Category: Asymmetric Payoff
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Asymmetric Risk/Reward is More Than Just Buying Undervalued Stocks
Many investors believe they are pursuing asymmetric opportunities when they buy stocks they think are undervalued or have more upside than downside. But true asymmetry isn’t just about perceived valuation gaps—it’s about structuring risk in… Read More
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Bridgewater Co-CIO: The Market is Very Asymmetric Right Now
Bridgewater Associates, Inc.Co-CIO Karen Karniol-Tambour joins Positive Sum CEO Patrick O’Shaughnessy at the 2023 Sohn Investment Conference. Below is the interview she says the market is very asymmetric right now because of the asymmetry between… Read More
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Fundamental Valuation: Is the Stock Market Cheap or Expensive?
For me, and everyone else even if they don’t realize it, the price trend is the final arbiter. For more than two decades, I’ve focused my efforts on developing systems to identify trends early in… Read More
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Stock Market Ahead of the Fed, and What’s Likely to Happen Next
In the last observation, I shared “Implied volatility is indicating another possible volatility expansion” I pointed out that Implied volatility is indicating another possible volatility expansion. The Volatility Index VIX was at 21, implying a range… Read More
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The Smart Money Method: How to pick stocks like a hedge fund pro – on Asymmetric Payoffs
One of my recent reads is The Smart Money Method: How to pick stocks like a hedge fund pro (November 24, 2020) by Stephen Clapham. Naturally, when he mentioned “Asymmetric Pay-offs” I have to share the… Read More
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Historic day for the stock market
Today was just a reversal of Friday’s late-day surge. The stock market is even more washed out. With the Federal Reserve lowering interest rates and buying back bonds, the long term US Treasury Index reversed… Read More
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Profiting from the Madness of Crowds
If we want to profit from the madness of crowds, we necessarily need to believe and do different things than the crowd at the extremes. You may have heard the stock market was down a… Read More
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I’ve been here before; stocks are entering the zone
Based on breadth and short term momentum indicators, the U.S. stock market is entering what I consider to be the green zone. The green zone is the lower risk area, which is the opposite of… Read More
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Volatility is expanding, a little
To no surprise, the CBOE S&P 500 Volatility Index that represents the market’s expectation of 30-day forward-looking volatility, is trending up. So far, it isn’t much of a volatility expansion, but it’s elevated somewhat higher… Read More
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Stock market volatility, participation in the trend, REITs, and MLPs
The U.S. stock market as measured by the S&P 500 index reached reaches a new high, so volatility remains subdued. After prices trend up, investors become increasingly more confident and confident is reflected by a… Read More