Michael Green:00:51:17I’d say that there’s a second component that you’re doing. Betting Against Stability with Wayne Himelsein, Straddles, SVXY, and (Gamma) Scalping with Logica’s Mike Green. This is true for Vanguard products. Nullam mollis. This is Adam Butler. And going into the end of 2017, it wasn’t that correlation retreated to normal, instead it was more extended below this historic uptrend than it had ever been before. The pay off associated with a corporate bond is almost identical to the payoff associated to a short foot. That causes Apple to actually out perform because it pushes outside that market maker band on a more consistent basis. Michael Green:01:10:15The way we choose to address the basis is that we recognize we’re trading the S&P. This dark gray line is showing you the median 401k. Some of our clients focused on small cap value, which is where I saw the greatest opportunity. Michael Green:01:02:04I think that’s exactly correct. The objective is basically, if you’re going to trade something like this, that curved surface lends itself to the exploration of a straddle. And I jokingly referred to it as, Tesla’s not the only company that’s offering autopilot. Likewise, as prices get lower, evaluations get lower, your propensity to sell falls, propensity to buy rises, and then pushes prices back up. I’m not sure where he is now. Prior to Thiel, Michael founded Ice Farm Capital, a discretionary global macro hedge fund seeded by Soros Family Management. Site by Fourth Turning Capital Management, MacroVoices Inside the Investment Committee, Boot camp on hedge funds, angel investing, and other alternative investments that are restricted to high net worth, Your support helps defray our production costs. You’re not actually using insider information. Michael Green:01:19:57I’d enjoyed that very much. And what you see is exactly what you would expect. During the interview Michael provided some great insights into: What Makes Chuck Royce Such A Phenomenal Investor, This Bull Market Is Different From Any Other, Baby Boomers And The Impact Of Mutual Fund Redemptions. This is the empirical data. And the unfortunate reality is that we have simulations in which flows remain positive and continue along the path that we’re talking about and prices can reach levels that we couldn’t even, as a true value investor. That tends to be actually where I find the greatest opportunity, where people are looking for those to converge and something fundamental has changed. Observing that, that then forced me to go back and look at the behavior of what we saw actually in the 1999 market. Nunc iaculis mi in ante. The premise being that the market in aggregate has wisdom that no individual possesses and therefore there is signal in current market prices that individuals should listen to. You have to be cautious in terms of how you think about this. You receive a new inflow or outflow. The portfolio managers could be screening for it and therefore allocating more capital to them. Logica Capital Advisers, LLC (“LCA”) is a registered investment adviser founded in 2011 by Wayne Himelsein and his team. And therefore you can obtain free rider status by simply buying the market. For more information, visit investresolve.com. So we’re actually absolutely seeing this. It means there’s two reasons why correlation could be low. And the price that you see on the screen today is actually not the price at all, it’s the price of the last transaction. Integer sagittis. We know that the price of a commodity is set at the margin. And Singapore, they were then trying to replicate the index. That was the start of the irrational exuberance. So it’s the S&P plus a fractional call. Get updates when new episodes launch, exclusive content, and more. So one of the big innovations post 2008 was we began to manage this on the basis of algorithms, and with an algorithm you can manage these exposures in a way that basically means nothing changes. Again, 401(k)s are funded through contributions from working individuals and they receive outflows from those who’ve retired. BFFs featuring Josh Richards and Dave Portnoy, Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business. Furthermore, to complement and streamline its in-house capabilities and to comply with the oversight, transparency and independent verification required by regulators and highly desired by all investors, the firm employs several layers of top tier, third-party service providers. Michael Green:00:55:05That’s exactly the opportunity that we’re exploiting at Logica. All subscribers are granted access to our overtime feed, which can, Mike Green | The Greatest Story Ever Sold: The Rise of Passive Investing & the Fall of the Free Market, Quantifying Uncertainty: A History of Financial Theory and its Implications | Daniel Peris, Howard Marks | Mastering the Market Cycle: Getting the Odds on Your Side, Jim Grant | A History of Interest Rates and Why They Matter, Claudio Borio | Sources of Financial Instability: Challenges for Monetary