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There was a similar phenomenon a decade or so ago when the Swiss franc was revalued. Tons of hedge funds had borrowed against it (the carry trade,) and when it soared the funds that had levered the franc were wiped out. One floor below my office in Coconut Grove, a money manager who had been very successful over many years in investing in emerging markets was wiped out overnight even though on the face of it you'd think, "What does the Swiss franc have to do with the Mexican or Thai stock markets?" I think his firm had close to $10billion in assets under management.

The lesson I took from that is that it's often the things we DON'T worry about, whether in investing or in life, that clobber us.

1 posted on 08/08/2024 6:08:34 AM PDT by Miami Rebel
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To: Miami Rebel
More likely the things we refuse to think about.


2 posted on 08/08/2024 6:12:10 AM PDT by xoxox
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To: Miami Rebel

I’m moderately literate in stocks, but I had to look up carry trade.

“A carry trade is a trading strategy where an investor borrows at a low-interest rate and reinvests in an asset or currency with a higher rate of return1. Essentially, it involves profiting from the interest rate differential between two currencies or financial products. For example, someone might borrow in a low-interest rate currency and invest in assets denominated in a higher-interest rate currency. However, carry trades come with risks, including currency fluctuations and potential losses1. It’s a strategy best suited for sophisticated investors with a high risk tolerance1. 🌟”


3 posted on 08/08/2024 6:19:07 AM PDT by Gen.Blather (Wait! I said that out loud? )
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To: Miami Rebel

I got out of the stock market just before the dot com bust. Ever since, I just see it as gambling. People invest way too much money in companies and cryptocurrency that don’t have any actual intrinsic value “right now”. It’s gambling.

Sure, stocks have always been a form of “gambling”, but there were fundamentals you could watch and drastically remove risk and, of course, to some degree, rewards. But now it’s pretty much just gambling.


7 posted on 08/08/2024 6:23:29 AM PDT by cuban leaf (2024 is going to be one for the history books, like 1939. And 2025 will be more so, like 1940-1945.)
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To: Miami Rebel

Right, it isn’t the road less traveled, it is the road you never saw that gives problems and regrets.


14 posted on 08/08/2024 7:09:22 AM PDT by Sequoyah101 (More important than why there was nobody protecting the AGR roof, how did Crooks know that?)
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