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The breaking point for China on trade will be when there is social unrest. These bureucrats/tirants aren't used to be pushed around, they will fight Trump but the real leverage is with the US, its the largest importer in the world. If they cut or credibly threaten to cut down imports from China...

Its only the perma anti-Trumpists that are missing what is going on with their simplistic view of 'trump wants a trade war!', anyone who's got any sense is starting to figure out that there is a lot more to this. I suspect my view will become consensus within a year or two But best thing Trump...

The WSJ jumps on my Trump trade thesis like 1 month later http://blogs.wsj.com/economics/2016/12/22/is-donald-trumps-trade-talk-confusing-on-purpose/ "Some investors and trade experts say the uncertainty about Mr. Trump’s trade plans could give him leverage. Trading partners may fear the U.S...

A very important trade that is setting up in the US now, 'buy the rumor sell the news' type effect on the Trump presidency (that along with his first week/month which is likely to involve 'crazy' announcements). The S&P500 will probably sell-off as it gets closer to inaguration (Jan 20), bonds...

The key here is to try to 'idiot' proof your hedges by being very selective and diverse in your choice. If any of them dont work out, you got 3-4 other ones, with different correlations. Its diversification inside a hedging plan

When it comes to these 'volatility hedges' I think one approach that can make sense is to have a diverse basket of hedges, so -Have a balanced diversified portfolio that tries to achieve the 'efficient frontier' -Have a certain % in cash -Have a certain % in safe haven bonds (and what...

If someone can do that long-short strategy exclusively off S&P500 stocks (or stocks with that are big enough to be there but aren't), then these concerns no longer apply as much. Its a lot harder for those companies to squeeze. Most big funds out there lend out their S&P500 shares to generate...

That Asness paper shows that internatinal diversification has worse skewness short-term but long-term they decrease risk. What these long-short funds (especially if they use small to mid caps) do is to patch up volatility problems by adding shorts. I'm sure their short-term skewness look great...

I"m not trying to pick on Hempton, I'm just raising the possibility that it might not make much sense for most people to try to reduce their portfolio risk by adding shorts, specifically if they are doing with small and mid cap stocks. The reasons: -Its very hard to find very good shorts, the...

Over the last 4 years I have done a lot of short selling in my day/swing trading (I'm looking to move away from that but thats for another post). One of the things that I've learned is that the results of someone who does a lot of short selling aren't just the "accumulated profits" that...

Asness paper about international stock diversification http://www.retailinvestor.org/pdf/ForDiversify.pdf What they find: -Global diversification improves risk metrics over the long-term but can actually worsen some of them short-term. This makes sense, if you want 40% of your money in equities...

UST bonds if you need the margin, a balanced portfolio if you dont

MDLZ popping today. looks like the market likes the fact the 3G controlled Ambev just sold a 3B asset http://www.wsj.com/articles/coca-cola-to-pay-3-15-billion-for-ab-inbev-africa-business-stake-1482302697 Looks like they are raising some cash for something

Soros says on Alchemy of Finance that a loose fiscal policy + tight monetary policy is bullish for a currency. That seems to be playing out classically on the USD right now

It sounds like you are in a special situation, that one that I'm in myself as well. We can AFFORD to get squeezed in real estate. We can just say 'screw it, I will just pay the higher rent and continue to live here'. I'm still hedging as a matter of discipline but if I get squeezed like you was...

Assuming finance hasnt broken down in Brazil, if long-term inflation linked bonds yield 6% real pre-tax (and they do) and REITs pay 8-9% real (after-tax), then stocks are priced to return 10-15% real. The CAPE ratio also suggests that

In Brazil, looking at some estimates, one can earn around 4-5% real by buying real estate (price per square foot/rent per squarefoot minus tax or without tax in case of owner occupied). With the REITs, you can get around 8-9%. This is also what makes me confident that the stock market is...

http://www.etf.com/sections/index-investor-corner/swedroe-em-looks-terrible-time-buy?nopaging=1

The idea of building a REIT portfolio to hedge housing costs is better than what people do, which is to take out a big mortgage to buy a home. Then they will end up paying a lot more for that RE because of interest costs. Whatever disposible income people have to pay in mortgage payments, they...

I dont own RE, I own REITs and with the dividends I receive I can pay my rent and live anywhere I want in Brazil. I get the freedom to move AND the protection against increase in prices. In the US, a potential plan is to own selected REITs (with a lot of exposure to your area) in a tax-free...