my business school project that went too far was drawing up a business plan for an escort service. (I'm too proud not to mention it; My target clients were high earning women with high BMI's and I was supplying hot guys with culinary skills for private home dinner dates, called it "Cooks with Looks")
The problem with having hedge strikes at -40% isn't that they're unlikely to be worth anything, the problem is that if they "pay off", then all they're doing is capping your long portfolio losses at -40%. It's like buying insurance and declaring your house is worth only 60% of its actual value so you can pocket the cost savings. it works most of the time...
@@andrewjackson82if the market moves rapidly in the correct direction, out of the money options will give you higher returns than at the money or in the money. Odds are much lower to profit though.
It was a short vol strategy that broke due to insufficient hedges if vol moved higher. Whilst there was clear fraud on getting investors into the fund, the performance of the fund would have been the same regardless as this was the investment strategy. Also, makes you wonder about what the compliance department were doing not reviewing marketing material that was fabricated.
@@nickmckenna2801 all marketing to retail and presentations have to be signed off by marketing. You might of thought they would have noticed the risk/rtn numbers were altered. Wouldn't take much to look at internal fund pricing systems to check rtns at least.
We merely reinterpreted the data, no fraud here. Don't make me sue you bro, we may be broke but we handed a huge amount to lawyers to cover our ass before the implosion hit.
when owning the underlying, I've found the best way to hedge against a downturn is to sell calls against those shares with a delta no greater than 0.30, then buy puts at the money or at least above your adjusted cost basis if you've been using your position to generate premiums since acquiring the underlying.
@@dustinnguyen6494 closer to the money for those sold calls to offset cost of bought puts at the money. Strikes of those sold calls can be adjusted up of course, but that would mean spending more.
@@Hidavi It's something one shouldn't look for. Anything that is actually very profitable will immediately see a jump in value so the future return is low percentage compared to the valuation. Only those who went in before it was certain (and therefore had risk) will benefit from the high probability
ironically investing in something boring like an S&P500 tracker would be low fee and over the long term a solid performer. Anyone managing a pension fund however may like to be wooed by financial giants who may do whatever it takes to get their business. Weak link is people as always!
Is it just me or do the fees always seem higher when foreign companies are involved and that US banks only get a slap on the wrist and are allowed to keep the illegal gains? Don't get me wrong, I like it when a company has to pay for their wicked shenanigans, it just seems to me that US companies get treated much more lightly by the US investigators
6.35 not factual. Even though strikes are 50% of current spot, a sharp drop like in March 2020 though less than 50% drop will cause these deep out of money puts to also surge in price due to volatility spike and increased probability that they might get in money
The only reason the penalties were so high is because Allianz isn't American. If this was an American bank, they'd get a slap on the wrist and "bad dog", admitting to nothing.
@@d_all_in How is that related? I know US banks get penalised as well but the penalties are far lesser. This is because the FED, US government agencies and banks are best friends and help each other when possible. Take a look how Cohen's SAC Capital was blatantly using insider information for years and Cohen walked free, only some lowly employee got penalised. This was far far worse anything Allianz did.
What I've learned so far from these WSM videos, is... ...don't trust big banks and institutions with your money. ...the safest bet to become rich(er), is to scam everybody else.
So basically playing with options using other people's money, and using eloquent marking buzzwords to hide it. Sounds like Wallstreet bets with a more creative vocabulary 🤔.
Love WSM and love binging it here on YT. But I suggest you can just say “this episode” rather than “video and podcast” and “if you’re listening from Spotify or Apple podcast.” Understand that you’re now branching out to the podcast medium but it sounds odd and takes me out of it when I’m watching it on RUclips. Can just add a line at the end saying that the content is available both on YT and via podcast. Anyway a little advice.
i have haves said to thing is when i come to investing look at etf performances then pick the companies in them as single holdings boom eft wit out the management fees and typically better performance and you can pick the best holding in each etf and see what they hold collectively write puts for for free money
The problem being ETFs do block trading, meaning the cost per share bought for them is a tiny fraction as it is for you. Ergo, you will likely get the same performance as a passive ETF. Meaning active ETFs and closed end funds are often invested in exotic or illiquid assets (like private equity and swaps) that you simply don't have access to. Although it is worthwhile to assemble your own ETF if you want.
So tired of people blaming CaPitaLiSm for everything as if the most successful system in human history is broken. Let me guess, you're a socialist despite every socialist state being a total shithole.
have you been grocery shopping lately? Things are already ugly. The best bet for anyone with a brain is to get in on a passive income stream while you still can, doesn't matter which one it is just get on it and stay committed...
Bro, I hope the absolute best for WSM. It feels like a business school project that went too far and I love it
my business school project that went too far was drawing up a business plan for an escort service.
(I'm too proud not to mention it; My target clients were high earning women with high BMI's and I was supplying hot guys with culinary skills for private home dinner dates, called it "Cooks with Looks")
@@AlexanderTheGoodEnoughdamn that's good.
