shan Posted September 4, 2014 Share Posted September 4, 2014 This year, Prem Watsa said that Fairfax is 100% hedged and that he's afraid of a repeat of 1930s style recession. His main point was that 1929 stock market crash was lot smaller than the bigger drop which came in 1933-34. So he's sticking to hedging, even if it leads to big losses. His words - "we'll be wrong a couple of times, but when we're right, it will make up for it". I am convinced that the market is overvalued because: 1. I cannot find many undervalued opportunities. 2. Prem Watsa said in 2014 Annual report and shareholders meeting that more things can go wrong than right. For example, the fed induced low interest rate is pushing all asset prices high, China has massive housing bubble, Europe in going into a triple dip recession (atleast Italy) etc. So I wanted to ask what methods are the members of this forum using for hedging. Some of my ideas have been: 1. Basket of shorts for tech overvalued stocks (I am from tech and based in Silicon valley, and I think its crazy overvalued) 2. SPY puts 3. What is Fairfax using for hedges? 4. Stay in cash (as dry gun powder?) I'd like if we could discuss more ideas and their pros and cons. Thanks, Shan Link to comment Share on other sites More sharing options...
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!Register a new account
Already have an account? Sign in here.Sign In Now