Marc Keirstead

If you think portfolio risk management is just about diversification, think again. This article sheds light on some surprising strategies that challenge common perceptions. Here are some thought-provoking takeaways: - Did you know that reducing the number of investments in a portfolio can sometimes actually decrease risks? It's all about strategic selection. - Contrary to popular belief, actively managing risk doesn't necessarily mean more frequent trading. In fact, a hands-off approach can be a smart move. - One of the key points discussed is the importance of understanding the correlation between investments, a factor often overlooked in risk management strategies. - Asymmetric risk and the role it plays in portfolio management is explored, offering a fresh perspective on balancing risk and return. - Ever considered tail risk hedging? This article dives into this lesser-known strategy that can enhance risk management effectiveness. Share your thoughts and feelings on these unconventional risk management strategies. https://lnkd.in/ecgSpH93

https://lnkd.in/eNMQk-Y9 Will the Fed reduce rates in September? We don't think so. Shelter costs are still running at 5% increase per year and contribute more than 1% to the overall CPI. The Federal Reserve is hoping for inflation to fall below 2% before dropping rates. Until last month, when energy costs plummeted and brought month over month CPI increase to 0%, inflation had been increasing at an annualized rate of 3% to 4%. There are no Fed meetings in August or October. Even though many experts believe there is a 75% chance for a rate cut in September, we believe it may come after the election.

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Trailling PE Ratio Premium/Discount of Small vs Large (Topdown 1973-2024) https://ow.ly/qiPC50TAI1S

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Equities continued to performed well as the first half of the year comes to a close. The S&P 500 gained +15.07%, the Nasdaq 100 gained +18.97%, and the Dow Jones Industrials inched up +3.72%. The majority of those gains came from the Technology sector (NVDA +159%, AVGO +54.91%, MU +60.32%), and the communications sector (META +44.07%, GOOG +32.97%).

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8 OCT 2024 Fraser Irving Kite Lake soft closes flagship fund amid gains KL Special Opportunities Fund has raised $400m this year https://lnkd.in/erENUv3g London-based hedge fund Kite Lake Capital has soft closed its flagship offering after boosting firm wide AuM to more than $2bn. The KL Special Opportunities Fund closed to new investment earlier this month after raising more than $400m in new capital this year. The fund now manages approximately $1.7bn, while the firm oversees about $2.3bn. Kite Lake’s other funds, KL Event Driven Ucits, KL EM Credit Opportunities Fund and the KL Recovery Fund remain open to investors. The KL Opportunities Fund is up 7.5% YTD through September and has posted positive annual returns since inception in 2011. The fund, which trades an event-driven strategy across merger arbitrage, reorganisations, credit events, distressed and corporate events, gained 15bps in September, it is understood. It returned 10.8% last year and 14.4% in 2022, according to With Intelligence data. The average event-driven hedge fund tracked by With is up 6% YTD and returned 8% last year. Kite Lake was founded by ex- Cheyne investment professionals Massoumeh Khadjenouri and Jan Lernout. The firm has since bolstered its ranks and how has 23 employees after recently hiring operations analyst Anna Przelawski who joined following a stint at Brooklands Fund Management. Kite Lake confirmed the details.

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This week's Disruptive Theme is Intangible Assets. While modern accounting standards have failed to keep up with Intangibles, there are a few #ETFs out there that help fill the "gap" in "GAAP accounting" https://lnkd.in/g_bSFhaV #intangibles #freecashflow #moats To learn more about how VettaFi can help support your index product and distribution growth strategies, please get in touch with us here! https://lnkd.in/g5974aQJ

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Attached please fine the Week in Pictures, with charts and commentary as follows: Is the “Break-Even” Change in Payrolls 300k? Immigration and the Labor Market Private Sector Net Interest Income Mixed Labor Messages Mexican Elections Spark Market Sell-Off Beginning of the FX Carry Unwind? Large Cap Dominance Nvidia Now at the Scale of France U.S. Equities Relative Valuation Multifamily the Next CRE Concern? Japan the Exception? Could Faster Wage Growth in Japan Mean a Weaker Labor Market?

