Tex S. Hedge market crash portfolio

Discussion in 'Stocks' started by Tex S. Hedge, Jan 16, 2008.

  1. Howdy folks, it looks the January sales are starting! Time to get ourselves a shopping list of good old stocks to buy on the cheap in the forthcoming days and weeks.

    So, here we go:


    Now every good portfolio can benefit from a healthy dose of risk, so lets throw in some stocks from the beaten up financials and other hard-hit sectors, maybe even a real-estate play! As an added bonus, when you tell people you are buying this lot, they will think you are stark raving mad. Don't forget to cackle loudly and have that wild look in your eyes, to look the part!


    Now any self-respecting gambl^H^H^H investor gotta have some exotic beauties from abroad hidden away in the bottom reaches of his portfolio. Just don't tell the wife, ok?

    Yahoo Japan
    Urban Corporation

    Then, we oughta use some options to juice our returns. Since the market will be going higher, we gonna be sellin some puts - lets say the at the money December 2008 puts. And since the market is gonna rally within a few weeks at most, we wanna be picking up some Feb 2008 calls outta the money. Maybe 5% higher strike than the price at the time of the crash. Now we can do some nifty portfolio management here - use the premiums from the Dec 2008 puts to fund the purchase of the Feb calls! Who said there's no free lunch in he markets, eh?

    Now onto the most important part of any investment decision - risk-maximisation. After all, there's no point buying the bottom if you only got a few hundred shares, is there? My philosophy is simple - if you ain't on full margin, then you ain't got any conviction in the trade. So, I expect y'all to be going 200% long, you hear?

    Just remember - wait for the tabloids to put "Stock Market Crashes" as their lead story for the day. By the time the selloff becomes news at the National Enquirer, you just know it's at the bottom! But I expect all of you to be outta stocks until our friends in the media let us know it's time to buy, you got that? Sit on your hands and wait. So once you see this, just go 200% long as soon as the market opens. Then just sit back and enjoy the ride!

    P.S. If any hedge funds or pension fund trustees are looking for a risk manager and/or trader, I'm your man. My areas of expertise are hedging (Texas variety), selling puts during stock market panics, and margin trading. PM me for further info.
  2. See folks, what did I tell y'all? We got the VIX spikin up, people puking out, and stocks takin one helluva dump. So here's a Tex S. Hedge tip you can take to the bank - we bottom Friday on the close, or Tuesday in the first few hours. I can't time it any better than that, but I reckon it outta be enough to be goin on for any fella with half a brain.

    This is what Tex is plannin: get 50% long in the last 10 mins on Friday. Then Tuesday in pre-trading, get long another 50% - this is just in case them folks up at the Fed got some nefarious rate-cuttin scheme up their sleeves. On the open, people probably gonna be doin their panic selling, getting margin calls and pukin out. Grab yourself some plastic gloves and a big bucket, and mop up them margin calls like yesterday's pig swill. I'll be getting 200% long within 30 mins of the Tuesday open, you got that?

    Then just watch - if the market starts a-rallying, which I'm bankin on, then you gotta grab your balls and administer the coup de grace...400% long full intraday margin, that's the way to do it! Hell, we all gonna be worm food in a few decades anyway, might as well live a little, doncha think? Then ditch your intraday stocks into the close, and stay 200% long. I guarantee you'll have one hell of a Texas party if you just hop along for the ride!