsey wrote:

    I shorting all Democrats and Republicans currently in office. They are obviously not there for us. Non of them seems to be interested in doing their job only fighting each other. They can't get any thing done. We do need tort reform and Better lower cost healthcare. We do need Senators and Representatives who actually represent us the people. The special interest did not elect them. They may have paid for their election. I would also short lobbyists. We need to get special interest out of politics.

  • Report this Comment On March 18, 2010, at 2:08 AM, FleaBagger wrote:

    Short Treasuries, especially, but not only, U.S. ones.

  • Report this Comment On March 18, 2010, at 2:11 AM, FleaBagger wrote:

    If we're voting, I'd like to vote for SLTFATF's.

  • Report this Comment On March 18, 2010, at 3:57 AM, AirForceFool wrote:

    Overstock.com (OSTK)

    We'll start out with management that can simply be classified as certifiable.

    In the news today (17 Mar 2010).... OSTK filed a Notification of Late Filing for its 2009 annual report... "37 minutes before the drop-dead deadline" . Seriously... they didn't know yesterday or last week that they weren't going to have it ready? And I often expect this level of incompetence from a brand new company that only has a couple of quarters under their belts... but not eight years... sheesh... and why are they needing more time... GAAP violations... old ones... some new ones... old auditor fired... new auditor fired... you can't really make this stuff up... Do you think this would be a good time for the CFO to bail? I know if I was the CFO, I'd be doing the same thing... yeah, I can really see them finally getting the math straight now (dripping sarcasm)... so what has the stock done in the last eight years you ask? Well, it's certainly gone all over the place... but if you'd bought shares at the beginning, you'd be up about 11% in a little under 8 years... yeah... not that there weren't some folks riding the highs and lows making money... on the contrary... just that if you believed in the stock and had a LTBH strategy, you'd have had your hat and more handed to you...

    So what else is there to dig up? We could always talk about Patrick Byrne's obsession with the "shorts" that are out to get him, but that's an old song and dance we've heard for years... most of the entertainment value has been beaten out of the topic...

    So let's look at some of the numbers...currently 3M shares sold short (out of around 23M)... negative book value... not something you see every day...beta of 2.34, so expect a bumby ride... never paid out a dividend because they've just never been very good at making more money then they've spent...negative P/E... that will happen if you have negative earnings for some reason... and trust me...I'm O.K. if a company is building their business, and doesn't have much in the way of earnings... because there's a trade-off for what the expected growth will eventually bring in... not so in the case of OSTK... I haven't been to their site in a while... maybe things are better... Front page has Dyson vacuums... decent brand... (Dyson DC25 Ball All-Floors Upright Vacuum Cleaner going for $549... Amazon has the exact same one for $445....sheesh....) I'm sure there's probably something cheaper on Overstock, but I'm not willing to pu that much effort into it... let's look at the bottom of the page, and see what's hot in my area... Mombasa White Adult Mosquito Net Canopy... how do you make this up? There aren't a lot of mosquitos in New Mexico, but let's read the discreption to get a better idea of the product and I quote "Add airy elegance to the bedroom with this Mosquito Net Canopy, Romantic and functional mosquito netting, erfect canopies for a summer evening"...

    Gentlemen... I'm not generally know for my ability to predict the future, but you bring this home to the girlfriend or wife, and you are a dead man walkng... how can anyone on the planet say the words "romantic" and "mosquito netting" in the same sentence and think it's a good idea?

    Dare we look at the competition? You could just say the word Amazon, and that would be enough for me not to buy the stock... they either have to go with a better product line, or go a lot cheaper... if you can't do one of those (and I'd aruge you need to execute with a kickin' web site our you'll lose people) you have a chance at best... with lots of competitors and no moat only the smart will survive... well, let's stroll over to CAPS and see what folks are saying... ouch... it's earned the not-so-coveted one star... not really surprised... 384 All-Stars currently rating, and 323 of them are thumbs down... nice...

    Well, I'm sure I could ramble on for days, but I won't... with options that only go out to September it could be argued that the market can stay irrational longer then one can stay solvent... by my vote is still to short OSTK.

