Steve Cohen’s top lieutenant on training good portfolio managers, reinventing the culture at SAC Capital (the real-life “Billions”) and how hedge funds can create more alpha in volatile markets w/ Perry Boyle
Decoded with Ryan Pallotta
How Do You Diversify Your Portfolio?
The three things that drive your opportunity set as a portfolio manager in a long short portfolio are volatility. You also want liquidity so that you can trade in and out of them without moving their stock price. And then you don't want the names to be too correlated because if every name is going up at the same time, it's really hard to run a hedged book. So our, you know, our Power Allies tended to be consistently technology, healthcare, and some consumer spaces along with some of the industrial spaces and some of the energy spaces. That's interesting. How did you guys play into diversification? And did you find that sometimes diversification could maybe hurt you if you were too
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