No. of Recommendations: 8
More likely he thinks private credit problems will take down the whole insurance sector as people sell in fear whether it's warranted or not in the case of Berkshire.
And to be fair, that might be a smart trade. One insurance blowup might not do it, since not everyone will buy the cockroach theory. But two insurance "oopsies" might. The stock prices of solid firms fall all the time: you don't have to be able to predict business weakness if you have a decent shot at predicting price weakness.
I'm a little on the fence on whether to open some short positions when the time seems auspicious. A market rout is a terrible thing to waste, but it would be more for the intellectual challenge than for the profits. It's not as if I have to make money in the markets in any particular year. No year end bonus on the line.
Jim
