How Investors Can Still Get Ready For The Greek Election
By Jeff Miller: Whenever there is a big "binary" event, preparation is vital. This happens in two different ways:
- Advance positioning. These are specific trades to be done before the event occurs -- deciding on asset allocation, sector allocation, and possibly protection against unlikely (but possible) outcomes.
- Tactical preparation. The analysis must be done in advance, but the trades will occur after an initial outcome is announced.
The idea behind advance positioning is that you must not wait! Whatever happens will move the market so much that you cannot possibly adjust. This is often true in binary events like FDA decisions about new drugs, but it is not very true of events related to global macro.On Wednesday night I listened (oh so briefly) with astonishment to the assembled punditry explaining why it was foolish to be "going long into the weekend" where the Greeks might exit the Euro. The question we raisedComplete Story »