and Fiscal Policy, William White | Financial Fault Lines, Central Banks, and the Law of Unintended Consequences, Lacy Hunt | The Global Macro Forces of Debt, Deflation, and Demographics on Markets and the Economy, Gary Shilling | Perennial Bond Bull on the Impact of Regulatory Reform and the Trump Tax Plan, Gillian Tett of the Financial Times on the Similarities Between Wall Street and Silicon Valley, David Rosenberg Bets Against the ‘Powell Put’ and on the 'Return of the Risk-Off Trade', Raghuram Rajan on the Future of Capitalism and the Global Economy, Ben Hunt | The Narrative Machine: Investing in a World of Tall Tales, Big Games, and Giant Cons, Raoul Pal | The Fourth Turning: Generational Theory and the Future of Global Money, Grant Williams | Spooky Correlations and the Breakdown of Classical Economics at the Zero-Bound, Crisis of Beliefs: A New Model of Investor Psychology | Andrei Shleifer, Barry Eichengreen | A History of the Great Moderation: Currency, Populism, and Credit, Robert Johnson | Political Economy, Technocracy, and the New Gilded Age, A History of the Federal Reserve and the Chairmanship of Alan Greenspan | Sebastian Mallaby, Steve Keen | A History of Economic Theory and the Origins of the Next Financial Crisis, Christopher Cole | Profiting from Uncertainty: Financial Volatility at the Edge of Crisis. I appreciate it. Earlier this year he became one of our most popular podcast guests; this time Mike Green (Logica Capital) returned with guns blazing. What is it? One is here’s your low with the introduction of index funds. These are complex dynamic systems. Those are being sold. 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. Adam Butler:00:47:28That’s a characteristic that you are focusing on and trying to distill and dig into. We strongly recommend that you download the chart book that accompanies this episode, as Erik and Patrick will refer to it throughout the postgame segment. Adam Butler:00:41:52So does this show up in the momentum indices? Morbi interdum mollis sapien. Is it 60% or two thirds of retirement plans have already adopted this framework? I think that the tail hedge discussion will emerge from some questions I wanted to get to later on anyway, which is about how your… Because in a lot of the articles you’ve written, a lot of the interviews you’ve given, you’ve referred to the fact that you’ve positioned clients to participate asymmetrically to one of a finite number of potential outcomes, and so I think we can probably drill into some of the optionality and how you structure that optionality as we discuss that. Bill and Grant welcome a towering intellect in the shape of Mike Green of Logica Advisors, to discuss the role passive investing may have to play in The End Game. Trust us – this episode will challenge almost everyone's beliefs and is not to be missed. I’m going to go buy a bunch of stocks that I’m confident are going to perform.” Microsoft, the Amazons, etc, the world that led the market in that last component. …. Just need to be fundamentally anchored to some sort of cashflow expectation. I operate under the principle that I’m somewhat incompetent in execution strategies, and so what I’m always looking for is the greatest value opportunity. You can’t point to Vanguard or point to BlackRock and say, that’s the entire story. You would have a technology fund or you would have an industrials fund or you would have a large cap balance fund. Copyright © 2016 Macro Voices. Adam Butler:00:54:53Okay. A simple example of an efficient market hypothesis component is that you can, in a frictionless manner, trade in and out of securities. It’s larger than hedge funds by a significant measure. Which stocks are going to underperform? Okay. The most you can lose is the money that you put up. Adam Butler:00:42:00To what extent does, or how should we think about global capital market expectations? First of all, the papers that you’re referring to can be found on our website, logicafunds.com. The purpose of today’s episode is to help shed light on the source of this unease and to set the foundation for the second part of our conversation, which has been made available to Patreon. Navigating Market Volatility - The Derivative by RCM Alternatives, In this episode, we’re joined by a powerhouse group of volatility experts consisting of Kevin Davitt, Wayne Himelsein, Jason Buck, and Bastian Bolesta – moderated by our very own Jeff Malec discussing Navigating Market Volatility. It took about 36 seconds of math to figure out that that ’. In most cases, the private office of Peter Thiel managing some of his personal Capital up.. I could use the s & P short a call after that experience, I you. //Patreon.Com/Hiddenforces, Join the conversation on Facebook, Instagram, and I ’ m telling or by continuing on site! Done was the predecessor to the type of behavior where we began to see an explosion futures! Market cap was so much larger than hedge funds by a significant measure 's. 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