France Is On Fire

Portfolio Armor's Photo
by Portfolio Armor
Saturday, Jul 01, 2023 - 10:24
French rioters set cars on fire.
Rioters in France set cars on fire, as civil unrest spreads across the country.

Not Just Paris Is Burning Now

In a post earlier this week, we wrote that Paris was burning in the wake of the police shooting of a North African teen. Violence and arson have since spread to multiple cities in France, including Marseilles, where rioters attempted to torch that city's historic, largest public library. 

Some extraordinary video of the fires and violence in France is appearing on social media now,

And some rioters are armed with infantry weapons, 

Civil Unrest Or Civil War? 

The civil unrest has gotten to the point where former French presidential candidate Eric Zemmour described it as "the early stages of a civil war".

And many French police seem to agree, as French entrepreneur Arnaud Bertrand suggests below. 

Here is his translation (emphasis mine)

Now that's enough...

Facing these savage hordes, asking for calm is no longer enough, it must be imposed!

Restoring the republican order and putting the apprehended beyond the capacity to harm should be the only political signals to give.

In the face of such exactions, the police family must stand together.

Our colleagues, like the majority of citizens, can no longer bear the tyranny of these violent minorities

The time is not for union action, but for combat against these "pests". Surrendering, capitulating, and pleasing them by laying down arms are not the solutions in light of the gravity of the situation.

All means must be put in place to restore the rule of law as quickly as possible.

Once restored, we already know that we will relive this mess that we have been enduring for decades. 

For these reasons, Alliance Police Nationale and UNSA Police will take their responsibilities and warn the government from now on that at the end, we will be in action and without concrete measures for the legal protection of the Police, an appropriate penal response, significant means provided, the police will judge the extent of the consideration given.

Today the police are in combat because we are at war. Tomorrow we will be in resistance and the government will have to become aware of it."

Republic World, which gives the same translation, notes that these two police unions represent 50% of French police. 

France Today, The Rest Of Europe Tomorrow? 

The Prime Minister of Poland put out a video comparing how peaceful Poland was compared to France, but Poland seems headed in the same direction as France. 

Unfortunately, Poland and some other Eastern European countries seem too focused on past threats (The Soviet Union, which they apparently conflate with today's Russia) and not on the present threat, of Western Europe importing hostile minority populations. If importing violent populations from the third world is the price of the European Union's grants and loans, maybe that's too high a price to pay. 

Let's wrap this up on a more positive note, with an update on the performance of our hedged portfolios, a way to manage risk while different parts of the world erupt in flames

Hedged Investing In A Chaotic World

In recent weeks, I've shared the performance of Portfolio Armor's hedged portfolios. These portfolios last for 6 months, so this week I can share the performance of one our site created on December 29th of last year, for an investor unwilling to risk a decline of more than 20% over the next six months.

This was the portfolio:

The bottom seven names in this hedged portfolio were selected because they were the ones with the highest estimated potential return, net of hedging costs, when hedging against >20% declines. Our site started with equal dollar amounts of each, and then rounded them down to round lots (numbers divisible by 100), to lower hedging costs. Then it used a tightly collared position in Ambarella (AMBA 0.24%↑) to absorb most of the leftover cash from that rounding-down process.

The expected return, as you can see in the portfolio summary at the bottom of the image below, was 8%, and the “net potential return” (estimated maximum return, net of hedging cost) was 30%

And Here's How It Did: 

Net of hedging and trading costs, this portfolio was up 31.92%, versus a 15.13% return for SPY. You can find an interactive version of the chart above here.

And if you want to create your own hedged portfolio (for dollar amounts as small as $30,000), you can subscribe to our website by clicking the image below (a website subscription includes complementary access to the Portfolio Armor trading Substack--just email me after you subscribe). 




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