Strategies

There is an interesting run down of high-level investing strategies from Gavekal in FT Alphaville. Basically, they claim there are broadly four ways to make money investing each of which has some current incarnation:

1. Momentum -- currently commodities
2. Reversion to the mean -- currently nothing, which is weirdly true. The article points out that this is perhaps partly for reasons of visibility, but I think the problem is more one of valuation.
3. Be a bank -- Borrow short and lend long or some other carry trade. This is tough right now, because nobody wants to lend.
   
4. Buy insurance -- Run a negative carry trade, or borrow long and wait for the short-term stuff to blow up. This is the CDS strategy.