The Tail-Risk Strategy That Helps This Quant Sleep Easy at Night
The Tail-Risk Strategy That Helps This Quant Sleep Easy at Night
(Bloomberg) --
This year’s volatility in markets has highlighted how investors can protect their portfolios with tail-risk hedging strategies. Meb Faber, co-founder and chief investment officer of Cambria Investment Management, joins this week to discuss the thinking behind his firm’s tail-risk ETF (ticker: TAIL), and offer his thoughts on the state of markets.
Some highlights of the conversation:
“I’m a quant. And if you think about markets and optimizations and the ideal portfolio, it’s so easy to do on paper. But when you play it out in real life, the very real pain of losing money, waking up every day to markets being up-down limit, watching overnight futures. That’s not something most of us want to spend any time doing. And so the idea of adding something like TAIL is almost more from the behavioral or psychological standpoint.”
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