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Quite a plunge for Chicago PMI in May ... index fell to lowest since May 2020; but worth noting that this has been much weaker than national readings from ISM or S&P Global

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A new survey from the CFA Institute Research and Policy Center has uncovered real concerns from investment professionals regarding the U.S. deficit. 77% of the respondents believe that the U.S. debt level is simply not sustainable. Serious concerns exist around how the U.S. dollar can maintain its status as a reserve currency. I encourage you to read the full report to learn more, please find the link in the comments below. #USEconomy #GlobalFinance #USDollar

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News alert: valuation matters today! Our DCF models are an incredibly powerful valuation tool as many of you who’ve seen our Reverse DCF Case studies know (see them here: https://lnkd.in/gPGKtJNq). And, I have some news about those models. In case you’ve not seen, the team is hard at work making a lot of cool updates to our website and research tools. One of my favorite is the new charting tools for the Decision Page in our reverse DCF models. Words alone can’t do this update justice; so I put together a short video for everyone to see. Hey, I’m not a video producer, and I’m not getting an Academy awards for this video, but I think it gets the job done. In this short video, I am going to show everyone exactly why Tesla's stock ($TSLA) valuation is ridiculous. I welcome anyone to take the other side of that argument after watching this video. https://lnkd.in/gvAe_cQm

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Good article out today from the WSJ on some challenges facing Pension Funds stuck in Zombie PE Funds (see link below). It reminded me of a presentation from GS I recently saw where the allocation breakdown for Pension Fund assets was depicted. The move toward Alternatives has been aggressive over the last many years, now close to matching allocations to public Equities. However, as the article points out, complexity + illiquidity don't always translate into superior outcomes. For Pension Funds, it's been public equities that have served as a great source of liquidity recently, as they've been big sellers every month end this year and sanitizing gains into FI in the process. As retail investors become the latest targets for PE funds, they should take note and ask hard questions. WSJ: Pensions Piled Into Private Equity. Now They Can’t Get Out. "Now the honeymoon is over. The payouts have dried up, creating an expensive problem for investment managers overseeing the savings of workers retired from big corporations and state and city governments. To keep benefit checks coming on time, those managers are unloading investments on the cheap or turning to borrowing—costly measures that eat into returns. California’s worker pension, the nation’s largest, will be paying more money into its private-equity portfolio than it receives from those investments for eight years in a row. The engine maker Cummins took a 4.4% loss in its U.K. pension last year, in large part because it sold private assets at a discount. It is the latest cash crunch to befall retirement funds that have piled into hard-to-sell investments in search of high returns, and spotlights the risks as Wall Street is trying to sell those investments to wealthy households." https://lnkd.in/ePr8ZH-f #privateequity #macro #investing #trading #equities

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The recent selloff in credit markets has opened up attractive opportunities. Rapid unwinds hit currency, equity and credit markets trading at hefty multiples and compressed spreads due to crowded carry trades. The losers have not been riskier assets, but "high quality" crowded trades, like investment grade CDS indices as well as short volatility strategies. The winners are strategies who are nimble and can pick up high quality assets quickly, when opportunities arise. For more on our strategy and views at Andromeda Capital Management, as well as our latest investor letters and webcast from earlier this week, please see: https://lnkd.in/gBesRnbU

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Many CFOs and finance teams aren’t familiar with the opportunities and challenges seen in private credit transactions. We outline six questions executives and boards at companies should be asking. https://lnkd.in/eja_64-N

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In our most recent Quarterly Letter we discuss the Florida Land Boom of the 1920s, why value managers "cheat", and the importance of an antifragile investment strategy

