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Q: Jesse, good call on HK but I didn’t buy it . what do you think about TBT now? I would be interested in where you see the most money to be made when people lose faith in the fed—–shorting bonds? Gold and miners? Shorting stocks? I assume all 3 are good but where is the biggest weighting and upside? I noticed you like QCOM at a price but Fred is down on it—-You must be looking at it for a trade but when things implode it should fall, too?

J: For a number of reasons I think TLT is probably going to bounce. Yesterday marked a daily DeMark exhaustion and sentiment has become too bearish for now. Just not a great risk/reward setup either long or short in long bonds right now, in my opinion.

I think shorting stocks – especially small caps – will be the most profitable trade over the next couple years once it begins to work. As for losing faith in the Fed, that’s a longer-term trade but gold and the miners will be the best way to play that.

As for QCOM I’m not a raging bull by any means. In fact, I’m generally bearish on the semi space. Having said that, I think QCOM probably holds up better than most if the sector does selloff.

Q: Hi Jesse,

I liked what I saw enough to want the full year subscription. Good stuff.

You have a lot of good ideas that I could take for my brokerage account. However, I am rather limited on how to invest on the downside via a 401k/IRA.
I’m looking for good bets for a 30%+ correction and a willingness to leave the bet in place for many months.
401k/IRA choices don’t include shorts or options. Most negative ETFs have a “drift” cost that is too high or other than a short term trade.
Your gold idea is good or the Hussman fund now that we are top of cycle looks good but I wish I had more choices/ideas on the downside via a 401k/IRA.

J: That’s a really good point. As for bearish plays that are longer than a trade I think that’s just really tough. Because the market moves higher most of the time you really have to be a trader when taking the short side. I’m using the inverse ETFs because I think that’s the easiest and most accessible way to do it for most. As for an alternative that requires less trading like Hussman’s fund I think that’s a very good alternative, especially from a contrarian standpoint right now.

Q: Can you recommend any bloggers or analysts that you respect but present a counter argument to what you present.

While I agree 100% with your point of view I seem to be seeking out voices that confirm my bias (such as John Hussman et al). So wanted to be deliberate and read some thinking on the other side (essentially arguing for continuing to invest in equities at current evaluations and basis for arguing so).

I continue to read your writings with avid interest. Just wish I had started reading earlier!

J: Absolutely and thanks for asking. First, I think Jesse Livermore (pseudonym) is a very thoughtful and intelligent market watcher with whom I don’t always agree. Find his site here:

Second, I also really appreciate Alex Gurevich’s process though we regularly disagree:

Finally, Ben Carlson does a very good job educating individual investors over at his site:

Q: Thanks Jesse. I like your opinions. I would just like to note that our business here in the very Northern CA. Is nuts. It seems like the economy is really going. That is why I am hesitant to short. I could be wrong, but down in the trenches of small business things are hopping!

J: Thanks for your insight. I’m always eager to hear these sorts of things.

Q: Do you consider the trade ideas as a separate portfolio ? I am not sure what to make of the allocation percentages attributed to these.

Please advise.


J: I do treat them as separate portfolios. I don’t personally own anything in the ETF portfolio. That’s really geared towards a more novice investor that’s not interested in being very active or doing the work to understand the trade ideas. As for the allocations, read this from last week’s Q&J: