Phil Bak

In the wake of the recent sell-off, the current drawdown for the US stock market remains at a relatively moderate level, according to a new research note from TMC Research, a division of The Milwaukee Company. "The recent sell-off in the US stock market was, as usual, accompanied by headlines of doom and gloom in the press. However, when measured against the historical record, the current peak-to-trough decline for the S&P 500 Index ranks as a relatively common event." Click here to see the full report: https://lnkd.in/ggbzHRzp

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Marathon Asset Management is pleased to announce the reset of Marathon CLO 2020-15. The reset reinstated the CLO's reinvestment period for another five years and upsized into a $462 Million structure. The fact that a CLO manager has the ability to lower its liability cost via refinancing, while also extending maturities through a reset is one more factor while CLO Equity is viewed as a compelling investment opportunity. Resets and refinancings have the potential to add additional cash-flow that accrues to the CLO Equity.

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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

My latest Substack post analyzes $XOM once again catching $TSLA in terms of market cap. Last 5 qtrs: $XOM returned ~$40bb to shareholders via divvies, buybacks. $TSLA: $0.00 That is what really matters. But the key to investing is the second derivative, and as EV sales slow (good for demand for oil, obvs, and for $XOM) I fail to see the Silver Bullet for $TSLA. Why? Because Elon let his product line get old. No amount of robotaxi/FSD necromancy is going to change that. Trade accordingly. Excelsior! --Jim

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The pricing of the AIMCO CLO 10 reset was impressive. This reset is accretive, as the deal’s WACC tightened slightly from 177.6 bps to 176.9 bps, and an additional 5 years of reinvestment period were added to the deal. In fact, its reset WACC was the tightest year-to-date in both the reset and primary markets at the time of the pricing. Please note that this premium article is behind a paywall. Allstate #CLO

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Skate to Where the Puck is Going: Asset-Based Lending (ABL) allocations by institutional investors will rise dramatically over the coming decade as a huge percentage of the asset class shifts from banks and private markets. The little kid on the private lending block is all grown up now, as ABL is taking center stage with Direct Lending. A smart alpha strategy for capital allocators is to craft a portfolio of top performing managers across the Private Credit spectrum (Direct Lending, ABL, Opportunistic Credit) that can deliver strong, repeatable results. ABL is a $40T TAM, much larger in size than most imagine. Most portfolios are tied to corporate risk as the majority of portfolios are comprised of Public Equity market risk, Private Equity risk (LBO, Growth, VC) and Corporate Direct Lending. ABL offers diversification and low correlation to the equity markets. Pension plans, insurance companies and endowments/foundations and their consultants are cleverly re-evaluating their portfolios to build a more diversified, better insulated Private Credit portfolio, and part of this solution requires a greater allocation to ABL as this strategy has historically exhibited high absolute returns plus it has lower volatility when compared to the equity markets. Pension & Investment News just published a lead article of my interview covered by Lydia Tomkiw - I greatly enjoyed our engaging conversation:

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📰Reuters quoted us yesterday afternoon regarding AMAT's #earnings, #outlook, and aftermarket share-price reaction in an article by Jaspreet Singh titled, "Applied Materials' third-quarter forecast disappoints investors, shares fall." 👩🏽‍💻Applied Materials stock reported earnings and outlook yeasterday after market close. #AMAT is up over 32% year-to-date, more than 3x the #NASDAQ 100 (#QQQ) and just under 3x the S&P 500, thus expectations for it were high and aftermarket short-term investors nudged the share price down because they were looking for a more solid beat and outlook; yet even so, shares were still priced higher than they were on Monday and Tuesday as well as the month prior to that➡i.e.,overall things still look good. ⚙The aftermarket crowd seemed to be pushing the price down more than deserved. With results beating expectations, we predicted that if the general market opened up on Friday there was a good chance that the stock recover some of its overnight drop➡which it did and then some. 📈What created reluctance amongst traders was the wide third quarter forecast range management gave of adjusted earnings per share for the third quarter of $1.83 to $2.19; that nearly 40 cent window creates short-term negative uncertainty for the semiconductor equipment company➡but it doesn't derail the thesis of increased computer chip demand. QUOTED EXCERPT: 💡"Investors are nudging the share price down because they were looking for a more solid beat and outlook," Michael Ashley Schulman, chief investment officer at Running Point Capital said, adding that the results do not knock "the wind out of a #semiconductor #chip recovery theme". "Les #investisseurs font baisser le prix de l'action parce qu'ils attendaient un résultat et des #perspectives plus solides", a déclaré Michael Ashley Schulman, directeur des #investissements chez Running Point Capital, ajoutant que les #résultats ne remettaient pas en cause "le #thème de la reprise des puces à semi-conducteurs". #future #uhnwi #multifamilyoffice ~~ "We deliver custom investment solutions, family office services, innovations, and unique perspectives to you and your family—we are your family office—you can emphasize your enjoyments, priorities, and legacy.” ~~ Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-24-78

