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Guest Post: Strategies That Avoid Financial Extinction
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When markets are drying up
and dying, does it make cents to
play the same old losing game?
Mr Buffett may have to cover his
naked puts yet or watch his credit
slip another notch or two. His
stock split maybe put BRK/B
in weaker hands...
http://www.jubileeprosperity.com/
strategies to avoid financial extinction
1) write a market letter $250
2) give advice of how to avoid market extinction $250
3) start your own company work like heck for 30 years , sell to a bigger player
then do 1) and 2)
90% of market traders lose ,,
so the last item to win is be part of the `10%
What a bunch of nonsense. These markets are completely rigged. Pick stocks, ha! When Goldman et al. are front running with HFT and the big players have the ability to move the markets without any regards to fundamentals, the average investor is playing into a loaded deck. On top of this the Fed is creating so much money as to make ordinary savings more and more worthless.
The only answer is to hunker down with assets you can actually touch and feel. Metals, collectables, land, oil etc. In the long run, these will always go up...in the very least keep up with inflation.
boaz weinstein widely credited with creating cap structure arb??? really?? give me a break...
This post is a waste of space, sorry.
http://en.wikipedia.org/wiki/Honecker had a fun retirement. There is a message in that for some.
No entry rules, no exit rules, no allocation rules. Yeah, sounds like a great strategy.
I thought that would be too Wilmottish.
Am I wrong?
Very interesting....let me add buy volatility now. It is cheap again, and it can't any cheaper.
are you the guy selling me long-dated VIX puts?
Long-Shorty here; I seem to keep forgetting my password, so today I will be anon.
FWIW, here's my best advice for avoiding financial extinction:
- have some investments that will fare OK in an hyperinflationary world, and some that will fare OK in a deflationary world
- include alternative asset classes (including long-short equity and global macro)
- never sell an option with unlimited risk
- try to be long some options that have major upside in the event of unforseen weird stuff (vix calls fit this bill, but you have to be careful not to overpay for them)
- always have some cash
- never borrow money to own stock
- always size your short positions as if you will be squeezed. synthetic shorts and short futures positions are much preferable to actual short positions.
How about #1, realize someone must pay for that free lunch
#2 accept fact that it will likely be you paying for that free lunch unless
#3 invest in yourself and those around you
#4 seek market neutrality to maintain wealth while continuing #3
+1000
Strategy to avoid financial extinction
(assuming you are not a large campaign contributor or lobbyist)
1) Realize the government has bailed out a lot of crooks, who in turn are giving themselves large bonuses at the expense of the stockholders and taxpayers.
2) Realize that most politicians are either bought for favoritism or too naive to realize how they are also scammed.
3) Don't believe what the authorities tell you (such as the crisis is contained, or jobs will be created, they believe in a strong dollar, etc.)
4) Bet the opposite way once the masses have acted in the predictable way on any news. (For example, if the IMF wants to sell a lot of gold, buy the dips.)
5) In the short run, pay more attention to price vs. moving average on a chart than fundamentals.
6) In the long run, buy the dips on long term demand growth and long term supply constraint. (Gold, baby, Gold!)
Simple way to avoid meltdown - long Gamma...(and I mean Gamma not some stupid way out of the money things that people pay fortune to own). But this strategy required work to cover theta, and nobody want to work anymore.
I don't know your book, but the ratio-call spread I described gives a boost my portfolio Sharpe ratios. Much better than straight index investing.
issue is, most RV (outperformance) books, short beta, and been long XYZ against short SPX is short gamma trade. This why they all blew up in 2008. As in times of collapse everyone need beta and nobody want/need XYZ. So, despite what all risk models tells to long/short muppets they are short gamma and buying deep out of the money puts on SPX doesn't solve problem, as you have no gamma for next 300 points... so, best way just buy straddles, short strangles and have your long/short portfolio on...
I appreciate this.
BTW, you ever work with gamma swaps?
i work with variance swaps, not sure they are same. this one your should always be short against long straddles. you get free intraday gamma...
I get you... they are dispersion vehicles. Just wonder if the product could be tailored to generate efficient long gamma exposure and hedge the other greeks.
absolutley YES. its great product for portfolio that doesn't want to bother with day to day gamma hedging. Very low theta bill and you long variance (avg vol, not actual vol). So, main users of it - long/short guys. We use to be main sellers of it, bcs in my previous life i market make listed options, so you end up long gamma any way, and you sell variance swap to equity funds.
Buy gold & silver related assets.
Stop listening to mainstream financial outlets.
Get your spirit in order.
Know what youre doing and what youre dealing with.
Enjoy life !
Stop day dreaming, act NOW.
To avoid financial extinction.
No matter what you believe, no matter what you feel,
DO NOT fly your plane into a building.
1) buy a bank
2) buy a congressman
Here's a better way:
1) Decide which sector or segment will outperform. For example, I think mid-cap's will outperform small caps in a rising rate environment.
2) Go long the a 3x mid-cap ETF
3) Go short a 3x small-cap ETF in the same dollar amount
4) Keep positions balanced over time
If you're wrong, the trade will grow progressively negative, but because you've taken market risk out of the trade, you won't lose your shirt
If you're correct, it's a license to print money
This is stupid.
Fees and trading costs are >3% on each side of your trade.
You steadily lose 5-10% while also not making good decisions.
If you want to earn significant alpha, in a high-quality way -- I assume you are a professional and looking to make $10s or even $100s of millions.
If not... then just treat it as speculation. Dont count on it... but the risk/reward is not bad. Its WAY better than casinos.
But stay in single stocks. 3x ETFs are just license to rape you with fees.
1.) Go 100% long solars because this market only goes up and a technology that will never be economical without subsidies is a sure long term winner.
1/3 Stocks
1/3 Bonds (pimco total return)
1/3 Cash (short-term bonds)
I dont think this portfolio lost 10% in ANY year the past 20 years. I think it made about 5-6-7% per year.
Am I wrong?
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