StratiFi Speaks at FA Mag's Inside Alts Conference
On October 24, 2017 Jaipal K. Tuttle, PhD, StratiFi’s Head of Volatility and Tail Risk was a featured panelist at FA Magazine's Inside Alternatives Conference. Jaipal participated in the panel entitled "Tail Risk, Black Swans, and Hedging for Uncertainty", led by Christopher Robbins (@NJChrisRobbins), a writer for FA Magazine.
During the panel, Jaipal discussed what constitutes a tail event and the need for omnipresent protection in case a tail event occurs. It is his conjecture that no one sees a true tail event coming. Jaipal defines a tail event as an “unknown unknown," where the investor does not see the source of the event and is unsure of the resultant effect on his or her portfolio. Examples he brought up included: waking up to a drastically devalued dollar, the disruption of standard communication methods (i.e. the internet), or, perhaps, any unintended consequences of blockchain technology. It is precisely the impossibility to predict the occurrence, or the potential effect, that warrants the need for constant protection. To further amplify the need for a hedge, Jaipal pointed to the unprecedented state of the markets today, and how this set of conditions pushes possibility further into the unknown.
When it comes to protection, the main point Jaipal expressed was that investors should focus on doing what’s necessary to stay in the game after the event (when, historically, the biggest gains are made) and work to do so at the lowest cost possible.
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