Netflix Drops 35% | Why Hedging Concentrated Single Stocks Makes Sense | Solving the Low Cost Basis Issue

Derek Moore explains that drops like Netflix this week are not that rare in single stocks. There are tons of examples, especially around earnings releases. Why do people have concentrated portfolios? Diversification vs. single stocks. Problems with selling low-cost basis stocks. How to hedge large, concentrated positions.  

What caused Netflix to drop 35% after earnings?

The risk inherent in holding large, concentrated positions in stocks

Reasons investors hold concentrated stock positions

Low-cost basis concentration reasons versus the YOLO (You Only Live Once) crowd

Examining why investment advisors haven’t been able to offer value for concentrated low basis shares

The numbers don’t lie when it comes to standard deviation and risk compared to markets

Examples of past single day drops after earnings

Surprisingly, many stocks are down 40% or 50% from all-time highs

Single stock risk versus market risk

When diversification on its own failed

Why diversification plus hedging works

Mentioned in this Episode:

Contact Derek Moore [email protected]

Derek Moore’s Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

White Paper On Hedging Low Basis Concentrated Stock positions (right hand side to download) https://zegafinancial.com/products/concentrated-stock