(This is out of my “I no longer play World of Warcraft so I have one small investing account where I do stupid things like trading so that I do not feel temptation to do more stupid things with my actual money” weird hobby.)
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I am a retail investor and retail investors pervasively overestimate whether they in fact have an edge on the market. If they don’t, they should just buy cheap beta. I also know that more brain cycles than I’d devote to a weird hobby would be wasted cycles (for me).
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Like even if I have the possibility of creating alpha by thinking hard, the amount generated times the capital I would feel comfortable risking pales in comparison to wealth/value created by repurposing same cycles for (at current moment) my day job, (generally) a business, etc.
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You sell short rather than buying a put? I'd be too worried about the "market can stay irrational longer than you can stay solvent" maxim.
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I bought puts (and sold call ladders); didn’t want to have to describe all the mechanics for the disclaimer.
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What is
$Xk? -
Single digit thousand dollars max notional size of position.
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No magic required!
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It all goes back to incentives. Incentives to find real dirt for a short play are huge. Journalists though will optimize for what their readers want to read.
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“HODL to zero.”
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