Thread by @Ksidiii

During moments of market stress, it’s normal to have clients reach out and ask “what are your thoughts”. One client reached out last week during the selloff and was surprised to hear me have a bullish stance while the market was getting sold off.

https://twitter.com/ksidiii/status/1445361177429778436

It’s important to have your own take based on your own data. Headlines can alter sentiment very fast and smart money doesn’t operate on the headlines that are fed to the fishes. That’s not how trading works.

The client responded jokingly, “you guys are supposed to be our vol guys”

That’s the other problem with asset management…. everyone is trying to push their own book & agenda.

If you are an allocator and you have a vol manager that always claims the sky is falling,

that person is pushing their agenda or is way out of line with what is really going on. There is no alpha in that.

If that’s the case there’s no need to pay someone to manage money for you to put on a constant trade structure (aka: long SPX 10 delta put).

The alpha comes from the manager’s expertise in their ability to take risk. In some way shape or form it will boil down to that.

If you are a family office/ allocator/ accredited investor, beware of the sales guys that push a theme without a holistic understanding.

If the manager is not delivering alpha, you don’t need to pay someone 2 and 20 to click buy every month on some vanilla trade structure. The manager should be able to remove his stance, view what the environment is saying and make decisions on that.