I received a question about shorting stocks. I have never shorted a stock. I do not have a margin account. I do not buy options. I have never in my life borrowed money to buy a stock. And the last time that I sent my discount broker a check to cover a stock purchase was in 1984.
In other words, I am an old fogey. I was an old fogey thirty years before I reached 57, my current age.
The best hedge for a stock portfolio is to sell stocks.
I have felt the need at times to buy the double shorts for a stock index to hedge my significantly reduced stock portfolio in 2007-2008, but I sold my last one of those in 2008. I am constantly thinking, however, about using them to hedge a portfolio and the best way to do it. TWM vs. SDS: Hedging a Stock Portfolio with minimal small cap exposure
I do own one closed end investment company that goes long and short, symbol OLA, and information about that firm can be found at its web site. I have close to 500 shares. This is what the industry calls a 100/30 fund. Overview - Old Mutual/Claymore Long-Short Fund - OLA - Claymore Securities, Inc. This was one of my mistakes, thinking that it might be some kind of alternative investment for a bear market. The fund does sell at a discount to its Net Asset Value, listed at$9.25 as of 5/13. The distribution rate is around 20%, though that may be in for a hair cut.
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