Tren Griffin+ Your Authors @trengriffin I work for Microsoft. Previously I was a partner at Eagle River, a private equity firm established by Craig McCaw. I am on the board of directors of Kymeta. Jan. 02, 2020 1 min read + Your Authors

25iQuiz: What is a barbell portfolio?

BMO Capital Markets: "We believe a barbell approach to equity investing is warranted with high quality growth exposure on the aggressive side and high quality dividend-paying stocks on the defensive side." 


"The basic idea of the barbell strategy is that the portfolio is divided into two parts: an extremely conservative portfolio for safety, and a highly speculative portfolio for extra rewards with extra risk." 

The Taleb paper is: 

Assume you own a large amount of a highly appreciated technology stock (e.g., AAPL) and potentially have more based on stock options (i.e., you work at Apple).

What other types of stocks would you buy to create a barbell portfolio?

Is this barbell portfolio a "proxy hedge"?

Some people own AAPL and AAPL options based on employment. They must deal with that hand they are dealt. This situation might call for one type of barbell. Another type of barbell would be VC on one side and US treasuries on another.


"[I used a barbell] to describe ... playing it safe in some areas (robust to negative Black Swans) and taking a lot of small risks in others (open to positive Black Swans) achieving antifragility....To make profits and buy a BMW, it would be a good idea to, first, survive." NT

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