And so to bed. It turns out the conclusion has presented itself, in the need for the inefficient, untrained, profit driven, to keep their heads above water using direct income approaches for marginal gains, they require those with knowledge who can generate passive indirect returns to act as the stop, otherwise a rush for the exits ensues.
Those few, of which I know some and am included, have now decided to step out of the way and go peer to peer with the details thereby removing the stop. What happens next, find a bubble, and in most cases over the coming weeks and months it will make a new high, but as there is no circuit breaker in place it then becomes a race to the bottom, not of the slow variety. So how do you profit from that knowledge, via leveraged shorts you take capital profits in tranches, never underestimate the stupidity of what people will do in a crisis, by knowing which brokers to use with what capital in layers, what instruments to trade with them, when to not use them, when to stay out of the way of the markets and their whipsaws.
Then, the even smarter ones will have access to short timeframe HFT style trading, which allows them to be in and out of the markets in minutes, no capital at risk as only $1,000s are deposited with the brokers, not $10,000s to $100,000s for the marginal gains or $millions for capital gains, and via compounding generate eye watering returns as the markets cannot react that fast to movements, you generate income on the way down and in the whipsaws on the way back up. In essence, the passive capital has to be used to generate the active income along "too big to fail" lines, en-masse or individually, even though using passive capital is hideously inefficient for generating such income. That, new traders, is the difference between self-certification and accredited.
