The Best Strategies for Inflationary Times (Paper Review)
– HENRY NEVILLE, TEUN DRAAISMA, BEN FUNNELL, CAMPBELL R. HARVEY, and OTTO VAN HEMERT1 As talk of inflation is all the rage these days, it’s worth asking: what assets perform in an inflationary regime? That was the subject of this paper which looked at passive and active strategies across a variety of asset classes for […]
Diversifying Diversification: Downside Risk Management with Portfolios of Insurance Securities (Paper Review)
– Vineer Bhansali Diversification is the most important topic in investing. (Illustrations such as The Farmer’s Fable are really helpful.) It’s also the topic to which most investors pay lip service without actually doing much about it. At a very basic level, I tend to think that all investments can be categorized as offensive or […]
Beware The White Moose
There are certain books that hit you at just the right time and became a big part of how you see the world. For me, one of those books is Nassim Taleb’s The Black Swan. The Black Swan has become a widely used (and oft misused) term, but Taleb’s intended definition was simple: A black […]
Nuclear Winterizing your Investments? Meet The Cockroach Portfolio
Why do we invest? How do we protect our wealth and our family’s future amidst an unknown and chaotic world? For the past decade, we’ve been researching and working on answers to those seemingly simple questions. The journey for us began in the depths of the 2008 global financial crisis. It was a formative year […]
The Iron Law of Volatility Drag
One popular argument we often hear from investors that I speak with as part of my work at Mutiny Funds is “I’m a long-term investor. Short-term volatility or drawdowns don’t matter to us because I am happy to hold the assets for the long-term.” I hear this particularly from people who have learned about investing […]
What is the VIX, Why Does it Matter, and How is it Traded?
As part of my work at Mutiny Fund, I spend a lot of time trying to explain volatility as an asset class. The most common format for investors to learn about volatility is through the Volatility Index (VIX), a common measure of stock market volatility, and so I think it’s a good place to start […]
The Farmer’s Fable: Free as in Lunch
Today, I’d like to tell you a little story about a farmer named Bill. If you’re not into farming, it just so happens that Bill discovers one of the most important principles in investing and decision-making in this story, so there’s also that. Anyway, back to Bill. Bill grows crops. In a good season, Bill […]
Long Volatility Resources
Books The Best Tail Hedging Books As part of my work at Mutiny Fund, a deep area of interest for me is tail hedging (sometimes referred to as long volatility). I’ve read a good chunk of books on the subject and put this together as a primer of where to start. The books are roughly […]
Volatility Clusters
As a thought experiment, imagine 100 ladders lined up against a long wall. Each has a 10% probability of falling over. If the ladders are spaced out and independent from one another, each being used in a different spot, the probability that all of them fall is astronomically low. There is about a 1020x higher […]