The Second Leg Down

Preface

There have been times when I have looked into the abyss as a portfolio manager, yet found a way to avoid disastrous losses. My trading accounts have weathered the 2008 crisis, the 2010 Flash Crash, the European Crisis of 2011 and the volatility spike from nowhere in August 2015, with varying degrees of success. Things have not always gone as well as I had hoped, yet I have always come away with a collection of new tactics for survival. For a fund manager, it is about survival after all. Aside from the money, your reward for decent performance is another year of money management. You don't want to take the path of boxers, who only decide to retire after a series of devastating knockouts. It is nice not to have to go out on your shield. This book has been inspired by the various crises I have faced as a money manager and the techniques I have learned and devised for managing through them. As every crisis is somewhat different, finding the most efficient hedge is a never-ending quest. I do hope that readers will find something that they can use to avert catastrophic losses.

The style of this book is casual and conversational, yet it attempts to be as accurate and realistic as possible. I have been asked who the ideal reader of this book might be. The best answer I can give is me, 20 years ago. This is a more pedestrian effort than Rilke's Letters to a Young Poet. Still, if I had followed the roadmap laid out in the pages that follow, I would have avoided numerous mistakes ...