Though there was no major outside event to explain this one-day collapse, when I thought it through that evening I asked myself, Why did this happen? Will the disaster continue tomorrow? Will there be profit opportunities created by the chaos? I believed the cause was a new financial product called portfolio insurance.
Hadn’t heard of portfolio insurance. Sounds foolish and the opposite of what you’d want to do in a market decline? (Shifting from equities to treasuries as prices fall—and in proportion to the fall)
