Hedging

(Originally June 18th 2009)

There is a Chinese proverb that says “The palest ink is better than the best memory”.It is for moments like this where I believe this blog will be extremely useful in the future. Right now I feel like Pearl in Andrew Lloyd Webber’s musical Starlight express. The song “Make up my mind, make up my heart” is how I feel right now. I am convinced that Distressed is the place to be. But which investment is the right one? Finally I guess the decision will boil down to which fund provides the best accessibility to the managers and how easy will it be to get out of the investment if things take a turn for the worst. Even with that criterion there is no clear cut winner. There is always the option to get into more than one to hedge the bets.

I can’t help but notice that my philosophy and approach is affecting my personal life. Hedging things in my life, measuring the risk reward, wondering whether I should consider the overall volatility when making a decision or consider only the downside potential. Sometimes things are becoming so bad that I apply the same principles to make money in World of Warcraft. I am supposed to be using that to relax from work not be reminded of it. Switching off is extremely important for me. I hope I can continue to do that successfully.

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