Good News for People who Hate Bad News

i don't think the meltdown is going to be QUITE as bad as he insists. must be that entrepreneural bias...

The price of a security is its expected value, more or less. If the market thinks a security has zero chance of going up, the market must also think it has zero chance of going down.

The possibility of a rebound is priced into this market, and so is the possibility of further decline; the two should balance.

Even in really crazy markets with forced selling due to liquidation, this rule shouldn't get too far out of whack. If a security can only go up, people will buy it until it can go down again. If a security can only go down, people will sell it until it can go up again. If this guy really believes he has privileged info that the market can only go down from here, he should short-sell his way to a risk-free fortune.

But somehow, I doubt that, once this is pointed out to him, he will be anywhere near as confident with a few thousand dollars of his own money, as when he is helpfully advising entrepreneurs about their business strategy for years to come.