    Chris

  • Report this Comment On March 18, 2010, at 3:59 AM, AirForceFool wrote:

    Overstock.com (OSTK)

    We'll start out with management that can simply be classified as certifiable.

    In the news today (17 Mar 2010).... OSTK filed a Notification of Late Filing for its 2009 annual report... "37 minutes before the drop-dead deadline" . Seriously... they didn't know yesterday or last week that they weren't going to have it ready? And I often expect this level of incompetence from a brand new company that only has a couple of quarters under their belts... but not eight years... sheesh... and why are they needing more time... GAAP violations... old ones... some new ones... old auditor fired... new auditor fired... you can't really make this stuff up... Do you think this would be a good time for the CFO to bail? I know if I was the CFO, I'd be doing the same thing... yeah, I can really see them finally getting the math straight now (dripping sarcasm)... so what has the stock done in the last eight years you ask? Well, it's certainly gone all over the place... but if you'd bought shares at the beginning, you'd be up about 11% in a little under 8 years... yeah... not that there weren't some folks riding the highs and lows making money... on the contrary... just that if you believed in the stock and had a LTBH strategy, you'd have had your hat and more handed to you...

    So what else is there to dig up? We could always talk about Patrick Byrne's obsession with the "shorts" that are out to get him, but that's an old song and dance we've heard for years... most of the entertainment value has been beaten out of the topic...

    So let's look at some of the numbers...currently 3M shares sold short (out of around 23M)... negative book value... not something you see every day...beta of 2.34, so expect a bumby ride... never paid out a dividend because they've just never been very good at making more money then they've spent...negative P/E... that will happen if you have negative earnings for some reason... and trust me...I'm O.K. if a company is building their business, and doesn't have much in the way of earnings... because there's a trade-off for what the expected growth will eventually bring in... not so in the case of OSTK... I haven't been to their site in a while... maybe things are better... Front page has Dyson vacuums... decent brand... (Dyson DC25 Ball All-Floors Upright Vacuum Cleaner going for $549... Amazon has the exact same one for $445....sheesh....) I'm sure there's probably something cheaper on Overstock, but I'm not willing to pu that much effort into it... let's look at the bottom of the page, and see what's hot in my area... Mombasa White Adult Mosquito Net Canopy... how do you make this up? There aren't a lot of mosquitos in New Mexico, but let's read the discreption to get a better idea of the product and I quote "Add airy elegance to the bedroom with this Mosquito Net Canopy, Romantic and functional mosquito netting, erfect canopies for a summer evening"...

    Gentlemen... I'm not generally know for my ability to predict the future, but you bring this home to the girlfriend or wife, and you are a dead man walkng... how can anyone on the planet say the words "romantic" and "mosquito netting" in the same sentence and think it's a good idea?

    Dare we look at the competition? You could just say the word Amazon, and that would be enough for me not to buy the stock... they either have to go with a better product line, or go a lot cheaper... if you can't do one of those (and I'd aruge you need to execute with a kickin' web site our you'll lose people) you have a chance at best... with lots of competitors and no moat only the smart will survive... well, let's stroll over to CAPS and see what folks are saying... ouch... it's earned the not-so-coveted one star... not really surprised... 384 All-Stars currently rating, and 323 of them are thumbs down... nice...

    Well, I'm sure I could ramble on for days, but I won't... with options that only go out to September it could be argued that the market can stay irrational longer then one can stay solvent... by my vote is still to short OSTK.

    Chris

  • Report this Comment On March 18, 2010, at 4:03 AM, AirForceFool wrote:

    Sigh... if yorue giong to hvae tpynig erors, at lesat atpmt to olny psot it ocne.

    Aplogteclily,

    Crhis

  • Report this Comment On March 18, 2010, at 4:51 AM, RaptorD2 wrote:

    Hi Anand,

    I saw Michael Lewis last night on Charlie Rose and his stories are fascinating. The one common theme from all of the people who truly saw this coming way before the rest of us is the fact that for various reasons, they had each tuned out the media 100% while digging deep into the subprime storm. One of the gentlemen even had Asperger's Syndrome (autism: http://en.wikipedia.org/wiki/Asperger_syndrome.) The lessons they learned were all sourced internally without listening to the noise in the airwaves and blogs.

