Hedging Against Volatility in a Bull Market of Fear with Christopher Cole

from CapitalAccount

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Welcome to Capital Account. Since the VIX is considered the stock market’s “fear gauge,” and its measure of volatility is currently very low, does this mean that the markets are back to normal? We talk to volatility analyst Chris Cole about what a complete picture of the economic and financial universe reveals about a bull market in fear.

And European leaders have failed to reach a deal on cutting Greek government debt. According to Bloomberg, continued disputes over EU budget plans could go on for months. Many people worry about the ‘known-unknowns,’ events we know we don’t know, including the sovereign debt crisis and the Fiscal Cliff. Then there are the ‘unknown-unknowns,’ such as the Flash Crash and Fukushima. So how do you protect against the ‘unknown- unknowns’? We talk to Christopher Cole, managing partner of Artemis Capital Management, about how you can avoid being “the Turkey on Thanksgiving.” Chris Cole says volatility is the market price for uncertainty. Given these uncertain times, with the US Fiscal Cliff ahead and Europe on the rocks, why do we keep hearing about how the VIX is so low? According to a Wall Street Journal blog post, the stock market’s so-called “fear gauge” remains fast asleep. So how do we hedge against these different types of uncertainty and risk, and can we even hedge? Christopher Cole is here to tell us!

Plus Black Friday, the biggest shopping day of the year, is just around the corner. However, this year you may see retail workers protesting what they deem unfair labor practices. We know public companies are focused on delivering quantifiable bottom line results but how do you value the “unquantifiable,” such as treating your employees a little better? Lauren and Demetri discuss lessons Walmart can learn from Costco in today’s “Loose Change.”