“Hope is a lousy hedge” (“Hope is a poor hedge”)
“Hope is a bad/crappy/lousy/poor/shitty hedge” means that one shouldn’t rely on hope. A similar phrase is “hope is not a strategy.” Erik R. Sirri, a director of the Securities and Exchange Commission, remarked in 2007 that one head trader had said recently, “Hope is a crappy hedge.” It’s not clear how old the saying is, or who first said it.
Another “hope” phrase is “Hope is your worst enemy in the market.”
U.S. Securities and Exchange Commission
Speech by SEC Staff:
Remarks Before the AICPA/FMD National Conference on the Securities Industry
by
Erik R. Sirri
Director, Division of Trading and Markets
U.S. Securities and Exchange Commission
New York, N.Y.
November 28, 2007
(...)
If a firm were to have a concentrated position in a risk that suddenly became illiquid, that would clearly be bad. However, much worse would be a concentrated position with negative convexity that suddenly became illiquid. That trifecta is a risk manager’s nightmare, as there is little to do once the markets start moving adversely and liquidity goes away, other than to hope. And as one head trader wisely said recently, “Hope is a crappy hedge.” Combine this unhappy situation with risk that has begun to morph into less obvious forms and one starts to understand what occurred with super senior ABS CDO over the past nine months.
Andrei Simonov’ Scrapbook
Quote of the week:“Hope is a crappy hedge”
Nov. 30th, 2007 at 11:57 PM
Erik Sirri:
If a firm were to have a concentrated position in a risk that suddenly became illiquid, that would clearly be bad. However, much worse would be a concentrated position with negative convexity that suddenly became illiquid. That trifecta is a risk manager’s nightmare, as there is little to do once the markets start moving adversely and liquidity goes away, other than to hope. And as one head trader wisely said recently, “Hope is a crappy hedge.”
The Wall Street Journal
December 3, 2007, 11:05 AM.
Hope Springs After a Terrible November
By David Gaffen
(...)
That’s what investors had hoped. But hope is a lousy hedge.
HousePriceCrash.co.uk
HPC Regular
Posted 01 June 2008 - 12:59 PM
(...)
“Hope is a crappy hedge”. SEC Director Erik Sirris
Rock Chalk Talk
As my trader friends on Wall Street say…..
“hope is a shitty hedge”
by Rivethead on Oct 15, 2010 7:42 AM CDT
The Financial Investigator
October 25, 2010
Harbin Electric: Hope and the Magic Margin Machine
There is an old trading desk saying to the effect of, “Hope is a [lousy] hedge.” Passed on from the wizened to the chastened, it’s usually uttered after the company whose bonds the ill-fated trader owns managed to misplace its interest payment and is pursuing Chapter XI to go and find it.
But if hope is a lousy hedge, it’s a worse investment thesis.
Wall Street Pit
Dollar Devaluation, Stagflation, and How “You’re Getting Screwed”
By Larry Doyle Apr 29, 2011, 10:03 AM
(...)
Why did I gag? One of my basic disciplines in trading and investing is to embrace the fact that “hope is a lousy hedge.” While some may care to simply put their faith and hope in the likes of Bernanke and Geithner, I would encourage you not to be so cavalier.
Daily Markets
Unemployment Report July 8…U-G-L-Y!!!
By Larry Doyle updated July 8, 2011
(...)
Remember, a basic principle of ’sense on cents’ is that ‘hope is a lousy hedge’.
Sense on Cents
JP Morgan and Jamie Dimon: A Question of Trust
Posted by Larry Doyle on May 18, 2012 7:33 AM
(...)
For those with a choice, keeping one’s distance from those you do not fully trust is typically the preferred path. For those without a choice, a lack of trust is often offset with a lot of hope and prayers. Hope always remains a lousy hedge against a lack of trust. We see this at play currently on both sides of the pond.
TheLion.com
Date: 08/14/2012 09:54
From: fragonardium (Rep: 15)
Forum: Wall Street Pit - Msg #2303179 Thread #673440755
Old market saying: “Hope is a poor hedge.”