Quote:Unless large banks or hedge funds are paying for the information (which is entirely likely) they don't have much more of an advantage than anyone else.  Their risk is typically just as big as yours.

 

There are factors and cycles with many stocks where you can make educated guesses on shorting them.

 

Edit:  The average Joe may have trouble getting a credit limit with a broker so they can short a stock.  It's not for everyone...and I don't have enough $$$$ to do it, but I know people that have and have done well.  They also limit their risk.

 

I'm sorry if I'm being overbearing here, but this is something that has interested me for a long time, so I have a lot to say about it. 

 

1) The only way to limit your risk is to limit your gain. 

2) Anyone who is telling you they are beating the the market is probably lying about it, because very few people (you can count them on one hand) can consistently beat the market average.  

3) I doubt these people are telling you the truth.  And if they are telling you the truth, I doubt they will also tell you when they lose back all the money they made. 

 

Beating the market is hard.   REAL hard.   That's why people get paid millions to try and beat the market, and they almost all fail to do it.   They might beat the market for one year, or even for several years, but eventually they get burned.  

 

The average hedge fund has better information than you do because they are in effect standing right inside the company watching it.   They know everything before you do.  

 

To beat the market you have to have an aptitude for math, the ability to read a financial statement, iron-willed discipline, nerves of steel, and you have to work at it very very hard.   There's no way around it.    There's no short cut.   If there were, we'd all be rich.  

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