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The Times They Are A Changin’ The three pillars of Private Credit have evolved from 1) Middle Market Lending, 2) Lower Middle Market Lending and 3) Upper Middle Market Lending to a broader, larger TAM that is worthy of consideration. Capital allocators have greater flexibility with a strong potential for enhanced returns by optimizing and diversifying their portfolio of Private Credit holdings. Key to select upper-quartile, experienced managers, however the approach to strategy that has prevailed during the past 10 years, may not be optimal in the years to come. Looking forward, Private Credit will be defined differently. Direct Lending will continue to receive allocations, however Asset-Based Lending will begin to take a larger share of the growing pie. ABL is huge, the TAM is measured in tens-of-trillions and I believe will grow to be as large as Direct Lending in 10-years’ time. Marathon Asset Management has been actively running its ABL strategy for the over 15 years and as an incumbent and experienced ABL manager we see firsthand how this market is developing. Basel III-Endgame will advance the development of Private Credit ABL just as Basel III enabled private credit managers to capture market share for Direct Lending over the past 15 years since the GFC. As the global economy grows, both Direct Lending and ABL will benefit as they form the 2 key pillars of the Private Credit market. The 3rd leg of the Private Credit stool are Opportunistic Strategies, defined as Capital Solutions, Dislocation & Distressed. Capital Solutions are a critical component to lending allowing for both growth capital as well as bridge capital during times of stress or transition for a company. Capital solutions may require a turn of extra leverage, carrying significantly higher coupons (~200bp+), +warrants supported by super-strong covenant package that can provide the lender with higher IRRs and MOICs.. Given current market conditions, capital solutions are a key component for any opportunistic lending program. As companies go all out to avoid BK, distressed exchanges have added to the opportunity set, as new money solutions enable companies to exploit weak documentation within credit agreements lenders previously accepted. Today, Opportunistic Credit is robust and I see as many opportunities in Capital Solutions as I do in special situations and dislocation. The right combo for a Private Credit portfolio might be 40% Direct Lending, 40% Asset-Based Lending & 20% Opportunistic Credit. Private Credit performance is remarkably consistent with lower volatility relative to most alternative assets. Porfolio Construction is always top of mind for me - how would you build your Private Credit portfolio? What strategies, which managers, how big of an allocation across a balance book that includes Public Debt, Public Equities and Alternatives? Private Credit in aggregate is approaching $5T across various strategies. I believe it will 3x ($15T) in 10-years.

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Great speaking with Anthony Harrup and the The Wall Street Journal about the election in Mexico, its implication on equity markets, and fundamental investing via active ETFs! https://lnkd.in/eWVPkWH4 Global X ETFs Mirae Asset Global Investments #Mexico #LatinAmerica #EmergingMarkets #Investing

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[Compounders Podcast Clip] Before launching Maestria, James Edwards, CFA, CPA thought deeply about how to differentiate the firm within the crowded sea of equity managers. So, I asked Jim about how he can be different when he owns some of the largest, most well-known companies in the world. Please enjoy the full episode here: https://lnkd.in/g-2q2X57

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Once considered the unpopular and neglected counterpart to men's leagues, women's sports now draw a new, profitable fan base. The excitement has been predominately centered around women’s basketball and soccer, which have shifted from being mainly grassroots-driven to attracting significant commercial investments. The Women's National Basketball Association (WNBA) is anticipated to reach revenues of up to $200 million this year, doubling its 2019 figures. Additionally, the National Women's Soccer League (NWSL) saw a 33% year-on-year revenue increase in 2023. While the valuations of men's professional teams continue to rise, the commercialization of women's professional sports is in the early innings and has the potential to achieve extraordinary success. Learn more about the commercialization of women’s sports in our latest insight: https://lnkd.in/ePH8n-rF #paris2024 #womensports #prosports #privateinvestments #olympics For financial advisors only. IMPORTANT DISCLOSURE: https://lnkd.in/e3VJtU2q

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