sorry to be a brown nose but boy I love your posts. quality content.
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Taleb fund and how it profited
- Thread starter cdcaveman
- Start date
sorry to be a brown nose but boy I love your posts. quality content.
Hey Mav, I think there is a flaw in your argument. Namely, who would be stupid enough to take
the other side of a FRA that pays a billion on a measly 15% stock market drop? you? What
is your bid/ask?
Huh? I said a million in principal with a 5% annual rate or simply say i* with the NPV being 1,000,000/(1 + i*).
I'm not sure you understood my statement, a FRA is just a forward rate agreement.
That fund and all others like it are way down in the last several years despite making whatever they made this month. I find it laughable that the media is so irresponsible to parade this guy out for making a billion dollars without telling people how many billions were lost bleeding money month after month waiting for the black swan event to happen.
Any traders who have any experience at all or any backtesting what so ever already know there is no point trying to profit from tail risk. You lose way more money in the long run hedging it out completely than you do just making nice little profits month after month and occasionally taking a small hit when shit hits the fan. When the VIX goes from 13 to 53 in a week you're supposed to lose a bit of money, that's trading.
You should hedge enough so you can make a nice safe orderly stop-loss out when black swan events happen. Don't hedge so much that you profit from them, because you will definitely bleed more money in the long run doing that.
Any traders who have any experience at all or any backtesting what so ever already know there is no point trying to profit from tail risk. You lose way more money in the long run hedging it out completely than you do just making nice little profits month after month and occasionally taking a small hit when shit hits the fan. When the VIX goes from 13 to 53 in a week you're supposed to lose a bit of money, that's trading.
You should hedge enough so you can make a nice safe orderly stop-loss out when black swan events happen. Don't hedge so much that you profit from them, because you will definitely bleed more money in the long run doing that.
That fund and all others like it are way down in the last several years despite making whatever they made this month. I find it laughable that the media is so irresponsible to parade this guy out for making a billion dollars without telling people how many billions were lost bleeding money month after month waiting for the black swan event to happen.
Any traders who have any experience at all or any backtesting what so ever already know there is no point trying to profit from tail risk. You lose way more money in the long run hedging it out completely than you do just making nice little profits month after month and occasionally taking a small hit when shit hits the fan. When the VIX goes from 13 to 53 in a week you're supposed to lose a bit of money, that's trading.
You should hedge enough so you can make a nice safe orderly stop-loss out when black swan events happen. Don't hedge so much that you profit from them, because you will definitely bleed more money in the long run doing that.
This is not true. The fund was up huge in 2008, 2011 and this year. They had modest single digit losses 2012 to 2014. They actually sell a lot of premium. And they don't just trade tails in the index. They make money on large moves in rates, currencies, indies, metals, etc. And the purpose of the fund is not to be a standalone investment but rather a means for investors to stay "long" and even have more long exposure then they normally would have otherwise since they own the insurance. You obviously neglected to watch the videos. That's your prerogative.
And if you choose to be impressed by pathetic funds that can't even beat a low cost index fund let alone anyone who knows what they are doing that is your prerogative.
Has nothing to do with being impressed. You just need to get your facts straight.
i was long dotm spx puts for .20, sold them for 8.00, that's how...
Apparently there's no market environment they can lose money is there. What a bunch of baloney.They actually sell a lot of premium. And they don't just trade tails in the index. They make money on large moves in rates, currencies, indies, metals, etc.
Apparently there's no market environment they can lose money is there. What a bunch of baloney.
Who said anything about not losing money? Not the sharpest tool in the shed are you?