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Investment Strategies

Herky Jerky Markets Mean the Fed Put is Back
FOMC Updates

Herky Jerky Markets Mean the Fed Put is Back

Recent market volatility spiked due to a soft labor report and geopolitical risks, with the VIX experiencing one of its largest spikes ever. The rapid recovery suggests that immediate panic may be over, and the Fed’s flexibility to cut rates could stabilize the market further. However, tensions in the Middle East could reignite volatility. Investors should stay cautious and use strategies to manage risk while capitalizing on more stable volatility levels.

Three Reasons Why Summer Volatility Will Likely Retreat and a Trade to Play It
Black Swan Party

Three Reasons Why Summer Volatility Will Likely Retreat and a Trade to Play It

Myron Scholes noted that risk management often fails during systemic events. Recently, I accurately predicted periods of low volatility using my VIX theory, yielding significant returns. Despite recent market fears, I believe the true mean of the VIX is lower than current levels. The economy’s resilience, potential Fed cuts, and market improvements support this outlook. Shorting volatility with strategic options can capitalize on the current market environment.

How Does the Presidential Election Affect Market Volatility?
Black Swan Party

How Does the Presidential Election Affect Market Volatility?

“Quite a few ‘old adages’ regarding markets and politics are plainly false,” says Thomas Jefferson. Contrary to belief, markets perform better under Democratic presidents. Misunderstandings about market volatility can affect strategies. Analyzing election year patterns reveals opportunities, suggesting that shorting October volatility might be profitable despite uncertainty. Understanding politics and markets is key to effective investing.

Shake Your Tail (Risk) Feather
Black Swan Party

Shake Your Tail (Risk) Feather

“Foreign policy involves imperfect decisions and shifting dynamics,” says Chuck Hagel. Using math, like power laws, helps us understand geopolitical risks. For example, the more casualties in a conflict, the sooner it might end. This insight can guide investors, as overestimating geopolitical risks often leads to missed opportunities. By understanding and leveraging these probabilities, investors can make more informed decisions and potentially capitalize on market overreactions.

Sangfroid (Don’t Assess Risk Like a Fish)
Black Swan Party

Sangfroid (Don’t Assess Risk Like a Fish)

“Dark clouds are gathering,” warns Barton Biggs, and the market’s misconceptions about volatility could prove costly. Welcome to the Black Swan Party, your bi- weekly dive into the unthinkable and the highly unlikely. As the Ukrainian offensive ramps up and geopolitical tensions rise, the market remains eerily calm. Understanding and navigating financial volatility is crucial for managing money effectively. Volatility isn’t just a threat; it’s an opportunity for discerning investors. This column explores...

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