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𝗕𝗿𝗶𝗱𝗴𝗲𝘄𝗮𝘁𝗲𝗿 𝗼𝗽𝗲𝗻𝘀 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝘁𝗼 𝗿𝗲𝘁𝗮𝗶𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗦𝘁𝗮𝘁𝗲 𝗦𝘁𝗿𝗲𝗲𝘁 𝗘𝗧𝗙 https://lnkd.in/dCYdE-zK   Risk parity funds for retail investors have not worked well over the past decade or so (and Bridgewater’s All-Weather strategy has also underperformed for some time): the pioneer in the industry (Wealthfront Risk Parity Fund with $1.3bn in AUMs) is going to be liquidated in January https://lnkd.in/dya2H6SZ , and other products have also failed to beat a simpler 60/40 strategy.   This despite the carnage in bond markets in 2022 and the elevated asset correlations (or, more likely, because of…).   I guess it all boils down to the specific strategy used: this product will also use leverage in an ETF, so it will be interesting to see how it plays out. 

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Our new series: “CONVERSATIONS FROM THE @CBOE FLOOR” will be all about EDUCATION. THE 🥐RUMBS… We will look to pull back the veil on the options industry, DEMOCRATIZING & DEMYSTIFYING what’s actually going on behind the scenes. I couldn’t think of a better place to begin than @CBOE’s exclusive, industry-insider-only RMC conference. In this initial episode we’ve curated some of the most important topics going on in Optionsland right now, brought to you by some of the foremost experts. ————————————————— ⁃The election & what option markets are seeing ⁃The boom in options based ETF’s + structured products ⁃The evolution & opportunities in 0 DTE trading ————————————————— 👂 IN & ✅ IT OUT…👇👇👇👇👇👇

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In this week's news highlights, dive into: -A graphic visualizing the new and current U.S. tariffs on Chinese imports -How to navigate the FTC's ban on non-competes -Whether electric woks can produce great stir-fry -Maine's new 'trust fund' to fight climate change Check out more here: https://lnkd.in/gTvAiQhK #WealthManagement #NonCompetes #USTariffs #AssetAllocation

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The Machine is Working Well The CLO machine is cranking out deal flow at a steady pace that is well ahead of 2023. CLO global new issue volume will likely exceed $225B (~$180B through Q3/’24), which is well above $144B issued in 2023. AAAs are trading at their tightest spreads of the year, and this not only includes BSL, but also privately issued loans. CLO issuance in the U.S. has been running at a pace of ~4x the issuance in Europe. There are ~100 credit managers issuing CLOs in U.S. market and ~50 managing CLOs in Europe. The CLO market is open for business. CLO managers are evaluating >600B+ originally issued in 2018-2023 to assess the value-add of a potential 5-year additional maturity reset with added potential to tighten spreads on their liabilities which can be a big boost for CLO equity returns. Looking forward, the next vintage of CLO deals looks favorable as expectations for improving credit metrics will likely result in lower default rates in the next 2 years compared with the past two years. The CLO machine is working well, cranking out deals as AAA-BB tranches are performing strongly, while the Equity tranche is generating impressive cash flow.

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Monitoring and discussing structured note holdings just got easier for financial advisors. Through the CAIS platform, you can now easily identify and export issuer concentrations, underlier allocations, structure type dispersions, and time-to-maturity of structured note holdings. Log in or sign up for the CAIS platform here: https://lnkd.in/gAynvWEz

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MSO earnings season starts this week, with eight of the top ten US operators reporting. Consensus analyst expectations are for the top ten MSOs to show a Q/Q 2.62% contraction in revenue and adjusted EBITDA to decline 6.18%. (1/3) The top ten MSOs' Y/Y revenue is expected to grow by 3.20%, and AEBITDA is expected to expand by 17.30%. Analysts predict the highest Y/Y revenue growth for Ascend Wellness Holdings (CSE: AAWH.U / OTCQX:AAWH) at +22.40%, and Cresco Labs is predicted to have the best Y/Y improvement in AEBITDA at +62.00%. Finally, here are some of the companies reporting this week: May 7: Ascend Wellness Holdings (CSE: AAWH.U / OTCQX:AAWH) May 8: Green Thumb Industries (GTI), Verano, MariMed, Inc. May 9: Curaleaf, Trulieve, TerrAscend, Cannabist, Jushi Holdings Inc. Source: FactSet

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Notes From the Desk – Tracking Trends: CAD CPI on the Downward Path   Governor Macklem and Co. are going to be pleased with the March CPI data.   By the numbers.   - Headline CPI 2.9% (2.9% expected) - CPI Median 2.8% (3% expected) - CPI Trim 3.1% (3.2% expected)   Implications.   At their last meeting, the Bank of Canada (BoC) stressed that while happy with recent inflation data, they still needed more proof that price pressures were abating. Today’s numbers provide further evidence that pricing behaviour is normalizing. The average of the core measures is now below 3% (2.95%.) On a three-month annualized basis, the core measures are tracking below 1.5%   Today’s data opens the door just a bit wider for the BoC to cut rates in June or July.  

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