Chapter 4 is about ‘Trading in Down Markets’ and Robbie particularly talks about Shorting Indexes as a Hedge:
‘The same is needed in trading. If you run it as a business you need to use all the tools at your disposal. And that should include shorting. When Shares tumble, selling up is very costly. Shorting allows you to hold onto your shares, waiting for the turnaround, while making money from the markets going down.’
You know I won’t be arguing with that !! The Book has quite a bit on this and of course it is worth bearing in mind that recently the FTSE100 has not been so useful as a Hedge due to how it moves with the gyrations of the Pound since Brexit and its uneven Weighting which gives the Top 10 Stocks considerable force over how the Index moves. Regular Readers will know that I talk about this sort of thing quite a bit in my Weekend Blogs.