"Short-selling is as legitimate of a stance as going long and it helps you with an absolute return portfolio. You do the work on a stock or sector, you find out that it is overvalued, you wait for the catalyst that lets the market begin to realize and discount your investment thesis, and you pull the trigger. Uneducated investors deride short-sellers as "evil" as they make money as those very same uneducated investors lose money. That is a silly way to look at the matter."
I made my first "short" investments yesterday. Using "ultra short" ETF's, several options exist. I compared several short ETF's and reviewed their performance from 6/6/08 to 3/6/09 (Tremor #1). During this period, the Dow was down 46%. The ETF's I acquired did the following during the same period:
-ProShares UltraShort Financials ETF (SKF) +126%
-ProShares UltraShort Nasdaq ETF (QID) +82%
-ProShares UltraShort Materials ETF (SMN) +84%
Check them out.