3min chapter

Flirting with Models cover image

Liquidity Premium with Adam Butler (S1E8)

Flirting with Models

CHAPTER

The Central Limit Theorem

I think sometimes there's ways to introduce complication or complexity into your portfolio that is truly to mitigate risk, right? So we do the continuous rebalancing. We call it tronching, where we're going to have a holding period of one month, 21 days. And in trying to do that, we are trying to avoid the timing lock that would be associated with just happening to rebalance month. But I won't call it back of an app in math because it took me quite some time to drive but my math shows if you sort of quantify this timing lock for every tronch that you add, you divide the timing lock by the number of tronches. It

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