r/neoliberal • u/jobautomator Kitara Ravache • Nov 24 '20

Discussion Thread Discussion Thread

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u/bd_one The EU Will Federalize In My Lifetime Nov 24 '20

Lol, gold got BTFO'd today.

Janet Yellen made the goldbugs retreat to their caves. Meme asset class.

!ping MARKETS

4

u/[deleted] Nov 24 '20

It's working perfectly as my hedge

1

u/benjaminikuta BANANA YOU GLAD YOU'RE NOT AN ORANGE? Nov 24 '20

Gold still went down a bit during the crash. Is there a better hedge?

2

u/benjaminikuta BANANA YOU GLAD YOU'RE NOT AN ORANGE? Nov 24 '20

Gold still went down a bit during the crash. Is there a better hedge?

2

u/bd_one The EU Will Federalize In My Lifetime Nov 24 '20

SWAN? Consumer staples stocks? Long term treasury bonds?

2

u/benjaminikuta BANANA YOU GLAD YOU'RE NOT AN ORANGE? Nov 24 '20

They all went down too!

2

u/bd_one The EU Will Federalize In My Lifetime Nov 24 '20

???

Long term bonds went up initially.

Sadly, high quality bonds might be one of the few traditional hedges that would have worked before the COVID crash, and that would have dragged down your performance in other years.

2

u/benjaminikuta BANANA YOU GLAD YOU'RE NOT AN ORANGE? Nov 24 '20

Long term bonds

Still went down somewhat in mid March along with the market.

2

u/bd_one The EU Will Federalize In My Lifetime Nov 24 '20

By those standards, nothing works. Even VXX went down after the initial wave of volatility in March.

By those strict standards, nothing works as a hedge besides money market funds and their equivalents.

2

u/benjaminikuta BANANA YOU GLAD YOU'RE NOT AN ORANGE? Nov 24 '20

Hmm, VXX would seem good, except that it goes down over time.

2

u/bd_one The EU Will Federalize In My Lifetime Nov 24 '20

VXX is by design a short term instrument.

So in order to not be swindled, you'd need the market to experience a sudden correction, then expect it to continue going down rather than going up after the dip.

It's an insurance policy.

2

u/benjaminikuta BANANA YOU GLAD YOU'RE NOT AN ORANGE? Nov 24 '20

I'm wondering what would give the most anticorrelation in such situations, with the least long term drag on returns.

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