Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Constructing A Hedged Portfolio Around A Priceline Position

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In a post last week (“Priceline’s Wild Ride”), Tim noted that Priceline (PCLN) was up 7400% since its 2003 nadir. In this post, I’ll go over how an investor can build a hedged portfolio around a position in Priceline, and show an example of one. Let’s quickly review some of the basics of hedged portfolios, and then see how we can go about creating one around a position for an investor with $1,000,000 to invest, who wants to maximize his potential return while limiting his downside risk to a drawdown of no more than 17% in a worst-case scenario. (more…)