Monthly Archives: December 2008

The Golden Anchor

The Golden Anchor

The golden anchor is a way to remove virtually all counterparty risk while still staying reasonably well diversified. Buy a large chunk of gold, place it in a secure location and short most of this position on paper. Then go out and use the money from the shorting to buy a diversified portfolio as you… Continue reading »

The (Mis)Behavior of Markets

The global financial system is a house built on sand. This is the main argument that the highly acclaimed mathematician Benoit Mandelbrot makes in his 2004 book “The Misbehavior of Markets”. And here we are, at the dusk of 2008, having seen global markets plummet an average 50% the last few months. Could he be… Continue reading »