    Besides fascinating me this little detail served to support my theory that we are better off not listening to the "experts" at all. I used listen to CNBC and/or Bloomberg all the time while investing. I even ordered my latest pc with a tv tuner so I could do just that. I quit several months ago and haven't sold a single stock since which is unusual for this short-term trader.

    Oh! My obligatory short? It's simple: I would short the average Congress Critter's chance of reelection next term. I hope they all get voted out for the sake and future of my country.

  • Report this Comment On March 18, 2010, at 5:10 AM, valari25 wrote:

    Give credit where it is due please, AirForceFool.

    http://seekingalpha.com/article/194095-overstock-com-reports...

  • Report this Comment On March 18, 2010, at 5:10 AM, valari25 wrote:

    Give credit where it is due please, AirForceFool.

    http://seekingalpha.com/article/194095-overstock-com-reports...

  • Report this Comment On March 18, 2010, at 5:15 AM, valari25 wrote:

    Oh yeah, and I would short Pfizer. They didn't integrate Warner-Lamber well, they really didn't do much with the Pharmacia merger and they overpaid by a large sum for Wyeth.

    They Wyeth purchase is going to be their undoing. There is nothing in phase 3 trials at either company that can even dent the earnings cliff of Lipitor going off patent and that is going to either stall the dividend or force a cut. If they cut it again, expect a sub $10 PFE. I think it will happen, they've been terrible at every turn and that dividend is the only thing keeping them where they are now.

  • Report this Comment On March 18, 2010, at 7:26 AM, sergioh12 wrote:

    Short any incumbant congressmen who vote for the current version of the Obamacare bill; it is not what we want (over 70% of the American people don't want this version of the bill) ... too expensive, deferred benefits, and it will surely raise taxes, ensure higher insurance premiums, and will lead to rationed health care (less doctors to service more people) ... most Canadian residents can share their healthcare horror stories with you!!

    Oh, also, short DryShips, Inc. (DRYS) ... BIG DEBT, incompetent management, some cash on the books from Financing and Stock sales, but with the world economy remaining slow for the rest of the year ...

    Go ahead, gamble if you'd like!! ;-)

  • Report this Comment On March 18, 2010, at 7:57 AM, Superdrol wrote:

    Pfizer has not performed well over the past decade. They overpaid for Wyeth and losing Lipitor will be the next domino for them.

  • Report this Comment On March 18, 2010, at 8:15 AM, MMF08 wrote:

    Domino's Pizza (DPZ)

    I would short Domino's right now for a few reasons. First from a technical standpoint Domino's Pizza share price has almost doubled in about 2-3 months. Going from around 7.80 to 14.19 in such a short time period, one has to start to ask how and why? Domino's sales and all fundamentals have looked better but they did not shatter analysts expectations. They were nothing that would usually back such a short term run.

    That brings me to the next point. Domino's started this nice bullish run just days after the commercials for their new and improved pizza were released. This helped drive the run and get the share price to its current highs. But if you've tried the new pizza it is not much different. Sure they added a garlic sauce to the crust and the sauce is a little bit better, but it still tastes like Domino's. If a new and improved product is what gave customers faith to drive the stock to new highs in the short term, in the long term the stock will have to undergo some sort of correction as people come to try the new pizza. Long term sales will fall back a little and Domino's will lose some of that initial product entry interest.

    Therefore, over the coming weeks or few months I would not be surprised to see domino's drop to around 10 or 11 dollars before gaining new momentum and maybe even breaking out to new highs. It needs some sort of correction off of this somewhat falsely backed rally.

  • Report this Comment On March 18, 2010, at 8:25 AM, oohaeagle wrote:

    Short Zhu Zhu Hamsters.

