There's Still Time to Hedge Tail Risk -- At Least for Stocks: Kris Sidial

The Contrarian Investor Podcast

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Kris Sidial of The Ambrus Group joins the podcast to discuss tail-risk hedging: how it works, why it's important, and how investors can still take advantage of volatility mispricings to protect themselves against further downside -- at least in stocks.

Content Highlights

• What is tail risk hedging? (3:19);
• Traditional hedges haven't worked, starting with the 60:40 approach. How might investors hedge stock and bond exposure? (6:15);
• There are numerous options for investors to protect against downturns. But it's not always as easy as buying put contracts on indexes (8:24);
• Variance swaps, one way to compound returns on movements in volatility (10:25);
• Thoughts on UK pensions and what might have caused issues in that segment of the market (15:27);
• What investors are doing in this environment in terms of tail-risk hedging -- there are still opportunities to hedge (20:02);
• Background on the guest (30:08);
• Discussion of systemic risk as a result of the layers of options trades and counterparties: "There is a systemic hazard taking place right now in the derivatives market" (39:32);
• Speaking of risk, what about the regulatory environment? Are regulators asleep at the switch? Reasons to believe Dodd-Frank is perhaps not as effective as people think.. (43:37)
• Thoughts on cryptocurrencies (50:01).

More About Kris Sidial

• Website: Ambrus.Capital;
• Twitter: @KSidiii;;
• White paper mentioned in the episode.