Tail Risk Hedging | Nassim Taleb, The Fed, Macro 'Investing', Faith Based Alpha & Antifragility
Pirates of Finance
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The Inverse Problem With Tail Hedging
The ability to monetize these before of all mean reverts is Incredibly delicate and precise. That's when you need the most you need that pop to cover your equity beta. If they don't monetize it correctly You're not covering that equity beta, but then more importantly if they do monetize it perfectly And there's a second leg down you have no protection for that second leg down. The inverse problem again is if these events happen once every decade or whatever.
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