Radio Show: The Short-Vol Trade Blows Up... Meb's Rare Coin Purchases... and Listener Q&A | #95
Episode 95 is a radio show format. We start with a recap of Meb’s recent travels to Nicaragua and San Francisco, but then dive into a discussion about volatility. With the VIX spiking at the beginning of the month, some short-vol funds suffered massive losses. We discuss the short-vol trade, then the long-vol trade.
Key Points
- Investors should be mindful of jump events and avoid investment strategies that could lead to 90% or 100% losses, such as short volatility positions.
- When considering a strategy that is guaranteed to blow up at some point, investors need to determine what return would make such a strategy acceptable, factoring in the rarity and potential magnitude of blow-ups.
- It is crucial for investors to fully understand the products they invest in, especially when dealing with complicated products that may involve hidden fees or complex structures like total return swaps.
Resources: Skin in the Game: Hidden Asymmetries in Daily Life – Taleb Vineer Bhansali on The Meb Faber Show in November 2017 Nervous About The Market? It Might Be Time For This Strategy – Faber Van Simmons Meural Invest With The House: Hacking The Top Hedge Funds – Faber Wealthfront Plans Groundbreaking Mutual Fund” – Barron’s Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies – Faber Meb’s free book Cloning The Largest Hedge Fund In The World: Bridgewater’s All Weather” – Faber The Hidden Fees Inside Managed-Futures Funds Site that compares fees Mission Impossible: Beating the Market Forever – Gray The Cheapest Portfolios In The World – Faber The Best Way To Add Yield To Your Portfolio – Faber How an Amazon Self-Published Book May Be the Latest Money Laundering Scam
Chapters
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| 1:34 | |
| 11:14 | |
| 16:09 | |
| 25:07 | |
| 33:38 | |
| 35:30 | |
| 46:39 | |
| 54:59 | |
| 1:03:07 | |
| 1:08:36 | |
| 1:11:12 | |
| 1:11:42 |
Transcript
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