Would this be dumb:
FB looks undervalued to me relative to the SPY. FB has a forward PE of 20.75 (according to Yahoo) that is just a bit higher than SPY's forward PE 19.53 (according to YCharts)
So I'm predicting FB will outperform SPY.
I'm also fearful that the SPY is overvalued.
My portfolio right now is about 30% FB, 30% other stocks, 30% cash.
I'm considering adding an extra 100% of my porfolio to FB and then shorting SPY 100% So it looks like 130% FB 30% other stock 30% cash -100% SPY
Interactive Brokers would charge less than 2% on the FB margin, and might give me some interest on the SPY short.
Other brokers will charge alot more on the FB margin, and not give interest on the SPY short.
Going long FB options seems a bit expensive.
Any other way I should make this bet?
Or should I just convert the 30% cash to FB stock? Which eliminates any benefit of being able to use that cash during a market decline
Edit: Maybe less dumb would be to use that 30% cash to buy FB, and then short only 30% SPY for a net 70% long portfolio and no margin fees. It's still a bit dumb to be so concentrated, but I'm not seeing much else to invest in comfortably.
Submitted March 12, 2017 at 11:56AM by jastor-kae http://ift.tt/2niSst2
