Playing Home Entertainment Like a Hedge Fund
Friday, August 21, 2009 : PermalinkCNBC – Cramer sees both of these as good companies in a great growth industry, but using a trick out of his old hedge fund playbook, he suggests the strategy of a paired trade: buying the best stock in the business while at the same time betting against a second stock in the same industry. By betting against another company in the industry, Cramer says, you’re hedging out the risk that home entertainment will turn out to be a flop, and because you’re buying the best company in the industry, the two trades shouldn’t cancel each other out.
Tags: cnbc, cramer, hedge fund, home entertainment, risk, stock, trades
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