# So there's going to be a depression. How can I make a profit from it? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [July 2, 2010, 12:14am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253 "2010-07-02T00:14:09Z")\ **Posts on this page:** 19\ **Page:** 1
**Author:** ![Plan\_B](https://avatars.discourse-cdn.com/v4/letter/p/3ec8ea/32.png) [@Plan\_B](https://boards.straightdope.com/u/Plan_B)\ **Post date:** [July 2, 2010, 12:14am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/1 "2010-07-02T00:14:09Z")
I just read about people making billions because they knew that the housing markets would collapse. Let’s say I’m sure we’re headed for a bad depression. How do I cash in? ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [July 2, 2010, 12:39am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/2 "2010-07-02T00:39:15Z")
I expect that if this comes to pass, and it’s a classic 1930’s style depression, you want to put as much of your assets into cash and other guaranteed face-value securities. Your cash keeps its value while the prices of goods and services plummets. ---
**Author:** ![DigitalC](https://avatars.discourse-cdn.com/v4/letter/d/ebca7d/32.png) [@DigitalC](https://boards.straightdope.com/u/DigitalC)\ **Post date:** [July 2, 2010, 12:42am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/3 "2010-07-02T00:42:29Z")
Alcohol is more popular during depressions. I imagine repo men and storage facilities made a killing during the housing crash. ---
**Author:** ![Shirley\_Ujest](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shirley\_Ujest](https://boards.straightdope.com/u/Shirley_Ujest)\ **Post date:** [July 2, 2010, 12:52am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/4 "2010-07-02T00:52:00Z")
Alcohol. Cigerettes. Chocolate. ---
**Author:** ![ratatoskK](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ratatoskk/32/2987_2.png) [@ratatoskK](https://boards.straightdope.com/u/ratatoskK)\ **Post date:** [July 2, 2010, 12:57am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/5 "2010-07-02T00:57:18Z")
Hire slaves to make cheap stuff that you sell to somewhere not as depressed. Oh wait, that’s already happening… ---
**Author:** ![panache45](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/panache45/32/64_2.png) [@panache45](https://boards.straightdope.com/u/panache45)\ **Post date:** [July 2, 2010, 1:04am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/6 "2010-07-02T01:04:06Z")
Buy gold. Invest in anything related to cheap entertainment. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [July 2, 2010, 2:20am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/7 "2010-07-02T02:20:49Z")
> [@panache45](#): > > Buy gold. > > . Gold right now is very high, and clearly in a bubble sitrep. I’d buy guns. ---
**Author:** ![thelurkinghorror](https://avatars.discourse-cdn.com/v4/letter/t/7c8e57/32.png) [@thelurkinghorror](https://boards.straightdope.com/u/thelurkinghorror)\ **Post date:** [July 2, 2010, 3:22am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/8 "2010-07-02T03:22:38Z")
Hobo bindles. Barrels with straps on top to put over your shoulders. Suicide booths. Invest in the (second?) Swing music revival. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [July 2, 2010, 3:52am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/9 "2010-07-02T03:52:30Z")
Short a bunch of stocks in bulk that mimic the opposite of a typical index fund. ---
**Author:** ![Iridescent\_Orb](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@Iridescent\_Orb](https://boards.straightdope.com/u/Iridescent_Orb)\ **Post date:** [July 2, 2010, 6:37am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/10 "2010-07-02T06:37:02Z")
I think there is a typo in **Shagnasty** ’s post. Shorting a stock means you make money when the price goes down. Stocks that mimic the opposite of an index fund will go up in value when the index (and the overall stock market) goes down. So, shorting such stocks will be a “double negative” and be similar to just holding the index itself. Either (1) shorting the index or (2) holding stocks that mimic the opposite of an index fund would achieve your goal. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [July 2, 2010, 4:45pm UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/11 "2010-07-02T16:45:46Z")
Firing managers will be in big demand. All you have to learns is “scram”!😃 ---
**Author:** ![Lemur866](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lemur866/32/434_2.png) [@Lemur866](https://boards.straightdope.com/u/Lemur866)\ **Post date:** [July 2, 2010, 5:18pm UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/12 "2010-07-02T17:18:25Z")
The trouble with shorting irrationally overvalued stocks is that you never know when the fools will come to their senses. So you might easily see that Amalgamated Widgets is trading at twice the realistic value, but to make money shorting Amalgamated Widgets you have to know when the correction will occur. If you take a short position and AW hasn’t crashed yet then you lose big time. Cash is risky to hold. It’s very tempting for countries to devalue their currencies when in a financial crisis, and the value of your cash gets inflated away. Of course, that might not happen, if there’s deflation cash is the best bet. But which is the crisis gonna be–a 1920s Germany inflation, or a 1930s America deflation? Hard telling, not knowing. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [July 2, 2010, 6:00pm UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/13 "2010-07-02T18:00:15Z")