    Short Sugar Commodities and Sugar processors. All this hype over "overweight kids", Pepsi and Coke pulling all sugar drinks from schools, etc.. etc...

    Short American Idol... Yawn!

  • Report this Comment On March 18, 2010, at 8:34 AM, TColie wrote:

    Short: Global Trade

    Long: Protectionism

  • Report this Comment On March 18, 2010, at 8:52 AM, margilouq wrote:

    I would short Microsoft. Everyone complains about Windows, Vista, its monopoly, its predatory selling tactics.

  • Report this Comment On March 18, 2010, at 9:28 AM, jfitnich1 wrote:

    I'd short optimism. It's going to be in short supply in a couple months. No optimism futures market though!

  • Report this Comment On March 18, 2010, at 9:41 AM, SgtYahoo wrote:

    There's always someone shorting the market, and always for good reason. There were people shorting the market continuously throughout the 90s, and people shorting more recently throughout the early years of this decade. Those individuals were bright, knowledgeable, and had compelling arguments as well.

    That there is a group that was right this time around just shows that their particular thesis proved more timely than any of the others.

    You can't really quantify or reproduce those results as they depend entirely on timing. What can I learn from them that doesn't have me continually reacting bearishly because, ultimately, the world is always on the verge of some crisis or another.

  • Report this Comment On March 18, 2010, at 9:44 AM, 8Lives wrote:

    Maybe shorting a stock is unethical ... There's got to be a more productive way to contribute.

  • Report this Comment On March 18, 2010, at 9:47 AM, Smittyh wrote:

    The Fed is wearing out the printing presses to print money they are spending that they do not have. Can there possibly be a better short than the US dollar considering that inflation is about to go astronomical? Can world inflation possibly out run US inflation, and if it does, where is an inflation safe place for money? Gold? Silver? Food?

  • Report this Comment On March 18, 2010, at 10:06 AM, bigcat1969 wrote:

    Italy, Greece, Ireland and the rest of the debt ridden EU nations as Germany refuses to bail them all out and they have to default and/or leave the Euro behind. LA as the city 'leaders' watch a fall into bankruptcy while enjoying those 7 figure salaries. Governments cannot adjust fast enough to save themselves and once they start going defaulting, bond prices will soar causing more to go belly up or start printing.

    Read up on Ireland, they basically bought all bad debt from the banks that caused the real estate bubble in that country and transferred that debt to the taxpayers with no way for the government to pay it off.

  • Report this Comment On March 18, 2010, at 10:20 AM, vbbv wrote:

    Believe it or not, but I would short Apple! This stock is WAY overvalued with a P/E ratio of over 21. AAPL has been a great stock for the past 5-10 years, but going forward I just don't see it. I have bought the IPad and I don't think it will be a game-changer like the Iphone or the Ipod and consequently APPL's future earnings are going to disappoint which will place significant downward pressure on its stock price...

  • Report this Comment On March 18, 2010, at 10:23 AM, vbbv wrote:

    I would short AAPL. This is one overvalued stock with a P/E of 21. I bought the Ipad and I don't think it will be a game-changer like the IPhone or the Ipod. Consequently, sales are going to be disappointing placing significant downward pressure on the stock price.

  • Report this Comment On March 18, 2010, at 10:25 AM, DJSwim wrote:

    First of all, I would short Blockbuster even though I'm clearly late to that party.

    Second, shorting a stock isn't unethical, but even if it were we have much more pressing ethical matters to attend to first, like commercials that tell me I can get "any" sub for $5 when in fact I can not. There is a special level of Hades for those marketing people. And I'm looking at you too, freecreditreport.com.

  • Report this Comment On March 18, 2010, at 10:29 AM, jfenlon wrote:

    Short the big accounting firms who have colluded with the corporations to invent terms to describe anything they want to in their financial reports.

    Techfule is right. Twenty-one years in the Army let me see some of the inner workings of the military-industrial system Eisenhower warned against. The Russians aren't coming; haven't been since Kennedy scared the Cenral Committee by calling Khruschev's bluff. Trent Lott's forcing the Navy to buy an aircraft carrier they didn't need- that stuff is coming to an end. Gates understands the system and is going to force the Defense department to buy based upon the real threat, which is not tank divisions rolling around europe. Thre is not going to be a succesor to the B-2.

