Big Tech is hiding $1.65tn in off-balance-sheet AI debt
thenextweb.com/news/tech-giants-hidden-off-balance-sheet-debt-aiWhat can people do to avoid getting caught by the bubble popping? Remove all tech stocks from their portfolio? What about indices like S&P500?
Replying to @testaccount372920@piefed.zip
not much, unless you’re rich and you make some smart hedge bets against it.
diversify assets is always smart, move more of your portfolio to cash and bonds.
Replying to @TubularTittyFrog@lemmy.world
Yep hedging would work .
But why do you need to be rich to buy a hedge? A leveraged option can be bought starting from a few dollars.
The issue is not getting the hedge, it’s getting the timing right. Plenty of people saw the GFC crash coming and invested in hedges, but they were too early and lost a bundle.
Replying to @suigenerix@lemmy.world
well if you’re rich and you lose a bundle it wont be a big of a deal, that’s why.
hedges are risky, and it’s much easier to take risks if you have a large cushion to fall on when you fall.
Replying to @TubularTittyFrog@lemmy.world
Those are reasons why loses aren’t as big of a concern for rich people. Not why hedges are only for rich people.
The cost of a hedge is proportional to the assets being protected. If someone has say a $10,000 portfolio of stocks, and they think the market will crash in the next month or two, they could buy a protective option hedge for around $100. And if someone has a portfolio of $300 million, they could hedge for ~$3 million. Wealth is irrelevant.
Also hedges aren’t risky. They reduce risk. They’re insurance.
Replying to @testaccount372920@piefed.zip
Foreign stock funds.
Replying to @SocialMediaRefugee@lemmy.world
International markets will feel this too I’d imagine.
Replying to @testaccount372920@piefed.zip
I mean you can sell everything and leave it in cash i guess. But you have no idea how long these fuckers can keep the house of cards propped up. Government bailout, angel investors, who knows.
Or if you really wanna get risky you could try to find a fund that shorts the market, specifically tech companies, then you could actually make money instead of just not lose any. I’m assuming you don’t want to get into options trading.
But again, timing is the biggest issue. There’s an old saying “the market can stay irrational longer than you can stay solvent”.