“Do not pick up nickels in front of the steamroller!”

first_img continue reading » ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr It seems like every time a sudden and severe shock hits the financial markets, all the fancy hedge fund investment strategies that use monikers like, “Enhanced Return,” or “Alpha Plus” go from being perfectly fine to gone within a month. This has happened in the major market blow-ups in 1998, 2001, 2008, and 2020, with a few notable semi disasters (2002, 2013, 2016) thrown in between. Then, when the dust clears, investors are pulverized, and fund managers close up shop so as not to have to work the next 5 years for free to make up remaining investors’ losses.Naturally, with 2020 being easily the worst economic disaster to hit in nearly a century, the “Alpha” and “Enhanced” hedge fund story has been no different. Recently, one fund run by a very prominent money manager dropped a cool 75% in March. You almost have to try to lose 75% in a month, kind of like Max Bialystock and Leo Bloom in “The Producers.” Many other hedge funds have followed suit, only losing 25% or so. What we find is the same, old story. We find out that the managers with their rocket scientist degrees were, when it comes down to brass tacks, selling puts and calls on an index like the S&P 500 and collecting premiums every month –which was great until the market blew up. Sure, they may have been trading fancy things like “Skew Vol” vs. “VIX” or some other attributes with Greek letters, and no doubt, there were some cool algorithms, but in the end, it was simply selling volatility that blew them up. We call this, “The Picking up Nickels in Front of the Steamroller” strategy.So much of the selling volatility strategies are part of “The Fed has my back” approach to market investing. Let’s face it; the Fed has been supportive of risk for far too long. The increase in their support has been parabolic. This is what leads to long periods of declining volatility and price inflation for risk assets like equities and corporate credit. Pressure builds, as the degree of Fed support increases, and each blow-up tends to be more spectacular than the last. That is why, before the Fed and Treasury came in the markets in March with the message of, “Put the sell button down, we’re going to be buying everything!” the most liquid markets in the world, US Treasury and Agency Mortgage-Backed Securities markets were simply broken. Anyone who relied on leverage through borrowing was being margin called out of existence.last_img read more

WHS Daily Bulletin: Monday, Dec. 15, 2014

first_imgSubmitted to Sumner Newscow — Today’s Wellington High School bulletin for Monday, Dec. 15, 2014:MondayTuesday• Basketball at AndaleWednesday• Finals: First – fourth period.Thursday• Finals – fifth – eighth period.• Wrestling at Augusta 5 p.m.• Band Concert 7 p.m.Friday• NO SCHOOL- Inservice• Basketball at WHS vs. Mulvane• Wrestling at Marion 3p.m.• Winter Formal after gameSaturday• JV Wrestling at Rose Hill 8:30Monday’s lunch: Pork Rib/Bun, Romain and Tomato, tri tater, green beans, fresh kiwi.Tuesday lunch: Lasagna, garden spinach salad, garlic bread stick, pears, tomato wedges.Today’s News•Thespian Conference money needs to be turned in on Tuesday.•Students: If you have been exempted from taking a final by a teacher in any or all of your classes, you must bring a handwritten note from your parents excusing you from being at school during those exempt finals periods. Please bring it to the office by Tuesday in order to not be marked absent on Wednesday and Thursday.•You do not have to take finals if you have three absences or less with an A in the class and 3 or less tardys.•Beginning second semester, double lunch entrees will go from $1 to $1.50. Some ala carte items will also increase in price.•Did you hear? Winter break is near. What a better way to spread a feeling of cheer, than sending a message to those you hold dear! Student council will be selling candy cane grams during lunch through Monday. They are two for a dollar or five for 2 dollars and will be handed out eighth hour next Tuesday. Don’t let someone have a blue Christmas, make it a mint fresh one!•Attention Early Completers: Remember the local scholarship application is due January 9. You are responsible to make sure you turn this in on or before that date.•ATTN. SENIORS: Remember in order to be eligible for the Crusader Website “LAPTOP” give-a-way at Class Night in May, 2015 – you have to complete a LOCAL SCHOLARSHIP APPLICATION through the Guidance Office. Those completed applications are due no later than Jan. 9, 2015.”•Dancing with the Teachers will be held on January 17 at 7 p.m. in the auditorium. Sign-up sheets are in the office.•Students wanting college credit for the Southwestern College classes they are taking need to turn in their pre-enrollment form and money by January 16th.•Seniors: The Local Scholarship application is due January 9, but why wait… get it turned in before the winter break and you will be able to enjoy your time off with no worries.Follow us on Twitter. Close Forgot password? Please put in your email: Send me my password! Close message Login This blog post All blog posts Subscribe to this blog post’s comments through… RSS Feed Subscribe via email Subscribe Subscribe to this blog’s comments through… RSS Feed Subscribe via email Subscribe Follow the discussion Comments Logging you in… Close Login to IntenseDebate Or create an account Username or Email: Password: Forgot login? Cancel Login Close WordPress.com Username or Email: Password: Lost your password? Cancel Login Dashboard | Edit profile | Logout Logged in as Admin Options Disable comments for this page Save Settings You are about to flag this comment as being inappropriate. Please explain why you are flagging this comment in the text box below and submit your report. The blog admin will be notified. Thank you for your input. There are no comments posted yet. Be the first one! Post a new comment Enter text right here! Comment as a Guest, or login: Login to IntenseDebate Login to WordPress.com Login to Twitter Go back Tweet this comment Connected as (Logout) Email (optional) Not displayed publicly. Name Email Website (optional) Displayed next to your comments. Not displayed publicly. If you have a website, link to it here. Posting anonymously. Tweet this comment Submit Comment Subscribe to None Replies All new comments Comments by IntenseDebate Enter text right here! Reply as a Guest, or login: Login to IntenseDebate Login to WordPress.com Login to Twitter Go back Tweet this comment Connected as (Logout) Email (optional) Not displayed publicly. Name Email Website (optional) Displayed next to your comments. Not displayed publicly. If you have a website, link to it here. Posting anonymously. Tweet this comment Cancel Submit Comment Subscribe to None Replies All new commentslast_img read more