In previous posts, I’ve discussed our reasoning for why we believe the global economy is in the later stages of the business cycle. The next part of the cycle is a recession. I’ve been discussing this risk since the start of the year when our macroeconomic model first began to raise... Show More
Let’s start by reviewing what the yield curve actually is. Consider a range of durations for government notes, for example, you can have 3-month notes, 1-year notes, 2-year notes and so on up to 30-year bonds and notes. Show More
In my last blog, I provided an overview of Vega Capital’s model for identifying and pre-empting recessions in the United States. Last Thursday (at WeWorks Martin Place), I presented a talk on how our model would have approached the Great Depression and other recessions. The former is what I’ll be... Show More
In my last Livewire post, I commented that The Vega Fund would be looking closely at economic data over the coming months to determine whether it should remain long (and weather out what I believe is a temporary correction) or whether going short would be a viable option. Show More
Today I wanted to provide some depth on how we use VIX products to manage risk in The Vega Fund portfolio. As far as we know, we’re the first fund in Australia to hedge in this particular fashion and hence some clarity is warranted. It’s not the only tool in... Show More
As Peter Lynch once famously said “You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets”. Today I’m going to discuss some ways in which investors can protect their portfolios from downside risk. Show More
We use derivatives across the majority of our portfolios to improve performance and / or to reduce portfolio volatility. They help us consistently beat the market over time and improve the overall flexibility within our portfolios. We are almost entirely ‘sellers’ of options, and the bulk of our transactions are... Show More