Subject: Re: BAC
I have tried to expand my knowledge of hedging tail risk in recent years. I found that it’s really hard. I tried a couple of things on a very limited basis that were new to me.

Buying a VIX futures fund. Awful idea. If you hold it for any length of time, you will loose money due to the futures contracts having to be renewed burning your principal on premiums. Would only work if you knew a major volatility event was about to happen. But you never do. Strong avoid is my opinion.

Long dated out of the money put options, on the most ridiculously low quality, high priced securities. The premiums tend to be expensive but they do provide enough time for rationally to set in e.g. 2 years. The returns are big if you are right. A small amount in this type of stuff is a useful portfolio hedge.

Best strategies I have heard are the simple ideas:

A little bit of diversification (property, Berkshire, global equities).

Avoid debt.

Buffett’s idea, of sharpening the sword, so you can earn a living in most circumstances, is powerful and the best multigenerational advice I know of. Following from that is earn as much as possible and live below your means. But there are plenty of life’s pleasure worth paying for, so don’t over dose on that one.

Hold some cash to have optionally in case things get cheap.

Gold and crypto might make sense to some people but I just couldn’t bring myself to invest in gold over productive businesses. Even if the market price might decline over the medium term. Buffett’s arguments are too compelling over the extremely long term.

As for crypto, as long as it’s useful to criminals and terrorists; is not a medium of exchange and undermines the institutions that underpin democracy, I will be avoiding that.

Avoid fast women and slow horses.

Interested in other ways of avoiding going to zero?