> [@Iridescent\_Orb](#): > > I think there is a typo in **Shagnasty** ’s post. Shorting a stock means you make money when the price goes down. Stocks that mimic the opposite of an index fund will go up in value when the index (and the overall stock market) goes down. So, shorting such stocks will be a “double negative” and be similar to just holding the index itself. > > Either (1) shorting the index or (2) holding stocks that mimic the opposite of an index fund would achieve your goal. With the advantage in (2) that you’re not trading on margin. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [July 2, 2010, 7:29pm UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/14 "2010-07-02T19:29:21Z")
> [@Spectre\_of\_Pithecanthropus](#): > > I expect that if this comes to pass, and it’s a classic 1930’s style depression, you want to put as much of your assets into cash and other guaranteed face-value securities. Your cash keeps its value while the prices of goods and services plummets. I do not believe that federal authorities will permit significant price deflation. Not only would that be disastrous for the economy, it would increase the government’s own debt burden. (There are ways to fight deflation even when interest rates are near zero.) I’d guess answer to OP is to trade against cyclical stocks, but I don’t know whether short-selling shares or buying put options would be better. ---
**Author:** ![Spice\_Weasel](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spice_weasel/32/5435_2.png) [@Spice\_Weasel](https://boards.straightdope.com/u/Spice_Weasel)\ **Post date:** [July 2, 2010, 8:48pm UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/15 "2010-07-02T20:48:51Z")
Invest in the [fringe economy](http://www.usatoday.com/news/opinion/editorials/2006-01-26-young-edit_x.htm). Payday loans, shady used car sales, cash checking services, rent-to-own merchandise, credit cards with ridiculous interest rates. Of course, that would be a scummy thing to do, but it would probably work. ---
**Author:** ![Only\_Mostly\_Dead](https://avatars.discourse-cdn.com/v4/letter/o/f19dbf/32.png) [@Only\_Mostly\_Dead](https://boards.straightdope.com/u/Only_Mostly_Dead)\ **Post date:** [July 3, 2010, 3:20am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/16 "2010-07-03T03:20:44Z")
> [@thelurkinghorror](#): > > Barrels with straps on top to put over your shoulders. It’s a [rather small market](http://www.theonion.com/articles/why-am-i-the-only-homeless-man-still-wearing-pickl,11401/). ---
**Author:** ![nikonikosuru](https://avatars.discourse-cdn.com/v4/letter/n/5f8ce5/32.png) [@nikonikosuru](https://boards.straightdope.com/u/nikonikosuru)\ **Post date:** [July 3, 2010, 3:22am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/17 "2010-07-03T03:22:24Z")
Futurama-style suicide booths? ---
**Author:** ![kopek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kopek/32/337_2.png) [@kopek](https://boards.straightdope.com/u/kopek)\ **Post date:** [July 3, 2010, 5:04am UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/18 "2010-07-03T05:04:09Z")
> [@Spectre\_of\_Pithecanthropus](#): > > I expect that if this comes to pass, and it’s a classic 1930’s style depression, you want to put as much of your assets into cash and other guaranteed face-value securities. Your cash keeps its value while the prices of goods and services plummets. And if things really bottom out and you have some spare cash, buy rare collectibles. Art, low mintage coins in top grade, antiques. Some fantastic collections were built during the last Depression and I suspect some will this time around as well if things get really bad enough. ---
**Author:** ![ExTank](https://avatars.discourse-cdn.com/v4/letter/e/35a633/32.png) [@ExTank](https://boards.straightdope.com/u/ExTank)\ **Post date:** [July 3, 2010, 11:05pm UTC](https://boards.straightdope.com/t/so-theres-going-to-be-a-depression-how-can-i-make-a-profit-from-it/545253/19 "2010-07-03T23:05:07Z")
Booze, cigarettes, drugs, and guns. Economically depressed people become emotionally depressed people, who want to smoke, drink, and get high to forget their woes. Of course, the government takes a dim view of these activities, from both the supply and demand side, and so they, and other, less official (but no less violent) forms of competition will attempt to shut you down and/or take away everything you own. This is where the guns come in. Or you could just start robbing banks. It worked for Dillinger, at least for a while; he just didn’t understand the concept of “Quit while you’re ahead.”