Great way to put it haha. Great channel
@@AlexanderTheGoodEnough sick
So, 22% to 12% is not 10% less. It's 10 points less. 22% to 12% is cutting it by nearly 50%.
4:00 Shorting volatility is like picking up change from railroad tracks. Super profitable, as long as you can evade the oncoming train.
I don't get the analogy fully. Are there any coins on railroad tracks or are you making a hypothetical situation?
@@tomlxyz bruh how do you not get it
@@tanner9956 ,😂😂😂😂
So with all that fraud did anybody go to jail?
Don't be silly. That would protect the public.
It's a club
Jail is for poor people, he will get a slap on the wrist fine.
Lol jail?
@@Drago-fc3zl why would they🤔 Welcome to America 🕺
So I guess at the end of the day we're all just a bunch of degenerates doing YOLOs with our or somebody else's money.
I swear i never miss one of video, i even searched your old video
When you yolo so badly the SEC and Justice department get involved...
The problem with having hedge strikes at -40% isn't that they're unlikely to be worth anything, the problem is that if they "pay off", then all they're doing is capping your long portfolio losses at -40%. It's like buying insurance and declaring your house is worth only 60% of its actual value so you can pocket the cost savings. it works most of the time...
Agree…I can never see the value in out of the money options 🤷♂️
@@andrewjackson82if the market moves rapidly in the correct direction, out of the money options will give you higher returns than at the money or in the money. Odds are much lower to profit though.
It seems like everytime you see these huge blow ups, the investors are pension funds. The creation of tax code 401k is wonderful thing.
If I was shown this chart 3:29 I would have walked out of the investment meeting. 😂
For real, wtf is that shit 😆
I actually grew up with Greg’s kids. This is crazy!
Alpha is not a "general term". It is a specific mathematical quantification of the excess return of a given investment relative to a benchmark.
It was a short vol strategy that broke due to insufficient hedges if vol moved higher. Whilst there was clear fraud on getting investors into the fund, the performance of the fund would have been the same regardless as this was the investment strategy. Also, makes you wonder about what the compliance department were doing not reviewing marketing material that was fabricated.
They were complying, duh, they’re called the compliance department
@@nickmckenna2801 all marketing to retail and presentations have to be signed off by marketing. You might of thought they would have noticed the risk/rtn numbers were altered. Wouldn't take much to look at internal fund pricing systems to check rtns at least.
We merely reinterpreted the data, no fraud here. Don't make me sue you bro, we may be broke but we handed a huge amount to lawyers to cover our ass before the implosion hit.
when owning the underlying, I've found the best way to hedge against a downturn is to sell calls against those shares with a delta no greater than 0.30, then buy puts at the money or at least above your adjusted cost basis if you've been using your position to generate premiums since acquiring the underlying.
can u explain why choose delta less than 0.30 thank you
@@dustinnguyen6494 closer to the money for those sold calls to offset cost of bought puts at the money.
Strikes of those sold calls can be adjusted up of course, but that would mean spending more.
Shouldn't it been a clue, when they were getting high return with low risk?
yes but its also exactly what they were looking for so that cancels out the suspicion
@@Hidavi It's something one shouldn't look for. Anything that is actually very profitable will immediately see a jump in value so the future return is low percentage compared to the valuation. Only those who went in before it was certain (and therefore had risk) will benefit from the high probability
ironically investing in something boring like an S&P500 tracker would be low fee and over the long term a solid performer. Anyone managing a pension fund however may like to be wooed by financial giants who may do whatever it takes to get their business. Weak link is people as always!
More like "Low risk, high returns you say. Where do I sign?" Amirite?
I fr just wanna say that your channel is awesome, I signed up for your newsletter and appreciate every video you put up here!
Keep up the good work. Thanks for educating us. My favorite youtube channel these days.
Is it just me or do the fees always seem higher when foreign companies are involved and that US banks only get a slap on the wrist and are allowed to keep the illegal gains?
Don't get me wrong, I like it when a company has to pay for their wicked shenanigans, it just seems to me that US companies get treated much more lightly by the US investigators
Exactly like Monsanto only got into trouble after it was acquired by Bayer, although it was already in the spotlight for many years before.
So what ended up happening to the rogue portfolio manager? I feel like this should have been addressed in the video.
I agree. The channel seeks self protection.
Some justice achieved. Incredible!
Wow imagine having your pension lose over 90% of your investment in such a short amount of time. Crazy. It’s like Vegas.
Wow. That is crazy.
Greg Tornant looks like an alternate Dave Franco pursuing a finance career.
6.35 not factual. Even though strikes are 50% of current spot, a sharp drop like in March 2020 though less than 50% drop will cause these deep out of money puts to also surge in price due to volatility spike and increased probability that they might get in money
The only reason the penalties were so high is because Allianz isn't American. If this was an American bank, they'd get a slap on the wrist and "bad dog", admitting to nothing.
Actually the majority of fines levied against banks are by the US government. 99% of sactions violations are prosecuted by the US.