    When it dawns on Congress that the economy is really in trouble military spending is the first thing they are going to cut. The Democrats aren't going away. The happy dopes who voted for an empty rhetoritician will continue to pull the lever for the party of promises because they have nowhere else to go.

  • Report this Comment On March 18, 2010, at 10:33 AM, sagesfool wrote:

    I agree: short Microsoft. Every aspect of the Microsoft Windows was pirated from some other company and repackaged as a patented feature (Apple, Sun, Unix, etc.). They've run their course.

    Long on Linux software. They have their act together. I have two years of Fedora (www.fedora.com) operating system experience with NO CRASHES, NO POPUPS, NO VIRUSES, NO BLUE SCREENS OF DEATH, NO ANNUAL OR PURCHASE or UPGRADE FEES. Oh yes, I can also run any Microsoft program executable (including office) within the Linux environment -- no problems, at no cost!

    The same ground-swell, grass-roots passion that took Linux to its high standards of open source excellence from a mere idea, needs to be employed to rework our lop-sided and defunct "government" of the corporations, by the corporations, for the corporations and DO WHATEVER IT TAKES to take back the government of the people, by the people and for the people.

    We need a ground swell of people with the stones to boycott any corporation which outsources our jobs to another country. Bring our jobs and our troops home!

    Then short everything foreign!

  • Report this Comment On March 18, 2010, at 10:56 AM, MAcDScientist wrote:

    Short Michael Bloomberg - Oh - Wait - Nevermind

  • Report this Comment On March 18, 2010, at 10:58 AM, jeffmtank wrote:

    I'd short the St. Louis Rams....no wins in sight for 2010!

  • Report this Comment On March 18, 2010, at 11:08 AM, MyDonkey wrote:

    short shorts

  • Report this Comment On March 18, 2010, at 11:11 AM, IdahoAve wrote:

    Short: Palm, Sirius Radio, and the 40 hour work week.

  • Report this Comment On March 18, 2010, at 11:16 AM, SCJDeke wrote:

    As a loyal Twins fan, I "shorted" Moneyball immediately after reading it! Now we see that the vast majority of those "fat guys who walk alot" were just cheating steroid boppers (Big Papi, Giambi, etc.).

    These same OPS buffoons usually can't play a lick of defense and contribute to runs being scored against their teams while in the field. (They are also incapable of bunting, stealing, and aggressive base running when those skills are required to defeat dominating pitchers.)

    p.s. The Blind Side? yuck/schmatlz

  • Report this Comment On March 18, 2010, at 11:16 AM, Retiree2035 wrote:

    I'd short government jobs. Not the politicians....the police, firemen, teachers. I think they'll be lots of job losses in the public sector and would like to bet on that with real money.

    The American people would be a nice short as well. They are way overvalued in a global economy.

  • Report this Comment On March 18, 2010, at 11:36 AM, AnthemFool wrote:

    I think shorting China is the right way to go. No economy grows straight up, plus their system is brittle because of all the government controls. It is ironic that many of the people yelling about increased US government involvement in our economy are also the ones who are expecting China to surpass us. Their real estate bubble and industrial capacity excess may make our bubbles look like mere blips.

    I am a patriotic optimist on the USA because an open, innovative and multicultural society like ours has much greater strength and resiliency. We just need to get back to the basics of hard work, entrepreneurial wealth creation, and innovation and away from the addiction to spending what we don't have.

  • Report this Comment On March 18, 2010, at 11:52 AM, DJDynamicNC wrote:

    Short the NYS Legislature. Before they short us. Again.

    Short the Tea Baggers. I mean, who's long on tea bagging?

    Short my fiancee. At 4'10", all the work of shorting is already done.

    Short me. Once my fiancee reads this, I won't be worth much.

    Short Angelina Jolie. The only muppet I don't like.

