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part of the ThirdBear collective
part of the ThirdBear collective
Stewardship and development of real assets (real estate, commodities). Btw:-- the correct order of asset classes (as revealed to Moses on Mt Sinai) goes:-- real estate, commodities (Energies, Base Metals, Precious Metals, Softs/Ags, Livestock), currencies (and cash equivalents), bonds, collateralized debt obligations (i.e. the note tranches of an asset-backed securitization), credit-default swaps, stocks. Always, government issues (e.g. govies or munies, or linkers, or "inflation"/"breakevens" which are just long linkers hedged by short govies, and provide a way to bet on rising or falling expected inflation, which is correlated with rising or falling realized inflation) precede corporate issues (and corporate bonds precede consumer loans), developed-market securities precede emerging-market securities, and exchange-traded securities precede unlisted assets (e.g. Twitter equity---which used to trade as NYSE:TWTR---got demoted once Elon took it private). Derivatives (futures, forwards, swaps, options, swaptions) immediately follow their underlying, followed in turn by passive-market / index trackers (e.g. NASDAQ:MSFT, MSFT calls, SPX ETF's, SPX futures). Swap spreads (which allow you to bet on credit-default risk of a private counterparty by picking up on the basis between an interest-rate swap with the counterparty and the corresponding govie, and which blew out during the 2008 GFC) are probably last. Actively-managed accounts (including any active ETF, mutual fund, or hedge fund -- whether systematic or discretionary) are not really an asset class according to this hierarchy, it's more illuminating to think of them as vehicles in which you can hold assets; But we can still order the core strategies as TS ("timeseries", AKA directional) and the overlays as XS ("cross-sectional", AKA relative-value). Sometimes you have to make a call. Where does THRM 2022-2 R, the "residual" of a consumer-loan-backed securitization, belong? I'd consider it levered consumer-loan exposure (with the weighted-average coupon on the note tranches being the cost of financing), which puts it just between CDO's and CDS's. But technically, it's equity in the securitization trust (with the notes being debt), which is an unlisted company, so you could make the argument that it's actually PE. Or, where does TSLL, Direxion's 1.5xTSLA ETF, belong? I'd put it with plain-old stocks, not active ETF's. foggyBLUESHIFT.
We design and engineer stuff. foggyLIB, foggyQUX, foggySTATSLIB, foggyML, foggy949, foggyDEMO, foggyARC.
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