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  • ex.goldbug ex.goldbug Jul 27, 2014 4:22 PM Flag

    Blackrock's Koesterich chimes in: "Market could get Nasty" very soon

    Bull turns bearish. Minicrash (down 10-20%)? Megacrash (down 20%)?

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    • Won't happen. As a result of the "Fed put", every money manager should be fully hedged to the downside as a result of cheap options. Even most ordinary investors should be hedged. I am. My positions are set up to sustain up to a 10% market decline on their own without losing that much. I've bought cheap put spreads that I pay for with calls. If the market falls 10% - 20%, I'll actually make more than my portfolio would lose due to vol expansion. It's too hard to call market turns, hedge & stay invested.

      • 1 Reply to variationisenemy
      • "Hedging" such an unnecessarily complicated way to 'invest'. If you're long (which iz very stupid right here), then reduce your holdingz by the amount you think your risk iz to the down side and increase your cash. Buying puts and put spreadz by selling callz iz just ASKING to beburnt in the optionz premiumz and STILLlose your ars. Use cash az a 'hedge' dummy - its MUCH EASIER. That said sybby iz a 37% equity margin short, and sybs target isnt a 10 or 20% drop in the majorz - its a 65-75% drop on pure tightening and complacencycoupled with a soon to be inverted yeild curve with the 2's overthe 10's . And sybby aint phvckin "hedged" with stupid call optionz crack bets on that call. Its much too 'complicated' for sybbys simple mind.

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