Replies to post #135138 on Biotech Values

[mouton29]

Re Marc Faber.

I was actually considering subscrinig to his newsletter and then I read this report, including this paragraph, which is part of a 24 page report entitled "Dow Jones Below 1,000?" This is a prediction of technician Robert Prechter and Faber spends some time talking about what one would do if one really thought a 90% decline was in the cards (Faber is bearish but not that bearish, at least in the near term). Here is one of his thoughts:

One way to protect assets could,
of course, involve short selling — in
the absence of cash and bonds being
“safe” with the Dow below 1,000. (As
explained above, massive defaults
would occur.) A $1 billion portfolio
could sell short its holdings “against
the box” (meaning that, for the exact
same shares the portfolio is long,
equal short positions would be
maintained). With the Dow below
1,000, even if no transactions get
settled, the portfolio would have
been fully protected. However, with
the Dow on its journey to 1,000,
short selling will likely be banned
and short positions will have to be
closed out — so, again, there is no
full protection

Evidently it did did not occur to him that, instead of entering into a short against the box, one might instead simply sell.