Monthly Archives: February 2009

My, but the Left Tail is Large

Credit bets are asymmetric.  Leveraged bets more so.  A bondholder can lose all of his investment, and can optimistically receive principal and interest.  A leveraged bond investor can lose it all with greater probability and perhaps faster, but at least has the chance of making equity-like returns in the right credit environment. Thus for Highland […]

Fifteen Notes on Our Troubled Global Economy

1) It’s nice to see someone else recommend my proposal for partially solving housing woes.  Immigration made America great.  Kudos to my Great-great-grandparents. 2) Is there Any Such Thing as Systemic Risk? Surely you jest.  Systemic risk exists apart from klutzy governmental intervention, as noted in my article, Book Reviews: Manias, Panics, and Crashes, and […]

The Ecology of Investment Strategies

Any investment strategy can be overused.  Part of the job of a portfolio manager is to ask the question “To what degree am I in or out of the consensus? Where am I in the cycle for my strategy?” Few managers are conscious of the water that they swim in.  They assume their strategies provide […]