As Jon Najarian said on CNBC a few minutes ago, there's no guarantee that meltdowns like the one yesterday won't happen again. In fact, without some kind of intervention and change, it's likely to happen again, maybe even to the upside.
It screams of unfairness and injustice for the retail investor and trader. But it also blows out the notion that being long only in this market is the best way. Whether it's trading GLD or buying a bond ETF or flat-out betting on a decline in the S&P 500 or betting on increasing fear, it basically behooves us to hedge our positions.
When the machines kick into full throttle, why should we humans allow ourselves to be completely pulverized? I may narrow future profits this way, but I will never let myself be castrated because I've been long only in my positions.
Can't beat 'em? Yep, I'll join 'em, just enough to survive until the coast is fairly clear again.
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