
Better Returns Through Hedging

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I have, as some of you know, been beating myself up endlessly for what it surely one of my biggest screw-ups of the entire year, which was dumping my IYR puts (now up 250% from the dumpage). I intend to heal my soul with another trade which, as of now, looks idiotic, but I intend to not wimp out on. Specifically, Brazil (symbol EWZ). For reasons quite beyond me, this has been strong lately, and we got quite close to this gap.

Let me share a personal experience and hope you and I can both learn something from it.
I’m not sure precisely when it began, but this premium post from March 7th is a good place to start. In the post, I make it abundantly clear that the real estate fund IYR is one of my favorite analogs of all time (using such words as “crazy about this analog” and “just ga-ga”). I’m certain this wasn’t my first post about it, but it is at least one where I put a stake very firmly in the ground that I am bonkers about the IYR short.

Not to bury you in gap-based shorting ideas, but I present to you the Consumer Discretionary ETF:
