

Floors on Losses - sanj
http://www.nytimes.com/2008/03/21/opinion/21fri1.html?ex=1206763200&en=10308e72469a983d&ei=5070&emc=eta1

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sanj
Politics aside, there's an idea I like in here:

"Bankers operate under a system that provides stellar rewards when the
investment strategies do well yet puts a floor on their losses when they go
bad."

The market that is available to mere mortals two sorts of bets: buying long
and buying short. Most people do the former, because you can only lose as much
as you put in: there's a floor on your losses.

But some folks buy short, in which case you can lose a whole lot more than you
put in.

Do folks have ideas of how to constructed (financial) executive compensation
to reflect a similar "buying short" reward matrix?

