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Friday, July 20, 2007

I'm Thinking of Buying Puts

In the last book of the Bartimaeus Trilogy, a major character dies in the last paragraph. After reading that book to her, my 9 year old daughter was devastated for weeks. She kept reading the last chapter over and over again, hoping it would turn out different.

The first printing of the 7th and last book in the Harry Potter series is slated to be "an astounding 12 million copies" (at a length of 784 pages, that works out to just shy of a cool 10 billion pages - that's a lot of trees!). That's a readership of about 100 times as large as the Bartimaeus series. If Harry dies and there ends up being 12 million children, teenagers, and young adults moping about for a few weeks, that could have a significant negative impact on the economy and on the stock market.

As a result, if the stock market begins to lose steam over the next few weeks, I may hedge my position by buying puts on stock index futures. I don't mind if the stock market goes down a bit so I can buy ones that are far out of the money and that should be pretty inexpensive insurance.

By the way, this post should definitely not be construed as financial advice. I'm just jotting down some thoughts, that's all.

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