FYI: In early 2017, Bloomberg editor Joe Wiesenthal tweeted, “A good ETF would be to take companies/markets that journalists say are in a bubble and then to go long them.” A portfolio manager at the investment firm GAM, Paul McNamara, took up the challenge, and created a hypothetical portfolio of oft-derided securities. Among them were Tesla (TSLA) and Netflix (NFLX), a bitcoin fund, long bonds, a Chinese real estate trust, and an exchange-traded note that shorted U.S. stock volatility.
The Bubble Portfolio gained 80% for the rest of 2017, dropped 23% the following year (its short-volatility note liquidated after losing more than 90% of its value), and has rebounded to gain 17% so far this year. That makes for a 25%-plus annualized return (I can’t state precisely, as I don’t have the portfolio’s official start date), albeit with some significant variability.
Regards,
Ted
https://www.morningstar.com/articles/931537/the-flip-side-of-market-bubbles.html
