Low Probability - High Payoff Bets in case of deflation/market crashes

[frommi]

Since the bear in me has awakened again and i thought a bit about the content of the book "The Big Short", i am searching for similar bets in case we really get a big crisis and deflation.

 

Since i can`t buy CPI contracts like FFH, i thought about long dated far out of the money put options on banks and insurances as good candidates, especially here in europe but i am not sure who will survive this and how long it will take. And since most options here in europe are from banks, the counterparty has to survive this disaster, too.

 

So i am ideally searching for companies where the equity is wiped out in 2-3 years should deflation or a big crisis start soon, because most put options have no longer timeframes. I am looking for payoffs of at least 1:50, so that i can waste 1% of my capital on this.

 

Any ideas?

[merkhet]

Look for publicly traded companies that have cleverly hidden their amount of leverage using captive reinsurance.

 

And when you find a few, report back to us on which ones. :)