Thursday, April 26, 2012

"JEFF GUNDLACH: If I Were A Young Hedge Fund Manager, This Is The Insane Contrarian Trade I Would Make Right Now"

"If I were one of the nutty hedge fund guys, I would go short Apple, long natural gas, and leverage it 100x."

3 comments:

Stagflationary Mark said...

CP,

"If I were one of the nutty hedge fund guys, I would go short Apple, long natural gas, and leverage it 100x."

I've been thinking about this for a few days. I think I can improve upon it though.

1. Short Apple, go long natural gas, leverage it 100x.
2. Find a similarly nutty hedge fund guy.
3. Have him short natural gas, go long Apple, and leverage it 100 times.
4. Agree to split the profits for the strategy that worked (20% fees?).
5. Write a public apology letter for the strategy that didn't, especially if the Fed has to bail out the losing strategy like it did for Long-Term Capital Management.

I don't think that this plan would make as much money, but there's something to be said for sure things. It's like a hedge of heavy leveraged hedges. The goal is to be a winner no matter what happens.

Let's not stop there though. Let's make this plan its own hedge fund and leverage it 100x! Why not? No matter what happens we can't lose!

And we wonder why there is so much leverage in the system, lol. Sigh.

Stagflationary Mark said...

I want to be clear here. Only the management fees would be split.

Here's one way to do it safely. The two hedge fund managers should be married to each other.

One comes home from work one day with horrible news. "I lost all! I've been fired!! It was so embarrassing! They escorted me from the building. They told me that no hedge fund manager had ever lost so much money!"

The other says, "It's okay dear. I figure you had a bad day based on how great mine was. I took the liberty of buying you your own island in the South Pacific."

Hahaha! Sigh.

CP said...

Wow! Hilarious yet plausible.