- The Idea Farm
- Posts
- Buffer BS
Buffer BS
+ Cliff Asness, Carson Block, Morgan Housel, Jason Zweig, Mohnish Pabrai, Apollo & More
“Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”
Research
AQR - Buffer Madness (10 pages)
Cliff Asness follows up on AQR’s recent piece, which was critical of options-based strategies such as "defined outcome funds" and "buffered ETFs". He addresses the six main criticisms of the original piece and offers a theory for why an industry that lacks compelling data and economic rationale to support it still has diehard fans.
Apollo Global Management - The growing role of private credit and the outlook for corporate finance (36 pages)
Apollo shares charts with brief commentary explaining the shrinking role of banks, the evolution of public and private markets, and the impact of tariffs on corporate borrowing.
Man Group reiterates the benefit of focusing on the fundamental concepts of diversification, volatility-based exposure management and systematic risk overlays to safeguard the tail.
Despite weaker public equity market returns and GDP growth since 2000, European private equity returns have outperformed U.S. PE returns during the same period. Davidson Kempner believes the factors driving private market outperformance—less capital chasing deals and more potential for “operational alpha”—will persist for the foreseeable future.
Bonus Content
Jason Zweig says be wary of alternative funds that cost too much, disclose too little and are higher risk than they sound. Link
Morgan Housel wrote about managing expectations. Link
A cybercrime group stole a quarter billion worth of crypto. Thanks to $500,000 bar tabs and a mysterious kidnapping attempt, they were caught in less than a month. Link
An analysis found that investors in funds with the most volatile cash flows earned significantly less than investors in funds with stable flows. Link
Podcasts
Short-seller Carson Block discusses how activist short-sellers expose fraud, some of his biggest shorts, the problem with CEO compensation, and more. |
Former Brown endowment chief Joe Dowling covers how colleges allocated such a large amount to alternative investments and the pressures they’re facing today as a result. |
Investor Mohnish Pabrai explains his long-term, value-focused investment strategy, which emphasizes simplicity, conviction, and patience. |
What Else Is Happening
Meb Faber spoke with Cole Wilcox about trend following and power laws in public markets. Apple | Spotify | YouTube
Did you miss last week’s email?