I have been bearish on the general equities for a long time. I have been sitting on the sidelines, holding my gold mining stock certificates out of the market as recommended by Jim Sinclair many years ago. If I was to keep my shares in a broker account they can be used by short sellers to hit me over the head. No thanks. If the broker has a meltdown my assets are tied to their basket. It could be years before a Judge figures out who owns what and if the broker actually bought the shares you thought you owned.
Years ago I had a cash account . This was to keep the broker from lending my trading shares still in my account . I had most of my shares in certificate form . I sent a certificate back into the broker to have it reissued with some simple changes “transfer on death” TOD. What should have taken two weeks went on for about six months. I believe my shares were loaned to a short seller . They gave me the runaround until I threatened to sue them in a court of law. After that my certificate was at the house in just a few days.
The problem I have with short sellers is they dilute the market. If I own 5,000 shares of xyz mining in my account and my broker was to loan them out to a short seller , the short seller sells them into the market. You buy them because you see that metals are going to rise in the future and are a steal at these prices. So now I think I own the 5,000 shares of xyz mining because they show up on my statement and when you get your statement , you too think you own 5,000 shares of xyz mining. The short seller owes the broker 5,000 shares of xyz mining. Some people think this is fine. When, not if the market melts down who owns the 5,000 shares of xyz mining ? With the markets in a melt down would the short seller even be able to buy back 5,000 shares of xyz mining? Will the markets even be open for business? Who knows.
By holding your stock certificates you eliminate this problem.
If you think a stock price is too high , don’t buy it. Wait for the price to fall to a level that you are comfortable buying it.
Another thing I see happening right now is irrational exuberance big time. The values for the general equities in my opinion are off the charts and could be the start of hyperinflation showing its head. What will happen if the people trading this market decide they have made crazy profits and its time to sell. Sell to who ? At some point they will run out of stupid people chasing it up . Then what will happen ?
The big sell off and maybe the end of the markets for some time.
I will hold my shares in certificate form and sit back and watch. Shares can be sold privately without a stock exchange as far as I know.
Anyhow that’s my 2 cents.
What was it Clint Eastwood was famous for saying ?
“Do You Feel Lucky Punk ?”
Tin Pan Miner
Perfectly!