Lemstaboy
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I see investors occasionally discussing how to protect their investments from the effects of catastrophic events. But 20+ years ago I had a friend who traded only catastrophes!
He was very successful at it. I didn't have the fast connections that he had, so I could never mimic what he did - but it fascinated me. I am interested in knowing if anyone else trades in similar fashion. I lost touch with him, and he has since died - but his widow told me he did continue with that same approach and continued to do well from it - though he regarded it as an exciting hobby not a fulltime business.
He maintained a worldwide watchlist of the top aircraft makers and top airlines, with automated alerts on their price movements. When a major plane crash occurs, there is, within the first second or so, a sharp plunge in the stock price of all the top airlines and airplane makers. Partly due to most traders not yet knowing which maker and airline is involved, and partly because there will be some degree of read-across affecting those not involved anyway. His trading was related to the rebounds in the prices of those not involved, with automated buy/sell orders always in place. The rebounds often occurred in seconds or minutes, as well as throughout the day/s.
He had similar watchlists set up for the owners of cruise ships and related holiday companies, and I think he had one for train companies. But plane crashes were his main focus. I know that initially he included related insurance indices but he ditched those because they had enough mechanisms in place to accommodate disasters.
I still don't have the technology (or the skill) to do what he did. But I am interested in the (much smaller) gains that might be made on, say, Day Two/Three.
He was very successful at it. I didn't have the fast connections that he had, so I could never mimic what he did - but it fascinated me. I am interested in knowing if anyone else trades in similar fashion. I lost touch with him, and he has since died - but his widow told me he did continue with that same approach and continued to do well from it - though he regarded it as an exciting hobby not a fulltime business.
He maintained a worldwide watchlist of the top aircraft makers and top airlines, with automated alerts on their price movements. When a major plane crash occurs, there is, within the first second or so, a sharp plunge in the stock price of all the top airlines and airplane makers. Partly due to most traders not yet knowing which maker and airline is involved, and partly because there will be some degree of read-across affecting those not involved anyway. His trading was related to the rebounds in the prices of those not involved, with automated buy/sell orders always in place. The rebounds often occurred in seconds or minutes, as well as throughout the day/s.
He had similar watchlists set up for the owners of cruise ships and related holiday companies, and I think he had one for train companies. But plane crashes were his main focus. I know that initially he included related insurance indices but he ditched those because they had enough mechanisms in place to accommodate disasters.
I still don't have the technology (or the skill) to do what he did. But I am interested in the (much smaller) gains that might be made on, say, Day Two/Three.
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