Jason C. Buck on volatility, options, crises, crashes, value and reasons to be optimistic | S06 E47
Dec 23, 2024
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Jason C. Buck, Portfolio Manager of the Mutiny Fund, dives into the intriguing world of volatility and tail risk strategies. He highlights innovative ways to balance offensive and defensive assets to shield portfolios from downturns. The conversation extends to MicroStrategy's bold Bitcoin moves and the implications of institutional players in the crypto space. Buck also discusses the hurdles value stocks face amidst market turbulence, encouraging a strong focus on fundamental analysis. Lastly, he champions the rise of young entrepreneurs venturing into defense technology, paving the way for exciting advancements.
Jason Buck advocates for blending offensive and defensive investment strategies to build resilience in portfolios during market downturns.
The limitations of traditional diversification are highlighted, emphasizing the need for strategic asset allocation to navigate varying market conditions.
Cal Newport's productivity principles promote quality-focused work over performative busyness, encouraging a rethink of traditional productivity metrics.
Deep dives
AI Conversations with Google Gemini
The discussion introduces the Google Gemini app, which enables live, real-time conversations with an AI assistant. It highlights the app's versatility, emphasizing its utility for various practical applications such as interview preparation, travel advice, and brainstorming sessions. The introduction sets a positive tone about Gemini's capabilities, suggesting its potential to enhance user experience across different tasks. Additionally, it hints at the app's increasing relevance in daily activities in light of modern technological advancements.
Understanding Volatility and Investment Strategies
Jason Buck discusses his approach to volatility through the Mutiny Fund's flagship Cockroach Fund, which combines offensive and defensive investment strategies. The fund recognizes the limitations of traditional diversified portfolios that primarily hold offensive assets, which can falter during market downturns. Buck stresses the importance of pairing defensive strategies like long volatility and commodity trend-following with equities to mitigate risks during market crashes. Through these approaches, investors may achieve a more resilient portfolio, characterized by reduced volatility and improved peace of mind amidst market uncertainties.
Market Dynamics and Tail Risk Products
The conversation delves into the challenges faced by tail risk products and long volatility strategies, especially during market conditions characterized by gradual declines rather than sharp crashes. Buck explains that these strategies often underperform in slowly deteriorating markets, as was the case in 2022, leading to a challenging environment for investors. He emphasizes the relevance of trend-following in commodities during economic downturns, particularly as these strategies can capture gains in inflationary conditions. This highlights the importance of strategic asset allocation to navigate various market environments effectively.
The Role of MicroStrategy and Bitcoin Investments
The discussion shifts to MicroStrategy's controversial approach to acquiring Bitcoin through various financing methods, including convertible debt. Experts weigh in on the dynamics of this investment strategy, noting the interplay between Bitcoin's volatility and MicroStrategy's financial maneuvers. As the conversation unfolds, they address the potential implications of this strategy, particularly concerning market liquidity and investor perception. Furthermore, the impact of Bitcoin's fluctuating price on MicroStrategy's stock value becomes a focal point, leading to broader reflections on the cryptocurrency's future.
The Future of Productivity and Work Ethics
A segment of the podcast explores productivity principles as outlined in Cal Newport's book, emphasizing a shift from performative busyness to deeper, quality-focused work. Newport advocates for doing fewer tasks, promoting a sustainable pace, and prioritizing quality in output to counteract the issues associated with modern work culture. This dialogue emphasizes the importance of fostering an environment conducive to thought and meaningful progress, rather than simply adhering to the traditional metrics of productivity. The insights encourage listeners to rethink how productivity is defined and pursued in increasingly complex work contexts.
Value: After Hours is a podcast about value investing, Fintwit, and all things finance and investment by investors Tobias Carlisle, and Jake Taylor. See our latest episodes at https://acquirersmultiple.com/podcast
We are live every Tuesday at 1.30pm E / 10.30am P.
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Hi, I'm Tobias Carlisle. I launched The Acquirers Podcast to discuss the process of finding undervalued stocks, deep value investing, hedge funds, activism, buyouts, and special situations.
We uncover the tactics and strategies for finding good investments, managing risk, dealing with bad luck, and maximizing success.
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ABOUT TOBIAS CARLISLE
Tobias Carlisle is the founder of The Acquirer’s Multiple®, and Acquirers Funds®.
He is best known as the author of the #1 new release in Amazon’s Business and Finance The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market, the Amazon best-sellers Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014) (https://amzn.to/2VwvAGF), Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012) (https://amzn.to/2SDDxrN), and Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors (2016) (https://amzn.to/2SEEjVn). He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law.
Prior to founding the forerunner to Acquirers Funds in 2010, Tobias was an analyst at an activist hedge fund, general counsel of a company listed on the Australian Stock Exchange, and a corporate advisory lawyer. As a lawyer specializing in mergers and acquisitions he has advised on transactions across a variety of industries in the United States, the United Kingdom, China, Australia, Singapore, Bermuda, Papua New Guinea, New Zealand, and Guam.
He is a graduate of the University of Queensland in Australia with degrees in Law (2001) and Business (Management) (1999).
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