Vogonomics

High yield indexes yield more than the Treasury + equity put hedge. The above chart is a toy spreadsheet model of the concept outlined in the papers below using put strike levels that gave the same daily volatility and range over the data period.  The Empirical Merton Model and Option-Based Credit Spreads  by Christopher L. Culp are worth a read. There is definitely a conceptual elegance to viewing credit in aggregate as Treasurys­ (risk-free rates) plus puts (at various strikes) on broad equity indexes. and it encapsulates perfectly the notion that by owning a corporate bond, you are long the risk-free rate and short tail risk. .

With knowledge or expertise on the x-axis and skill on the vertical axis; we're going to postulate that "conviction" seems to be an S-shaped curve, rising slowly at first and then zooming to unrealistic levels. Realised skill, on the other hand, is far more likely to grow at a decreasing return to effort in a much smoother way, topping out at the limit. Background reading on the weak correlation between self-assessment and performance in this article .