You know John Maynard Keynes was once asked the same thing:

> Investment board: What happens if the world goes off a cliff?

> John Maynard 'The Badass' Keynes: There will be bigger things to worry about if that happens - stocks will be the least of your worries.

If the economy tanks - everything will tank. Your house, your job, industry production - everything. Trying to protect yourself from the market in this case is like those people who worry about possessions in a burning house - possessions mean nothing, just try and get out alive.

You can't hedge the end of the world. You can only prepare to die. Because in those situations - luck keeps people alive, not money. See all revolutions, the Holocaust, uprisings and rebellions. Money doesn't save you - property doesn't exist - titles don't matter - law vanishes into thin air - there are no rules and who you are means nothing.

If you're a passive investor - suck your shit up - that's your strategy. If you don't sell you'll be fine. If the world ends you'll be dead.

Currently, I'm long TSLA, and have been long GOOG and AAPL. I've had huge drawdowns - 10%-20% within a month, and I've had huge gains. My largest draw down on a position so far has been 60% - that's 60% gone into thin air. And guess what? I don't give a shit.

You ain't a real investor until you've had a position blow up in your face and drawn down nearly 100% at least once, and not sold because you knew you were right. That's the nature of the game. Investors are lonely - they look at the world and stand there and say: No you're wrong world, so very wrong, and here, I'll put my life on the line to prove you wrong.

I'm a value investor and I'm in here for the long haul. I play vol sometimes, huge drops below margin of safety I go all in, huge rises above, I'll just exit. But I'm always net long.

Everyone is always net long.

I get what you're saying. And you're probably right, my passive strategy is probably ok as it is. However, in 2007 the US stock market dropped by about 50% and stocks were indeed a worry while my employment remained relatively stable.

I sorta worry about a sovereign default cascade in europe with similar effects on stocks as the financial crisis of 2007. I'm not sure if trying to hedge for this is worth the premium though.

I always chortle when people say stocks fell 50%. If a house is selling for a trillion dollars, and it falls back to a million, would you be surprised? No.

Well then, if the market is overpriced by 100% and it falls 50% - why would you be surprised or worried. If the market continued to crash - you would be unemployed - as domestic consumption cycled down. We'd either end up like the Japanese or the Germans - either way - we'd all be fucked.

This is foolish advice - a proper hedging strategy in the 2007/2008 meltdown would have been tremendously valuable.

But I suppose that doesn't count, because it wasn't the end of the world.

> If the economy tanks - everything will tank.

What is the definition of "tank" in this context? Presumably absolute destruction? So what then about 2007/2008, what would you classify that as?

A buying opportunity.

> Trying to protect yourself from the market in this case is like those people who worry about possessions in a burning house - possessions mean nothing, just try and get out alive.

So would that advice apply to that scenario?