minor nit, a covered call would reduce returns if you’re bullish. what you’re describing (buy more tech than index which already had a lot) is more like Texas hedging. the most bullish options trade of this sort you could do is a risk reversal - sell a put (bullish) and buy a call (also bullish)
btw @profplum99 Michael Green (who has a substack also and is a strategist at a new entrant ETF sponsor that works closely with PIMCO) is very famous for a similar and much more extensive passive thesis
Yes I think I was thinking of a case where I’m betting it does well enough to attract calls but not well enough to trigger, resulting in free money. It sounds like threading a needle but I think it’s often a robust strategy. There’s a lot of irrational exuberance around but not enough to move markets unless you’re talking meme stocks. But fair enough. Imperfect analogy.
Is there a political dimension of this as well where we had the End of History Fund and could afford to be quite passive in our political commitments so long as we were invested in one of its growing number of liberal democracies, but now it appears we became so lazy that full-retard populism and autocrat fetishism build up to levels that may crash the historically strong returns, and require a return to effortful, creative political engagement? Or will these flare-ups only cement the election of Mark Carney style neoliberals and entrench the fund's returns for many more years of laziness?
Lol EoH fund. I think we’re going to see quiescent state liberal democracy with periodic neopatrimonialost flare-ups. The world is too complex to actually run with any OS besides liberal democracy. Modulo China.
just getting to this, enjoying it
minor nit, a covered call would reduce returns if you’re bullish. what you’re describing (buy more tech than index which already had a lot) is more like Texas hedging. the most bullish options trade of this sort you could do is a risk reversal - sell a put (bullish) and buy a call (also bullish)
btw @profplum99 Michael Green (who has a substack also and is a strategist at a new entrant ETF sponsor that works closely with PIMCO) is very famous for a similar and much more extensive passive thesis
covered calls could get your stock called away if it does well, where a sold out would be “free money” as it expires worthless
Yes I think I was thinking of a case where I’m betting it does well enough to attract calls but not well enough to trigger, resulting in free money. It sounds like threading a needle but I think it’s often a robust strategy. There’s a lot of irrational exuberance around but not enough to move markets unless you’re talking meme stocks. But fair enough. Imperfect analogy.
yeah i'm just saying Texas hedging is almost the perfect term here because you're increasing the risk in an opinionated way
I think that may be beyond the literacy level I’m willing to acquire just to make a metaphoric comparison 😂
Great title.
Is there a political dimension of this as well where we had the End of History Fund and could afford to be quite passive in our political commitments so long as we were invested in one of its growing number of liberal democracies, but now it appears we became so lazy that full-retard populism and autocrat fetishism build up to levels that may crash the historically strong returns, and require a return to effortful, creative political engagement? Or will these flare-ups only cement the election of Mark Carney style neoliberals and entrench the fund's returns for many more years of laziness?
Lol EoH fund. I think we’re going to see quiescent state liberal democracy with periodic neopatrimonialost flare-ups. The world is too complex to actually run with any OS besides liberal democracy. Modulo China.
btw came to scroll aggressively thru your substack posts for takes on india pakistan situation lol
Not a topic I’d post about publicly
read this story? https://en.wikipedia.org/wiki/The_Little_Black_Bag
most of the world is passive here, but cyril found a solution...