    Short the anti-vaxers. Or just wait and let evolution take care of them.

    Short the teletubbies. Here I use short in its lesser-known meaning of "run through a meatgrinder."

  • Report this Comment On March 18, 2010, at 12:08 PM, sickafus wrote:

    I'd Short any Senator or Congressman who votes for health care.

    The Senator Song (Demo)

    http://www.sickafus.com/patgarrett/senatorsong.mp3

    click to hear or paste in you address box to hear.

    hear more at www.patgarrett.com

  • Report this Comment On March 18, 2010, at 12:26 PM, eggwis wrote:

    Short Gold ~ It's got to be peaking. Short BIDU ~ Google will not walk away from the #1 emerging internet market in the world very easily. Short re-election for democrats! What are they thinking?!?!

  • Report this Comment On March 18, 2010, at 12:54 PM, tumblhome wrote:

    Short American manufacturing, that which made America great will be no more.

  • Report this Comment On March 18, 2010, at 1:13 PM, JasondinAlt1 wrote:

    Pair trade - Short AAPL and long MSFT. Or, no brainer - short Cali muni bonds.

  • Report this Comment On March 18, 2010, at 1:13 PM, dcgatlanta wrote:

    Short Interoil (IOC). A $3B market cap, and despite years of drilling, still no proven reserves of oil or gas. And if they do find gas, there’s no existing infrastructure to get it out from the remote Papua New Guinea fields being drilled. They regularly raise capital through dilutive equity raises. I predict this company will be out of business in another 5 years.

  • Report this Comment On March 18, 2010, at 1:35 PM, AirForceFool wrote:

    valari25:

    Absolutely... it was late and my brain was fried, but that's no excuse... I also used some of the data from the old RB Sold OSTK board... kudos to tomheadrick and BreakerCarl... thanks for keeping me honest...

    Chris

  • Report this Comment On March 18, 2010, at 1:36 PM, asuram54 wrote:

    Short NASA. This is the one agency that could have used stimulus money to spur growth and innovation with well-paying jobs, but instead gets a budget cut.

  • Report this Comment On March 18, 2010, at 1:39 PM, MorseFool wrote:

    Short the Euro.

  • Report this Comment On March 18, 2010, at 1:43 PM, TMFSpiffyPop wrote:

    With so many interesting shorting ideas above, I encourage those who are suggesting specific stocks to go to http://caps.fool.com and find the stock you're looking for and give it a big fat red thumb on CAPS. Add to our community intelligence -- step up, be accountable, look like a genius when you're right a year later.

    The point of CAPS is that you don't have to just talk short -- you can take public action, accountability, and (if you're so inclined) compete against others to demonstrate just how right you are.... Fool on! --David

  • Report this Comment On March 18, 2010, at 2:01 PM, mountain8 wrote:

    jesse2159 :

    Why do you limit your short to emerging markets. Your description fits the US to a tee (pun for Tiger, on whom I am going long).

    I'd short congress in whom I root for a complete turnover.

    VOTE NO TO INCUMBANTS.

  • Report this Comment On March 18, 2010, at 2:07 PM, 5imple5 wrote:

    I'd short the Alt-A and Option ARMs that will reset over the next two years

  • Report this Comment On March 18, 2010, at 2:41 PM, xPhr0z3n wrote:

    Google and Gold.

  • Report this Comment On March 18, 2010, at 3:06 PM, TMFUltraLong wrote:

    The most worthwhile short out there are media and advertising companies. This sector is the first to feel the effects of any economic swoon and are the last to respond to any economic benefits of a recovery. The majority of the companies in the media/advertising sector have negative book valuation, are seriously indebted and have running rates of double digit revenue declines. Most of these companies have had to shed jobs and cut expenses by up to one-third simply to stay afloat. Media and advertising is not the place to be right now and that's where I would focus my short sell attention.

    UltraLong

  • Report this Comment On March 18, 2010, at 3:24 PM, DJDynamicNC wrote:

    Heh, I'm all for shorting congress until they share the same healthcare reform we do, as was suggested above.

