Shorting the market requires precise timing. Being early is just as bad as being wrong.
Exactly. It is not enough to know that a company stock will go down. It is necessary to know that it will never go higher than a certain point above the current value (not even momentarily) before it goes down. If you have a fuckload of other people’s money you can just keep double-or-nothing-ing it, that’s what banks were doing to gamestop, except that this can sometimes cause the stock to go even higher (a short squeeze), which would make you (who doesn’t actually have a fuckload of other people’s money) lose all of your money.
edit: also the other concerning possibility is that stock prices can go up simply due to the dollar going down.
Exactly. It is not enough to know that a company stock will go down. It is necessary to know that it will never go higher than a certain point above the current value (not even momentarily) before it goes down. If you have a fuckload of other people’s money you can just keep double-or-nothing-ing it, that’s what banks were doing to gamestop, except that this can sometimes cause the stock to go even higher (a short squeeze), which would make you (who doesn’t actually have a fuckload of other people’s money) lose all of your money.
edit: also the other concerning possibility is that stock prices can go up simply due to the dollar going down.