Merger arbitrage is one of the *most* lucrative yet dangerous endeavors on Wall Street. The strategy appears enticingly simple: buying the stocks of companies that are going to be acquired by other companies, with the hope of profiting when the merger closes. Yet in practice, the undertaking can present the would-be arbitrageur with disastrous losses should the deal not go through. Success in merger arbitrage hinges on ascertaining whether or not the deal will close, and in this interview, Deepak Gurnani, founder and managing partner at Versor Investments, shares his rigorous systematic merger arbitrage framework for estimating that critical probability. Gurnani also shows how to use his quantitative tools to augment and de-risk global macro investment strategies by exploiting asset return dispersion within stocks, bonds, and commodities. Interviewed by Real Vision’s Jack Farley.
Sep 28, 2021
Ethereum 2.0 and Its Developments Explained
Ryan Berckmans, investor and Ethereum community member, joins to discuss. Berckmans provides us with a deep dive into the London Hard Fork and EIP 1559, which are changing the structure behind gas fees on the network. He also lays out the timeline and describes the many hurdles that are involved in Ethereum’s transition to phase 2.0, where the network will utilize a proof-of-stake consensus algorithm. While this shift will undoubtedly make Ethereum more scalable, will it have negative implications for the chain’s security and validity? Tune in for Berckmans’ explanation. Interviewed by Ash Bennington on September 9, 2021.
Jeff Snider: Understanding the Shadow Banking System
Jeff Snider, head of global research at Alhambra Investments comes back for Round 2 with Real Vision's Maggie Lake to give us a master class in money supply and explain why central banks are doomed to fail when it comes to reviving global growth. He also weighs in on China's Evergrande problem and whether cryptocurrencies are the answer to our current economic woes. Filmed on September 23, 2021.
Michael Gayed, portfolio manager at Toroso Investments, LLC, and Darius Dale, founder and CEO of 42 Macro, discuss how risk works in both directions. The pair explore how to think differently about markets, making a case for a more nuanced understanding of the sequence vs. focusing on the ultimate goal of making money. They take a closer look at repeatable processes such as buy and hold strategies and market timing as well as lumber and gold as symptomatic indicators of markets and the wealth gap. Filmed on September 13, 2021.
President of Bianco Research Jim Bianco meets up with Ben Breitholtz, data scientist at Arbor Data Science, to take an in-depth look at the impact data science has on the markets. Through a series of charts and graphs, Bianco and Brietholtz walk viewers through Natural Language Processing (NLP), Machine Learning, and Search Activity. Bianco and Breitholtz also examine how these concepts translate into actionable information for traders and explore the role data analysis plays in trading and interpreting policy. Filmed on September 8, 2021.
Does the world truly need central banks? And what would a financial system without central banking look like? This is the question that Dylan Grice, co-founder of Calderwood Capital, and George Selgin, director at the Cato Institute's Center for Monetary and Financial Alternatives, explore in this in-depth, peer-to-peer conversation. Together, they survey historical examples of "free banking," examine key turning points in the development of the monetary system as it's known today, and imagine its potential future. Filmed on September 7, 2021.
Offsetting Interest Rate Risk with Options and Long Vol
After over a decade of massive deflationary forces, the tides may be turning as various demographic and political factors align. How can fixed income investors hedge against inflation and interest rate risk? Nancy Davis, CIO of Quadratic Capital, shares her insights with Larry McDonald, New York Times best selling author and founder of The Bear Traps Report, by examining the inadequacies of existing measures of inflation and how her IVOL ETF implements optionality and long volatility to mitigate potential drawdowns in fixed income investments. Filmed on August 25, 2021.
Why the Path to Decarbonization Includes Fossil Fuels
Rob West, CFA, CEO and lead analyst at Thunder Said Energy, is focused on finding the most realistic and cost-effective manner of reaching net-zero carbon by 2050. Unfortunately, he sees major discrepancies between the path his research suggests society should head down and the path being pushed by policy makers. West explains what is driving these differences, the biggest issues that should arise if we don’t change course, and exciting and investible technologies and methods that he believes will be necessary to power an effective and cost-efficient energy transition. Interviewed by Max Wiethe on September 1, 2021.
Sep 02, 2021
BitMEX CEO on the State of Crypto
Many have heard of the controversies surrounding BitMEX. Alexander Höptner, CEO of BitMEX, joins to clear the air and discuss the state of the industry. BitMEX, a peer-to-peer crypto trading platform, is currently prohibited from working with customers in the US. Höptner touches on why this is the case in addition to providing insights into a range of topics including tokenization, the peer-to-peer revolution, regulation, and more. Höptner also provides an insider perspective into the degree of leverage he’s seeing in crypto. Interviewed by Ash Bennington on August 27, 2021.
Jeff Snider: The Bleak Reality Facing Global Growth
As the reflation trades cools down and the economic data begins to roll over, Jeff Snider, head of global research at Alhambra Investments, anticipates an ugly, near-term outcome for growth. In this conversation with financial journalist Maggie Lake, he explains how bonds and financial conditions have been signaling a return to the environment of the pre-2020 economy—low growth within a fragile monetary system—except that it is "even more materially harmed" now than it ever was before. Filmed on August 19, 2021.
The conditions for a precious metals bull market – deeply negative real rates and ballooning government deficits – are here, so why do gold and silver appear to have hit a speedbump? This is the question explored by veteran macro investor Michael Nicoletos and Tavi Costa, portfolio manager at Crescat Capital. Costa notes that the Federal Reserve is trapped between inflation and deflation, or as he calls it, “a tale of two destructive outcomes,” and he argues that the Fed’s inclination to continue to suppress rates will serve as a ballast for precious metals. Nicoletos explains why, when major central banks conduct quantitative easing (QE) together, moves in currencies are suppressed, so the truly big swings occur in real assets in addition to equities. The pair also explore gold’s potential vulnerability to being replaced by crypto as well as the risks they see in the Chinese economy and market structure. Filmed on August 26, 2021.
Aug 30, 2021
Big Law on Crypto: The Regulatory Outlook
Founded in 1893 and now the fifth largest law firm, Jones Day is pioneering crypto litigation. Mark Rasmussen and Joshua Sterling, partners at Jones Day, join Santiago Velez, entrepreneur and digital asset investor at Block Digital Corporation, to discuss. While there are those who posit crypto cannot be regulated, it is important to stay abreast of what central planners are attempting to do as they may not be able to squash crypto entirely, but they can have an impact on the price. Rasmussen and Sterling, two veterans in the legal space, provide valuable insight into what regulators are thinking and which regulatory bodies will take jurisdiction over crypto. Rasmussen also shares his experience representing the defendants in the first ever anti-trust case within crypto back in 2018. Filmed on August 18, 2021.