The effect of this hedge is not to speculate on a market decline (the Fund does not take net short positions), but is simply to remove the impact of broad market fluctuations from the portfolio, while at the same time earning implied interest of about 5% (equity derivatives are generally priced to reflect an implied interest rate somewhere between the 3-month Treasury bill yield and the broker call rate).
Read the whole thing. Despite the peculiar exchange of comments I had with a reader last week who seemed to think I was saying otherwise, Hussman is a must read. I only wish he wrote more often.
Minyanville has a blog. I think I saw this over on Adam's site but they sent an email letting me know about it. From the stand point of I would never join a club that would have me as a member, I tried a couple of times to write for them and got no where (insert smile). Their blog will be a must read as well.
I received a free copy of this book with the hope that I would review it. It is a very thick book so I did not read the whole thing but this is a very well written book. Outstanding.
It offers very in-depth profiles of 16 very successful traders but is written in such a way that it flows right along. I got the feeling I should know who the author is but I do not. Point being I came in to reading with no expectations and was very impressed. I was not compensated in any way for this other than the book itself.
7 comments:
Yes, always an excellent read. I have money in his fund and always recommend it to people who are looking for a relatively safe way to invest in stocks.
This fund is quite appealing. I've been aware of it before and wanted to have a better evaluative feel for it..Roger, or et al, to what degree have you allocated money to this fund? What do you think may be some its limitations?
To anon,
that is potentially a slippery slope. You are buying his ability to correctly know when to hedge and when not to hedge. As he is like anyone else it makes sense to think that he will get some right and get some wrong. Things being what they are he is right far more often than he is wrong but that he hedges incorrectly is the risk.
I will not tell a stranger how much to put into a product. I would ask if 95% of your equity portfolio goes down 20%, in line with the market and you have a 5% weight in a fund that goes up 3%, is that enough protection for you?
Only you can answer that for yourself.
Hey Roger, I haven't been this bullish since August of 1987.
i hope you are closer to the mark this time around
Random Retard, what is your take on the market?
Entries & Exits
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- from Traders Press catalog . . . seems Dr Alexander Elder has also written :
Come Into My Trading Room
Category: Systems and Methods
Trading for a Living
Category: Systems and Methods
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