Call for financial advice...greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I'm looking for a managed account that has the following requirements:
1. A history (mandate even) of being heavily weighted on the short side.
2. A track record that will allow me to assess how well they have survived under the adverse conditions of the bull market (adverse for short interest that is).
3. Minimum or absence of heavy leveraging techniques.
4. Lower entry levels than many of the hedge funds require
I would really like to find a person who can reproducibly attenuate the losses that would occur from shorting the market as a whole during the upticks.
-- Dave Cornell (email@example.com), May 11, 1999
Sounds like you are smart enough to do it yourself
-- Johnny (firstname.lastname@example.org), May 11, 1999.
Hey, give me some of whatever Dave's having.....Besides all that, remember Dave it's all soon to be a lot of worthless paper.
-- saveamerica (email@example.com), May 11, 1999.
There are a few "bear" mutual funds out there that serve as a way to play the downside for the average joe and are much less risky than outright put purchases or shorting stock (with, of course, potentially less reward).
I've been positioning in a mutual fund that mostly sells short and buys put options but also has some defensive longs and cash - BEARX - run by David Tice. I like to think of it as a put option that never (hopefully!) expires. It had a very nice run last fall, with about 4:1 leverage vis-a-vis the S&P selloff. Since about last January, he seems to be hedged somewhat flat, waiting for the initial break in the market. If you check the performance chart, it looks like he's getting whipsawed a bit every now and then, but once the cat's out of the bag for good, I think he'll lift the hedge and run mostly unhedged to the downside, taking profits and using them to add new positions during the unwind.
Another (very conservative) strategy would be to take the interest earned from 90 t-bills to purchase LEAP puts on pricey stocks or high-flying indexes. That way, your principal is safe (well, safe depending on what happens to the banks and brokerages due to Y2k), and your only cost would be loss of interest on the t-bills, yet your profits could be quite nice.
-- Nathan (firstname.lastname@example.org), May 11, 1999.
I think the free markets ain't free with this administration. They've got something called the Plunge Protection Team, to prop the stock market up. As a result, while in a free market, stocks would fall if businesses fail, something else might happen here. For instance they could prop up the market at current levels and cause inflation. They could penalize "short sellers". WJC could issue an Executive Order converting existing short term T-bills to long term. I think this situation calls for diversity in hedging.
Personally, I'm: 40% money market 15% gold mining stock 15% Openheimer Real Asset (commodity futures and mortages) 10% BEARX 20% stock I can't sell till 55 Bought a few gold coins
I looked into Y2K funds, but I couldn't tell if the management understood what it was doing.
Sure like to hear some other alternatives.
-- noel (email@example.com), May 12, 1999.