Hello fellow hive members 🐝, @Nick Correa and I are back at it again, probably with the best edition of "The Breakdown" we've ever done. We explore the treasure trove that is @Jason Buck's interview with Meb Faber of Cambria Investments, and define what "tail risk" is, its uses, and how various assets such as bonds, gold, real estate, and foreign stocks perform during immense drawdowns of the S&P 500. We explore Meb's Tail Risk ETF ($TAIL) and break down how its various holdings help achieve its mandate of negative correlation with the S&P 500 with not too much "bleed" during normal times.
We had fun with this one and hope you do too! (charts below)
Link to the original interview:
@Jeremiah S @John Ahearn @Jaymes Rosenthal @Moritz Heiden @Matt Daniell @Craig P @Bradley Snyder @Sam Colt @Theodore Boydston @thomas cullis @Aneil Pokharel @Dennis Jarvis @Konrad Zawadzki @Joseph J @James J P Mulholland @Xavier Mejido @Master Of Money @Tom Catternan @Kewal Mistry @Jehan Hiramanek @Sean Morgan @Sam Mitchell @John Ahearn @Dan Little @Matthew Lansing @Matthew Lansing @Adam Toth-Fejel @Theodore Freysen @Seahyung Park @Sean Morgan @Bryce G @Dean W @ALLEN AZAR @Oliver Anderson @Andreas Niederberger @Cristofer Atiencia @Lemony Snicket @Brian Caputo @Brian Lee @brian barry @bill foord @Georgii Verbitskii @Max Wiethe @Stefan Clulow @John Fadool @Collin Velarde @James Clark @Daniel Olarte @Paul LaRue @Chris Clark @Roo Larson @Lars Andersson @Matthew Larkin @Larry Lawhorn @Larry Stein @larry cooper @Christian Petersen @Philip Peterkin @David Douglas @David Lack @David Sharp @David Douglas @Marc Liron @Ted Boydston
Performance of various assets during 10 worst months for the S&P 500 (source:https://www.cambriainvestments.com/wp-content/uploads/2017/10/TAIL-Final-10.03.17-B.pdf, page 11):
$TAIL performance (note how it shoots up during times of stress for the S&P 500, such as March 2020):
A "bonus" chart about how buying at all-time highs is not actually the worst strategy (source: https://mebfaber.com/2019/11/04/is-buying-stocks-at-an-all-time-high-a-good-idea/):