Macro thread - Why is the market up/down?

[Castanza]

6 minutes ago, sleepydragon said:

 

I feel like I need to put on some hedges in this market... Marco, do you have any suggestions for shorting? preferable ETFs?

 

Sometimes it's better to just do nothing.

Edited March 6 by Castanza

[Marco Van Basten]

34 minutes ago, sleepydragon said:

 

I feel like I need to put on some hedges in this market... Marco, do you have any suggestions for shorting? preferable ETFs?

No good suggestions sadly, shorting I am not good at, and my portfolio has too much basis risk.  

What risks are you worried about?

a) put spread on SPY works, if you are hedging due to Iran war, then perhaps put spread on airlines or hotels?  Or call spread on Shell plc?  

b) Somebody has been pitching EQ resources in Australia - the tungsten miner as a great long since the material is used in weapons, and this Co is supposedly one of the few Western producers, so that could be an interesting hedge on the long side.  

c) Puts on credit or banks could be interesting - puts on Blue Owl or Blackstone, probably not Apollo (too well run), puts on JP Morgan - 3x book value?  If you can buy CDS, which I cannot, that might be an interest place to fish?  

d) if you fear economic downturn due to Iran war or AI or both, then I would guess that puts on banking and private equity ETFs would be interesting.  Sorry, cannot give you a good answer.  

 

I don't have any hedges on at the moment.  You know my portfolio - sand/gravel/cement + Tel Aviv Stock Exchange + GE/Safran/Airbus + JOE, Fairfax, MCO/SPGI, NEN, Visa.  

[sleepydragon]

30 minutes ago, Marco Van Basten said:

No good suggestions sadly, shorting I am not good at, and my portfolio has too much basis risk.  

What risks are you worried about?

a) put spread on SPY works, if you are hedging due to Iran war, then perhaps put spread on airlines or hotels?  Or call spread on Shell plc?  

b) Somebody has been pitching EQ resources in Australia - the tungsten miner as a great long since the material is used in weapons, and this Co is supposedly one of the few Western producers, so that could be an interesting hedge on the long side.  

c) Puts on credit or banks could be interesting - puts on Blue Owl or Blackstone, probably not Apollo (too well run), puts on JP Morgan - 3x book value?  If you can buy CDS, which I cannot, that might be an interest place to fish?  

d) if you fear economic downturn due to Iran war or AI or both, then I would guess that puts on banking and private equity ETFs would be interesting.  Sorry, cannot give you a good answer.  

 

I don't have any hedges on at the moment.  You know my portfolio - sand/gravel/cement + Tel Aviv Stock Exchange + GE/Safran/Airbus + JOE, Fairfax, MCO/SPGI, NEN, Visa.  

Thanks Marco. your portfolio is pretty defensive.

I am leveraged long, so that's why I am nervous. And it's hard to cut back on the leverage cuz I like all these stocks I have. 

private equity short is a good idea. it's ultra competitive industry. was chatting with someone in this industry and he said any family business they want to buy have 5-6 bidders. but they are long term holders though and usually buy defensive businesses.  hotels and airlines are good shorts too, I agree. 

[Marco Van Basten]

3 hours ago, sleepydragon said:

Thanks Marco. your portfolio is pretty defensive.

I am leveraged long, so that's why I am nervous. And it's hard to cut back on the leverage cuz I like all these stocks I have. 

private equity short is a good idea. it's ultra competitive industry. was chatting with someone in this industry and he said any family business they want to buy have 5-6 bidders. but they are long term holders though and usually buy defensive businesses.  hotels and airlines are good shorts too, I agree. 

Can you use options rather than borrow?  I am usually 110-130% net long, but I usually I accomplish that with options - LEAPs ideally.  That way, if I am wrong or market moves against me, I avoid the risk of a margin call.  Keep in mind, unless you own an insanely diversified portfolio, most likely there is basis risk versus whatever index you choose to hedge against.  Hell, even Coca Cola and Pepsi have very different businesses...