Investing for the end of the world?
What to invest your money in on your last day According to ‘those who know’, aka a US Christian radio network, May 21st was to be the last day of the world. They predicted that on this day an earthquake would shake the world on this day, sweeping the righteous up to heaven and leaving others behind to be consumed in a ball of fire in October, 5 month’s time. Let’s go back to May 20th and look at some investments you could have considered.
A sucker’s bet The question left some on Wall Street on a relatively quiet day of trading to ponder the strategy to end all trading strategies. Barry Ritholtz, CEO and director of equity research at Fusion IQ in New York said, “The end of the world trade is a sucker’s bet because if you’re right, your counterparties are dead and you have nobody to collect from; however if you’re wrong, you will end up owing a lot of money.”
The housing market? For the sake of this highly hypothetical discussion, Ritholtz wasn’t too keen on the housing market, since land would hardly be at a premium. “It would be terrible for housing prices. It’ll reduce demand and put a lot of additional inventory on the market,” he said.
Falling stocks Others bet that stocks would fall dramatically as the labor force and investors disappear in the smoke. Tom Sosnoff, CEO of tastytrade.com, a financial news network website based in Chicago said, “Assuming somehow I escaped and lived through it, I guess I would want to be short a lot of stock index futures and buy a lot of puts.” That said, he wouldn’t get completely irrational and dump a stock that’s risen twelvefold in two-and-a-half years.
Netflix “I would probably want to be long Netflix because nothing can make that stock go lower, even the end of the world,” said Sosnoff. The online movie rental company, despite the best efforts of short-sellers, is up 245% in the last 12 months.
What if… But what if the righteous do leave this weekend and the sinners don’t meet their demise in five months time? That would leave a big crowd of sinners to live out their years eating too much, drinking excessively and puffing away on cigarettes. Liquor companies, cigarette makers, gambling establishments, pornographers and all others who peddle anything that make the “bad” feel “good” would be a safe bet in the new world.
The Great Recession For some, the best proxy for an end of the world trade was the market meltdown during the financial crisis and Great Recession. Heck, an Internet search for “end of the world trade” brings up tons of links to the financial meltdown, and just a couple of mentions of May 21, 2011.
Geography Something else to think about – geography. Americans tend to take their religion very seriously, leaving fewer people for economic growth than in the more agnostic parts of the Earth, like Europe.
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