Hacker News Reader

One of my good friends follows a strategy like this by simply buying puts against SPX. He is very bearish on the market in general, and has missed out on a lot of growth in the last decade, but in his case it did “finally pay off” recently.

As with any other strategy, though, it’s not really valid to compare just the recent months, you’d have to evaluate his total return over say the last ten years, and I don’t know how that stacks up.

I think it's very difficult. You're looking at losing significant money 9 years out of 10. (Or 20 years out of 20, who knows? It's black swans baby.) So you can only do this with a very small amount of money. How much time can you afford to spend managing say 3% of your total liquid assets?

VXTH is an index which runs a tail risk strategy: http://www.cboe.com/products/vix-index-volatility/vix-relate...

It holds the S&P500 and buys monthly call options on VIX.

Even the super rich get duped into paying for dumb strategies.