| ▲ | rrjjww 17 hours ago | |||||||||||||||||||||||||
The lack of information was my inspiration for building Riskvest. I called my own broker and when I said catastrophic bonds they asked if I meant buying bonds already in default. On the risk side - your comments here are part of the myth I’m trying to dispel and will have lots more to say in future posts. Yes for a single CAT bond you are exposed to potential 100% principle losses. But if you buy a bundle of CAT bonds that focus on say California Earthquake, Florida Hurricane, Japanese Typhoon, and a Cyber Event, you can imagine the diversification benefit you get there. I’ve already created a very very simple model for people to play around with and learn the intuition for CAT bond return patterns. A default means 100% loss and this is unique vs. other bonds. I plan in the future to build a much more robust model. https://www.riskvest.io/data-lab/cat-bond-portfolio-simulato... | ||||||||||||||||||||||||||
| ▲ | bawolff 13 hours ago | parent [-] | |||||||||||||||||||||||||
> But if you buy a bundle of CAT bonds that focus on say California Earthquake, Florida Hurricane, Japanese Typhoon, and a Cyber Event, you can imagine the diversification benefit you get there. Yeah, but imagine how bad a day you're having if all of those disasters happen at once, and then as a cherry on top you lose all your money. | ||||||||||||||||||||||||||
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