Second worst month ever

Thus far, May 2006, is shaping up to be the second-worst month for System HAG. In September 2001, losses came in at around -14%. So what has made this month so devastating? Well, it was the way the market's anxieties about inflation have consistently increased day-by-day since the stimulus that set them in motion (the Fed meeting last Wednesday). Slowly building anxieties, combined with options expiration tomorrow (heightened volatility) have led to a worst-case scenario. The foundation of "Psychological Arbitrage" is that market anxieties usually have a rapid onset and a quick relief. Though relief is not always quick, betting that it will be quick is a winning bet to take if you take it every time. Let's see how the long run works out for System HAG.