“My response is don’t own single-stock risk,” Barse said, “unless you know more about the stock than the marketplace because it could be that something you have no control over is going to impair your investment.”
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What drove the market?
The Dow dipped positive in afternoon trade to close up nearly 100 points, despite lingering jitters tied to reports that Hwang’s Archegos Capital Management recently sold some $30 billion in holdings to meet margin calls, according to The Wall Street Journal, citing people familiar with the matter.
“Are there others? I’m sure there are,” said David Barse, founder and chief executive of XOUT Capital, of funds that combine leverage with higher-risk investment strategies that if caught off guard could cause prices of their holdings to at least temporarily tumble. “I’m sure banks are looking very carefully at that, ”he told MarketWatch, while adding that brokers are also likely “tightening their risk profiles on clients.”
“My response is don’t own single-stock risk,” Barse said, “unless you know more about the stock than the marketplace, because it could be that something you have no control over is going to impair your investment.”
