http://www.scribd.com/doc/58839921/Tail-Risk-Protection-Montier
http://www.zerohedge.com/article/fat-tails-insurance-moot
Probably the best most recent example is our overview of the 5 black swans that keep Dylan Grice up at night, and the way to hedge against them (incidentally, these were Long-term deflation, a Chinese Hard Landing, Asset Bubbles, Hyperinflation, and of course, a Bond Market Blow-up).
If the price of tail risk insurance is driven up too high, it simply won’t benefit its purchasers."
His solution for the best tail hedge: cash.
"In many situations, cash is a severely underappreciated tail risk hedge."
1. Cash
This is perhaps the oldest, easiest, and most underrated source of tail risk protection. If one is worried about systemic illiquidity events or drawdown risks, then what better way to help than keeping some dry powder in the form of cash – the most liquid of all assets. (There is much more on the joy of cash to come shortly.)
http://www.zerohedge.com/article/fat-tails-insurance-moot
Probably the best most recent example is our overview of the 5 black swans that keep Dylan Grice up at night, and the way to hedge against them (incidentally, these were Long-term deflation, a Chinese Hard Landing, Asset Bubbles, Hyperinflation, and of course, a Bond Market Blow-up).
If the price of tail risk insurance is driven up too high, it simply won’t benefit its purchasers."
His solution for the best tail hedge: cash.
"In many situations, cash is a severely underappreciated tail risk hedge."
1. Cash
This is perhaps the oldest, easiest, and most underrated source of tail risk protection. If one is worried about systemic illiquidity events or drawdown risks, then what better way to help than keeping some dry powder in the form of cash – the most liquid of all assets. (There is much more on the joy of cash to come shortly.)
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