Tag Archives: Mark Spitznagel

The UK’s Coronavirus Policy / Corporate Socialism

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The UK’s coronavirus policy may sound scientific. It isn’t  (The Guardian)
Nassim Nicholas Taleb and Yaneer Bar-Yam
Wed 25 Mar 2020

Our research did not use any complicated model with a vast number of variables, no more than someone watching an avalanche heading in their direction calls for complicated statistical models to see if they need to get out of the way.

Corporate Socialism: The Government is Bailing Out Investors & Managers Not You (Medium)
Nassim Nicholas Taleb with Mark Spitznagel
Mar 25, 2020

Why should we spend taxpayer money to bailout companies who spent their cash (and often even borrowed to generate that cash) to buy their own stock (so the CEO gets optionality), instead of building a rainy day buffer? Such bailouts punish those who acted conservatively and harms them in the long run, favoring the fool and the rent-seeker.

 

A ‘Black Swan’ Fund Made $1 Billion This Week | WSJ

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Universa Hedge Fund, a famous ‘Black Swan’ fund, made more than $1 billion in profits in one week amid volatility.

The recent market rout caught some star Wall Street traders by surprise. But not a hedge-fund firm affiliated with “The Black Swan” author Nassim Nicholas Taleb, which gained more than $1 billion on a strategy that seeks to profit from extreme events in financial markets.

Universa Investments LP was up roughly 20% on Monday, according to a person familiar with the matter, a day when the Dow Jones Industrial Average collapsed more than 1,000 points in its largest intraday point decline. The blue-chip index finished down 588 points on the day.

The fund’s returns for the year climbed to roughly 20% through earlier this week, this person said. Universa holds positions designed to protect about $6 billion in client assets, according to people familiar with the firm.

“This is just the beginning,” said Universa founder Mark Spitznagel, referring to the market volatility this week. His longtime collaborator, Mr. Taleb, who advises Universa, is a professor at New York University and is known for his pessimistic forecasts on the global economy.

Source: A ‘Black Swan’ Fund Made $1 Billion This Week

Another ‘Too Big to Fail’ System in G.M.O.s | NY Times

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Fifth, and what is most worrisome, is that the risk of G.M.O.s are more severe than those of finance. They can lead to complex chains of unpredictable changes in the ecosystem, while the methods of risk management with G.M.O.s — unlike finance, where some effort was made — are not even primitive.

The G.M.O. experiment, carried out in real time and with our entire food and ecological system as its laboratory, is perhaps the greatest case of human hubris ever. It creates yet another systemic, “too big too fail” enterprise — but one for which no bailouts will be possible when it fails.

Source: Another ‘Too Big to Fail’ System in G.M.O.s

The rocky road to big gains that might not happen – FT.com

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Famed investment sage Warren Buffett, like many before him, decided to sell options. Veteran trader and renowned intellectual Nassim Taleb, on the other hand, decided to buy options. While Mr Buffett would have gone for the first choice in the game proposed at the beginning, Mr Taleb would have gone for the second choice.

So, are you a Warren or a Nassim?

In 1999, Mr Taleb founded Empirica hedge fund with his student Mark Spitznagel, with the mandate to bet on the improbable long odds market happenstance. Empirica made 57 per cent in 2000, then lost 8 per cent in 2001 and 13 per cent in 2002. It closed in 2005 and in 2007, Mr Spitznagel founded Universa hedge fund, with Mr Taleb as adviser. Universa returned 115 per cent in 2008 and 23 per cent in 2011 through August. It lost 4 per cent in 2009 and in 2010. Today, it is considered a leader in tail hedging strategies and its success together with the vindication of Mr Taleb’s philosophy by real world developments has spawned numerous imitators.

via The rocky road to big gains that might not happen – FT.com.
HatTip to Dave Lull.