@@d_all_in How is that related? I know US banks get penalised as well but the penalties are far lesser. This is because the FED, US government agencies and banks are best friends and help each other when possible.
Take a look how Cohen's SAC Capital was blatantly using insider information for years and Cohen walked free, only some lowly employee got penalised. This was far far worse anything Allianz did.
Did I miss the part where people went to jail?
It sounds like they wanted to run a hedge fund but legally couldn't.
High return and low risk, perpetual motion machine, snake oil, etc...
How about more success stories rather than failure, Wall Street Millennial?
I subbed at under 20k i cant beleive how much you have grown keep it up bro
same egos and impatience as Long Term Capital Management in the 90's
High returns low risk?😳
Your name is James Chen.
Greed is everywhere these days,😥
Always
More like fears
The website is gone 😓😥
What I've learned so far from these WSM videos, is...
...don't trust big banks and institutions with your money.
...the safest bet to become rich(er), is to scam everybody else.
One of the safest things to do with your money is store it as USD in an US American bank or credit union's checking or savings account.
@@StephenGillie no bc inflation
Don’t mind me just boosting the RUclips algorithm
Why do pension funds always get into these weird funds had they just got into a normal S&P 500 ETF theyd been fine
Well between Deutsch Bank and Allianz it seems that the german finance industry got crushed.
the words disaster and option are often are together
What if you go short on disaster options?
@@tomlxyz what a dumb question
The guys thumbnail pic looks like he uses crisp $100 dollar bills to clean his teeth 😬
Some jail time coming up for those clowns
nice video!
Alpha is the return in excess of systematic risk factors .....
So basically playing with options using other people's money, and using eloquent marking buzzwords to hide it. Sounds like Wallstreet bets with a more creative vocabulary 🤔.
What percentage of the lost money from the pension funds and investors was recovered?
every time a billionaire loses all their money an angel gets its wings
Love WSM and love binging it here on YT. But I suggest you can just say “this episode” rather than “video and podcast” and “if you’re listening from Spotify or Apple podcast.” Understand that you’re now branching out to the podcast medium but it sounds odd and takes me out of it when I’m watching it on RUclips. Can just add a line at the end saying that the content is available both on YT and via podcast. Anyway a little advice.
Performance fees 🧐😳
Advanced investment strategies 😂
r u a bot?
Just wow
so no one went to jail...
How much jail time was that?
Heads I win tails you lose 😮
These people should go to hell instead of jail.
Who signed off on this bs? 👏
The best way to become a millionare is to start as a billionare and take advice from the internet.
Hedges didn’t hedge 🧐😳
$6billion in fees😎😉🧐
I’ve done this with 10k, it hurts but it is what it is
U still down?
the more complex the strategy, the higher the risk.
These people RARELY go to jail, and if they do, not for long. Hence why lying to investors is so common..... shady state....
Disgusting. Capitalism needs reform.
I like selling puts.... And keep on rolling baby.
KEEP ROLLING ROLLING ROLLING WHAT
Heads I Win.
Tails You Lose.
Excess returns?! 😎
i have haves said to thing is when i come to investing
look at etf performances
then pick the companies in them as single holdings
boom eft wit out the management fees
and typically better performance
and you can pick the best holding in each etf
and see what they hold collectively write puts for for free money
The problem being ETFs do block trading, meaning the cost per share bought for them is a tiny fraction as it is for you. Ergo, you will likely get the same performance as a passive ETF. Meaning active ETFs and closed end funds are often invested in exotic or illiquid assets (like private equity and swaps) that you simply don't have access to.
Although it is worthwhile to assemble your own ETF if you want.
Advanced investment strategies lmao 😂
Lucrative fees 🧐
Options are just financial WMDs.
The fastest way for a retail trader to make rich is options... equity investments have a higher risk level than options
Did these people have to go to college to learn this or is fraud in their genes.
Elite 😳
Crooks lol
Thats capitalism, everything goes well, the guys on top benefit, everything goes to shlt, the guys at the bottom suffer ...
Capitalism is opening a highly profitable pizza shop cause you’re an awesome pizza maker. This is just plain theft.
So tired of people blaming CaPitaLiSm for everything as if the most successful system in human history is broken. Let me guess, you're a socialist despite every socialist state being a total shithole.
Investing based on volatility is a profitable game of Russian roulette.
the more i see hedge fund video the more i realise they sems to more and more like degen gamblers
YOLO = You only live once?
Yes
Alpha beta screwa 😉
3 comment
So Fraud.....
😂
First comment....yay!!!!
U beat me by 27 seconds😓
have you been grocery shopping lately? Things are already ugly. The best bet for anyone with a brain is to get in on a passive income stream while you still can, doesn't matter which one it is just get on it and stay committed...
And what fraud might you commit with our money?
Sept 15 (Reuters) - A U.S. judge on Thursday set a 2024 trial date for former Allianz SE (ALVG.DE) executive Gregoire Tournant
$trka about to run news on earnings coming Monday thank me later...💯🦍🦍🦍🔥🔥🔥🔥🚀🚀🚀🚀🚀