    I'd LOVE fully socialized health care like they enjoy. :D

  • Report this Comment On March 18, 2010, at 3:56 PM, XMFShirKi wrote:

    Short the euro, <gasp>

  • Report this Comment On March 18, 2010, at 4:26 PM, mikecart1 wrote:

    Shorting The United States of America.

    Also in no order but must be mentioned because they all suck tremendously and are highly overrated: Google, UNG, BBI, Gold, AAPL, USPS, Wendy's, SBUX, all ETF's from 1x to 3x and everything in between, most retail establishments (everyone buys online), and so many more.

    Long on FedEx, UPS, and all other mailing services other than USPS that deliver goods for much less directly to consumer homes with relatively cheap shipping. Long on Oil. Long on China as it will soon rule the world like the dynasties of thousands of years ago.

    GOoooooooooooooo CHINA!!!!

  • Report this Comment On March 18, 2010, at 4:51 PM, TMFBreakerTAllan wrote:

    I would short Cable Companies. In the quest for diverse programming, they have fragmented the TV audience; people don't talk about what was on TV last night - because so few people watch the same things. Because of that, Cable TV will be supplanted by the internet and consumers relinquishing the need for immediacy - they will find what they want to watch from other sources and adopt pay (if they have to) as you go on demand programming.

    T. Allan

  • Report this Comment On March 18, 2010, at 6:18 PM, WyattJunker wrote:

    I'd short the Telcos. I'd also short Borders Group. Not sure about cigs. Maybe, but then again maybe not.

  • Report this Comment On March 18, 2010, at 10:22 PM, markitall wrote:

    I'd short the euros sinece germanyy try to disintigrate the euro zone. I'd also short oil, base metals. With the trade war brewing and the building up of reserve in China for these commodities, it will be sooner than later to derail the global recovery and trade.

  • Report this Comment On March 19, 2010, at 12:14 AM, petersig wrote:

    From the many ways it's popped up in the last week of my life, I'd go long on the quantum mechanics view of the universe. The alternative that suggests itself is going short on Einsteinian space-time as a "universe-view." That is, among those in the know, space-time is on its way out.

  • Report this Comment On March 19, 2010, at 10:32 AM, georcole wrote:

    I would short the chance that my relationship with my girlfriend will last much longer.

    Disclosure, I am in the relationship and have ultimate say in whether the relationship will succeed or fail and I'm not happy. I guess that is insider information and I might be charged as such and go to jail like Martha Stewart did.

    I would also short my chances of getting to date Sandra Bullock. For some reason, I really believe that she doesn't know that I exist. I'm still holding out hope that she will knock on my door, I just don't think it's going to happen.

  • Report this Comment On March 19, 2010, at 11:14 AM, mayach wrote:

    I would like to short the big financial companies where the stock prices are overvalued, this institutions have the caliber to create another crisis. Which has to be avoided. Can wait for your article

    -- http://www.mysticstocks.com

  • Report this Comment On March 19, 2010, at 11:37 AM, JimHasFool wrote:

    I'd short Barack Obama's approval ratings. Actually, I should have done that the day after he was sworn into office.

  • Report this Comment On March 19, 2010, at 1:46 PM, reeshau wrote:

    I am short air quality in Beijing.

    To my dismay, I am short polar bears.

    With average elevations of 5 ft and 15 feet above sea level, respectively, I am short real estate in the Maldives and Tuvalu.

  • Report this Comment On March 19, 2010, at 4:57 PM, DJDynamicNC wrote:

    @Petersig - got any links for some reading on that? I'm very intrigued!

  • Report this Comment On March 20, 2010, at 12:25 PM, TMFBomb wrote:

    @georcole,

    That made me laugh. Maybe Sandra googled herself and is reading this...

    -Anand, who is short Sandra Bullock reading anything he has written.

