Raghuram Rajan made a name for himself at the Jackson Hole conference in 2005, which was a kind of send-off for the victorious Alan Greenspan. Alas, but the paper he brought was not appreciated at the time, as it pointed to imbalances in the financial system. He was ahead of the curve. Thus his...
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After 9/11, and and before the merger was complete on 9/30/2001, our investment team got together and came to an unusual conclusion — 9/11 would have little independent impact on the credit markets, so be willing to take credit risk where it is not well-understood by the market. We bought bonds in hotels, airplane...
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There has been a lot of talk lately about systemic risk, a concept that is not well-understood. Let me simplify it for you. Anytime debt grows in an area of the economy at a rapid pace, there is an unstable situation to be avoided. If you are a portfolio manager at such a time,...
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When I started this series, I did not think that it would expand as much as it has. Part of that is getting great questions, such as: Hi David, Great series! You mention that reputation/size matters. Are there any “poker” aspects of reputation that can be detrimental? For example, if you develop a reputation...
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I’ve read a number of articles on hedging tail risk of late. Most of them were pretty good; I just want to add in my thoughts. For those who haven’t read the articles, tail risk is when even safe investments get hit hard. Those market outcomes are rare but severe, so some people look...
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A reader MorallyBankrupt, asked, What I am wondering here is the following, how fast was the decision process? For those of us that have never worked in the new-issue market for corps, the timeline is not obvious. How did it all flow, from getting notice of the deal, to getting a feel for the...
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This book is different, and it will get a different book review from me. I have not read it, but I have scanned it. This book aims to give extended yet compact explanations of the definitions of words that end in -isms. It does so with varying success. Here is my thesis: the more...
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Dear Readers, New asset management shops start small. One of the luxuries I have had for the past 18 years is access to a Bloomberg Terminal. I will not be able to afford one ($20-25K/year), at least not initially, as I start up what is likely to be called Aleph Investments. I will miss...
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Part I is here. For a new corporate bond manager with very little apprenticeship-type training, I had to learn some things on the fly. Of my first tier brokers, roughly half of them took pity on me initially and explained to me the rules of the road. That happened partly because I wanted to...
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When I reviewed the book Priceless, I thought I had reviewed “Fortune’s Formula,” because I had written several pieces on the Kelly Criterion at the blog and at RealMoney (free at TSCM). But I found that I had not, so I offer you this review of a book I greatly enjoyed: The book asks...
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