I think the idea is that short position pays off up-front, and then you don’t need to worry about the loan if everyone’s dead.
If by paying off you mean this bet actually working I think you’re right though. It seems more likely that the stock market would go up in the short term, forcing you to cover at a higher price and losing a bunch of money. And if the market stays flat, you’ll still lose money on interest payments unless doom is coming this year.
Also, in this case you want to actually spend the money before the world ends. So actually losing money on interests payments isn’t the real problem, the real problem is that if you actually enjoy the money you risk losing everything and being bankrupt/in debtors prison for the last two years before the world ends. There’s almost no situation in which you can be so sure of not needing to pay the money back that you can actually spend it risk-free.
I think the riskiest short-ish thing that is even remotely reasonable is taking out a 30-year mortgage and paying just the minimum amount each year, such that the balance never decreases. Worst case you just end up with no house after 30 years, but not in crippling debt, and move back into the nearest rat group house.
I think the idea is that short position pays off up-front, and then you don’t need to worry about the loan if everyone’s dead.
If by paying off you mean this bet actually working I think you’re right though. It seems more likely that the stock market would go up in the short term, forcing you to cover at a higher price and losing a bunch of money. And if the market stays flat, you’ll still lose money on interest payments unless doom is coming this year.
Also, in this case you want to actually spend the money before the world ends. So actually losing money on interests payments isn’t the real problem, the real problem is that if you actually enjoy the money you risk losing everything and being bankrupt/in debtors prison for the last two years before the world ends. There’s almost no situation in which you can be so sure of not needing to pay the money back that you can actually spend it risk-free. I think the riskiest short-ish thing that is even remotely reasonable is taking out a 30-year mortgage and paying just the minimum amount each year, such that the balance never decreases. Worst case you just end up with no house after 30 years, but not in crippling debt, and move back into the nearest rat group house.