  • Report this Comment On March 20, 2010, at 3:11 PM, MichelleYan wrote:

    short commercial real estate & and banks that hold them for the next 3 years-- over 1 trillion loans are ballooning

    short chinese industrials-- just read about the empty city of ordos

    short the euro-- greece can't put on austerity measures like ireland because they have 10/20 year contracts with public workers and PIGS will follow greece

  • Report this Comment On March 20, 2010, at 3:59 PM, ET69 wrote:

    I'd short the ability of humanity to keep growing its population at its current rate and survive with out a massive die off .

    I'd also short capitalism's ability to prevent this catastrophe.

  • Report this Comment On March 21, 2010, at 12:51 AM, edwardthefool wrote:

    Go long on having children. Short condoms. Our only hope is to ---- our way out of this. Make love - get a tax exemption. Get a discount on stork delivery when health care passes.

  • Report this Comment On March 21, 2010, at 3:24 PM, janis1023 wrote:

    First, let me be counted as one who strongly feels all incumbants in Congress must go. That is the only way to stop business as usual, which is NOT business for the people.

    Netscape, ridiculously overpriced for what it is. With so many other options to watch movies and play games, their future is not promising.

  • Report this Comment On March 21, 2010, at 10:28 PM, BorisBzG wrote:

    Short Obama even making it to the next election. My stakes are on an Impeachment before then

  • Report this Comment On March 22, 2010, at 11:32 AM, offroadhero wrote:

    I would short my wife but I'm too deep underwater

  • Report this Comment On March 22, 2010, at 4:40 PM, Fleet731 wrote:

    Short hospital stocks when the Medicare or Medicaid reimbursements get cut with the newly passed health care bill. Hospitals are barely surviving with those reimbursements now, after they are cut they could start going under.

  • Report this Comment On March 22, 2010, at 9:45 PM, argu77 wrote:

    I would short the US deficit against my beloved country: Mexico. The monopolistic, cartel owned, oil spilling junkie can´t raise enough taxes from its frito-lay and coke abusive population and can only stay afloat thanks to its ever growing market of illegal emigration. At least we rule a market, some of our politicians argue! And I would add that that is only if spreading viruses around the world don´t qualify as one... Too bad each time less money flows back home in this Castro-like era. All that together with its not so sandy Cancun beaches make this Latam prince seem, ever more, far far away from the happy ending story we would all love to see.

  • Report this Comment On March 22, 2010, at 10:03 PM, TMFBomb wrote:

    @RaptorD,

    Nassim Nicholas Taleb (The "Black Swan" and "Fooled by Randomness" author) had similar thoughts on the importance of tuning out the noise.

    Fellow Fool Eric Bleeker and I recently wrote articles on similar topics, too. Here they are:

    http://www.fool.com/investing/general/2010/03/12/we-need-val...

    http://www.fool.com/investing/value/2010/03/08/5-signs-of-a-...

    -Anand (TMFBomb)

  • Report this Comment On March 22, 2010, at 11:07 PM, josiegal wrote:

    I'd short all the cynical "Chicken Littles".

    The sky didn't fall today. In fact, it closed the highest in 18 months.

    In the words of Jimmy Buffet, "It's always 5:00 somewhere." There's always a market somewhere, too.

  • Report this Comment On March 23, 2010, at 7:52 AM, plange01 wrote:

    the best short was gold until google the online phone directory got itself thrown out of china now ist new price target is $19 a share!!

  • Report this Comment On March 23, 2010, at 4:05 PM, TMFEditorsDesk wrote:

    Alright folks, thanks for all the comments, which double as entries into the signed Michael Lewis book giveaway I told you about in the article. We're cutting off entries at this time (you can still comment...just won't be eligible for the free book).

    -Anand (TMFBomb)

  • Report this Comment On March 24, 2010, at 5:36 AM, jjspod wrote:

    Short Japanese government bonds. Look at its sovereign debt versus GDP.

  • Report this Comment On April 08, 2010, at 11:01 AM, TMFEditorsDesk wrote:

    In case anyone is curious, the 5 winners of the comments contest were (in no particular order):

    MAcDScientist

    Kilstofte

    UltraLong

    georcole

    unitra

    Thanks to all for commenting...good stuff all around!

    -Anand (TMFBomb)

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