I know there has been a lot of talk on this thread
about hedging via shorting QQQ, etc. I hope there aren't
too many in this position ..
I2, shorting QQQ is an excellent hedge for volatile NASDAQ
stocks/funds IMO. USPIX, which is neg 2 times QQQ, is even
better. A little dab'll do ya!!
Let's say you own PBHEX, MNNCX, RSEGX & VWEGX. These are
high octane Tech/Net funds that were up 175% to 275% last
year. They probably won't perform as well every year, but
you don't want to give up all of last years gains in any
future bear market. If your indicators - whatever they may
be - are telling you that the market is in a high risk
state, you may want to hedge them. Their beta'a are:
PBHEX 1.62
MNNCX 1.87
RSEGX 1.56
VWEGX 1.41
If you had say $10K in each, you could do a 50% hedge by
buying $11K worth of USPIX, which has a beta of -2.9
Results for February:
USPIX -23% ($2,533)
PBHEX 15% $1,538
MNNCX 13% $1,344
RSEGX 18% $1,794
VWEGX 11% $1,083
total 6% $3,225
I'll be happy to publish the downside results, if and
when the high techs get pounded.
FWIW, Dick |
