Financial derivative contracts that transfer credit risk of corporate debt between two parties, functioning as insurance against default.
1 take · first discussed Apr 5, 2025
Private company — no public price to score. We track what they said; valuation-mark tracking is on the roadmap.
Among the hosts with a recorded view, only Chamath weighed in on CDS, expressing a medium-conviction bullish stance as of early April 2025. He framed buying credit default swap protection as an asymmetric insurance trade, arguing that tariff-driven revenue pressure on heavily leveraged companies — particularly those with EBITDA-linked debt covenants — could trigger a wave of corporate defaults. Chamath characterized the position as potentially the best-performing asset of 2025 if that scenario plays out. No other hosts offered a competing or corroborating view on this trade.
Chamath recommends buying CDS (credit default swap protection) as an asymmetric insurance policy against a corporate debt default wave in 2025, framing it as a low-probability but extremely high-return hedge given tariff-driven recession risk and stretched corporate debt covenants.
I would be long CDS. So what am I buying? I am buying insurance. I'm buying insurance using credit default swaps... if it hits, it will be the best performing asset of 2025.”1:47:04