[mikeash]

What if you are very sure that a stock is overvalued, but totally unsure where it will peak first? Shorting it could leave you in real trouble then, even if you can somehow be totally certain that you're right about where the price will eventually be.

[nickff]

I was talking about the S&P500, which is composed of a few hundred different companies, so the risk of one company hurting you is low. You are right about the risk of shorting, but it is the strongest bet you can make. I would probably take out a put option on an S&P500 ETF if I agreed with the post I initially responded to. By buying the S&P501-750, you would also be fairly well secured against market upside risk.

My first response was intended more as a rhetorical question asking whether the poster is actually willing to bet money on their idea. I never really meant to enter into a discussion on the pros and cons of various trading strategies.

[mikeash]

Even the S&P 500 could keep on going up a long way despite eventually being doomed to drop substantially. (I have no idea if it actually is, of course.)

My point is just that seeing if someone is putting money behind their opinions about the long term isn't really telling, because "markets can remain irrational longer than you can remain solvent" and you may not know just how long term it'll be.