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Stephen Hammers, Compass EMP Alternative Strategies fund manager, on safe strategies for shorting the market.
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55 points that you think you know what I think this thing is going down and I'm gonna short it.
But I don't know how shorting look it's a dangerous game for the uneducated my next guest though.
Is playing to -- Stephen hammers manager of the compass.
He's here in a Fox Business explicit about -- teach our viewers this now alternative strategies doesn't just mean that you start shorting everything.
You do what's called -- hedging long short.
It's right to how -- right.
Well you know we -- the price whoever the price goes the fundamentals they can live markets can still fall.
Even though fundamentals look good.
So as the prices trending upward -- long as the price is trending down where we can short and help protect that downside risk do you -- we'll go longer certain equity short another or long the sector -- an index.
Actually long the market occur along a currency or short a commodity or -- along the bond here's one on the -- what you're doing your long crude oil.
But you're short gold they're getting killed today both -- -- Today but not in the last month and a half or so on -- -- how was that paid off for him.
It's paid off certainly last month and a half now prior to January we're actually long gold and we're long gold for several years.
If gold continues to go up because.
You know the dollar is getting weaker for example is what's happening today that's right but -- that continues in the marketplace we can certainly fall the price on the upside.
OK look here's the one year chart of this -- you've not participated in what has been about a rally of six point 6% for the S&P 500 over the past year.
I would look at that it's -- why my listening to this guy I mean and I know that this can work over the long term but.
What is it that you're looking for and expecting to really pay off for people who put their money in the spot.
Now in gold Louisville an inch short for a couple of months -- so most of the year we've actually been long.
People -- investors buy alternative assets.
Because they want a smoother ride in they come -- -- PMP alternative strategies fund.
That's the goal is to give them multiple asset classes that can longer -- to help cushion the volatility.
When you say -- about 19% in US equities that some long some short correct right because here's the pie chart of what you're doing here you've got 13% international.
12% -- -- Are you could increase that the future pull -- down to -- -- for the housing market.
We actually -- the asset class is based on risk so when you look at all the different asset classes from.
Currencies.
Stocks in commodities it's all equally weighted.
So sometimes it's slightly changes but generally it's the same based on risk so.
It's not that we like or -- real estate it will have the same risk weighting is commodities or currencies -- else.
But if real estate starts declining elected did in August then we will heads that.
OK so I think I'm gonna ask a question that some of our viewers might be thinking why isn't she asking this question and that is how do you know what.
When the time is to flip because you were long gold as he said for a pretty considerable amount of time.
So sometimes the best scoops come in the form of simple data that's out there and available to everybody out there.
One of the things that we know is that.
Managers money managers have in essence cut their net long positions in gold its lowest level since January so they're pulling back is that when you get your data do you look at that say it up that's a screaming signal for me to go short -- Purely look at the price that has nothing to do what we think because.
Honestly we don't want to be wrong.
We don't -- -- be wrong with a C asset class for the market we do equally weight all asset classes and markets based on risk that we follow the price how about treasuries he long short equity like definitely long on treasuries which part of the yield curve.
-- intermediate yield curve don't really like to be long or short like to stay intermediate to good risk -- -- return area.
Have been long for quite awhile that congress is to the seven year seven year treasuries 73 recession here okay and if rates do continue to go.
Because in improving -- -- economy or whatever remains.
We can short that downside risk that we got to make sure it's a trend.
Day by day week by week stuff you don't want to get whipsawed at all this guy has not emotional let's.
What if you -- -- it doesn't do anything out of motion purely by price Stephen thank you very thank you very nice and on a day when the Dow Jones industrials is up a hundred.
