The original rationale for private investments was that they had an illiquidity premium. That is, they offered a higher return in exchange for giving up liquidity. You can make the argument that as they become more liquid and more popular, the asset class gets bid up and the risk premium for being illiquid goes away. That is, the expected return and degree of liquidity converge with public markets over time. And then privates are not necessarily a "great place to be" any more as you can just sit in publics and get the same deal.

Of course one time I do this at the gym I get kicked out.

I'm mentioning this as short-rate contracts are not on the radar for most of fintwit. Consider long SOFR futures. 12-24 months out. If nothing else, a good diversifier for the rest of your risky assets. We may get some economic weakness relative to what is discounted. And treasuries are not attractive (despite performing OK last few days). The term premium, however your personal favorite way to measure it, is too low. Just get the sizing right as there is very little volatility in these contracts.

“Before you go on vacation and get away from your screens, you want to hedge the risk that you have in the market, and one way you can do that is to buy gold,” said Boris Mikanikrezai. Who are these traders they are envisioning doing this? At least at HFs, this is not how things work at all. bloomberg.com/news/articles/…

Parks and Rec was a documentary. NIMBYism is truly beyond parody. x.com/ChrisByBike/status/181…

This is a fun mathematical puzzle. I had not seen it before. piped.video/watch?v=iSNsgj1O…

FWIW, number of low liquidity credit and credit-like instruments (e.g., pref eq) are taking bigger hit than they should with the inflation release. Many of these don't have much duration. And credit risk should not be impacted. Consider picking them up w/ nominal rate hedge

$RING ETF (gold miners) up 5% right at open. Down a bit through the day. Then down 7%+ after close… Gold went nowhere today. Something with miners today?

Life hack: In common usage the word "or" means exclusive or. When presented with an "or", spend a second thinking if something interesting happens when you transform it to an inclusive or.

new post dropped: All my homies hate LASSO (it's meant to be free so everyone who RT will get access 😃) 🔮how good is LASSO at recovering sparsity? 💡 lesson from a macro HF PM in building +150 forecasting models 🏰 (lack of) invariance of regularisation featuring stolen content from @choffstein @macrocephalopod @bennpeifert @quant_arb

new post dropped: Should you combine positions or signals? (Part II): Having your cake and eating it too (sample code provided out of gratitude for the subs 🙏) 🔎hedging factor risk w crystal clear attribution 💹Jensen's inequality in portfolio construction 🔮managing strategies w diff turnovers seamlessly featuring stolen content from: @therobotjames @robertmartin88 @experquisite @macrocephalopod @choffstein @__paleologo giving away free access to few who RT this :)

"Have central banks blundered into over-tightening?" Below is a good take, on a viewpoint that differs from many here on Fintwit. Always worth considering alternative arguments when formulating views.

So for a HF with a 55% win rate...this is why portfolio construction, diversification and risk controls matter. But those topics rarely discussed.

Funny people on Fintwit are constantly complaining how this person is wrong and/or bragging when they are correct...leaving out all the times they are wrong... Typical HF win rate is typically around 50-60%. Depends on strategy. But it isn't that high.

Biggest diff between twitter investment content and HFs I've worked at: (1) Diversification: 10s, if not 100s...1000s, of positions (2) Alpha on differential bets: Across curve, capital struct, vol complex, countries (3) Confidence: Know they might be wrong, operate that way

Good set of cases on Feds ability to engineer Soft/Hard Landings from Alan Blinder. Quick easy 15 minute read. pubs.aeaweb.org/doi/pdfplus/…

There is a lot of junk on Fintwit. And I usually don't post. Most macro research is junk. I've followed this firm, MacroStrategy, for awhile. Don't agree with everything, but quality of thinking is high. piped.video/watch?v=7AA0LEaB… TBC, I have no connection to either firm

Still killing it after all these years!!!!