And therefore you can obtain free rider status by simply buying the market. Well, if the insider ownership factor overlaps with the technology designation, then you’re suddenly in a situation in which technology begins to outperform and the technology then attracts additional capital. That you’re being compensated for the purchase or sale of embedded options, when you systematically decided that you’re going to do something. If you isolated it and kept the volatility constant though, now you really see this trend in correlation emerge. Always consult a licensed investment professional before making important investment decisions.
His work on the impact of the growth of passive investing has been presented to the Federal Reserve, the BIS, the IMF and numerous industry groups. You offset it through arbitrage, by going out to buy all the stocks.
the acquisition or disposition of business units from a strategic corporate planning standpoint. You would read that you’re going to buy stuff that falls in price, so your short a put, and you agreed that you’re going to sell stuff that rises in price, short a call.
In this wide-ranging discussion, Logica's Mike Green describes a mosaic of ways to "seek out a straddle", and reveals new data and analysis to help flesh-out his thesis on the growing importance of systematic passive flows to U.S. stocks. Let’s do my topic, which is Michael Green who has previously been at Thiel Capital.
Did the straddle work or not? And in 2012, those rules again changed. Additionally, he manages the day-to-day analysis and management of the individual strategies and the portfolio as a whole.
The alpha for the active segment is negative. For me, I think one of the things that tends to be a huge advantage for people is if you have an extraordinarily good memory and you’re able to pull disparate pieces of information together.
Michael joined Logica in January 2020 after serving as portfolio manager for Thiel Macro, LLC, an investment firm that manages the personal capital of Peter Thiel.
We’re showing alpha. We have covered a tremendous amount of ground. What investors should look out for during a period of hyperinflation, Potential risks and threats of U.S. dollar losing its reserve currency status, Play the Above Episode in a Pop-Up Window. Green argues that the simple algorithmic logic of passive vehicles causes irrational capital allocation. With China showing the first signs of a return to relative normalcy and Europe seemingly making its way to the other side of the deadly curve, we are faced with one question: what will the shape of the recovery look like? , or how that changes the structure of how we should think about capital market expectations. Effectively what we’re doing is we’re driving a car that has no brakes, uphill. Options are often deceptively cheap or expensive. That’s exactly the opportunity that we’re exploiting at Logica.
A lot of people will say yes, but as Apple gets bigger or as Microsoft gets bigger, it requires more capital to make them move relative to other stuff. I’m assuming the market price is the correct price.
Due to industry regulations, they will not discuss any of ReSolve’s funds on this podcast. And that led to the futures players trying to replicate the futures, because that’s how they’re created. Ut justo.
This is the alpha created by the return associated with short option strategies. Vivamus a mauris eget arcu gravida tristique. from the Wharton School, University of Pennsylvania. You can access the second part of today’s conversation, along with the transcript and rundown through the Hidden Forces Patreon Page.
And what you can actually see is that the medium 401(k) looks exactly like a target date fund up until about 45. In 2011 a senior research guy, a GMO I’ve got the name of Sam Wilderman and his partner wrote a piece called Rethinking Risk, I believe is the title of it, which explored the idea that value and momentum can be thought of in these terms. Mike Green | Passive Investing's Role in the Coronavirus Market Melt-Down & Prospects for a Melt-Up.
The vast majority of time, what you’re going to experience is upside pressure. There’s all sorts of reasons that you can explain why this happens. Did you give me cash? I had the opportunity to listen to your podcast talking about tail risks. And so, again, this is proprietary research, I don’t often show this. And so what was actually happening was that the construction of the Shanghai stock market was it was market cap weighted, and yet many of the companies that were listed in the index had floats of 10%, 5%. You would have a technology fund or you would have an industrials fund or you would have a large cap balance fund. Trust us – this episode will challenge almost everyone's beliefs and is not to be missed. If your head isn't spinning after this remarkable conversation, then that sure as hell isn't Mike's fault... Wayne Himelsein begun his career on a proprietary trading desk at Carlin Financial Group in the mid-90’s, doing statistical arbitrage—complimentary to his mathematical nature. So it’s completely absurd to imagine that an entity the size of BlackRock or Vanguard is not influencing the market itself. Michael Green:01:10:15The way we choose to address the basis is that we recognize we’re trading the S&P. You must not pass on any information contained in the document to third parties unless such disclosure is permitted by applicable local law and regulation. Praesent elementum hendrerit tortor. So there’s all sorts of narratives. That was the start of the irrational exuberance.
If so then, then sell. Michael Green:01:06:35Yep.
For Product Specific Information Contact. The opinions expressed on MACRO VOICES are those of the participants. His proprietary research into the shift from actively managed portfolios and investment funds to systematic passive investment strategies has been presented to the Federal Reserve, the BIS, the IMF and numerous other industry groups and associations. Because we’re now big enough. Nullam quis massa sit amet nibh viverra malesuada. I would argue that momentum framework is being reinforced or created by passive penetration. Michael Green:00:05:53I met Wayne over Twitter, believe it or not. But that meant you were buying twice as many shares of Microsoft as were actually available, or 10 times as many shares of Google.com. That’s one of the things I always caution people when they hear my thesis on passive, or try to caution people, is that while I think this is the most important story, it’s not the only story.
The black line here corresponds to the chart we were just showing before. Steven holds a B.A from the University of South Florida and an MBA from the University of Michigan.
Morbi interdum mollis sapien.
Suspendisse mauris. We see it in hedge funds.
And so my structure has always been to seek out a straddle, basically find a way to participate to the upside and find a way to participate to the downside in …. There will be no minus hundred percent outcomes there. Part of the challenge of doing that in the discretionary framework, particularly from a macro perspective, is just that there’s so many assets for you to choose from, that you’re on an extraordinary basis risk.
So there’s low covariance. Finally, he said, “There’s an office in LA.” And I said, “That’s LA. Senior editor Ash Bennington hosts Real Vision favorite Mike Green of Logica Capital Advisors. There’s no variance. he modularized the up capture and the down capture components of that. If embedded in that portfolio construction, I’m either buying options or selling options.
The first was the registered investment advisor act of 1940 that created the modern mutual fund. I could trade anything. In the current market environment, investors are getting paid to own optionality.
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