Disciplined Systematic Global Macro Views

Nassim Taleb is a forward thinker who’s always pushing researchers to think deeper about of the statistical distributions of data. His latest effort has been aiming to have more scientists accept the precautionary rule in their thinking about risks. Thinking of the focus is placed by this principle on the risk of ruin.

Investors are constantly facing risk as assessed by the volatility associated using their possessions positions and there is absolutely no lack of good focus on risk management. The truly problem is whether the risks we face are actually measurable and whether not realizing this uncertainty could cause our ruin. Overlook the VaR in a portfolio.

What matters is if the dangers of some unlikely or extreme event will cause permanent harm to the profile. VaR is a good indication of some measurable dangers, but it is just a tool for what is important in a Gaussian or thin-tailed world. However, applying the precautionary principle to asset management seems very relevant given a minimal return environment. The probability of spoil for a profile is vastly different than the probability of ruin with respect to global event, however in the current world, it is possible that bad options could truly devastate an investment profile.

The precautionary theory for investment management creates a concentrate on the likelihood of spoil but perhaps with a small “r” rather than a huge “R”. Ruin for your selected portfolio. How exactly does this connect with money management? Regarding leverage, risks are amplified hence the precautionary rule is more appropriate for a leveraged stock portfolio.

If you use leverage, incorporate caution. Do not take big leverage wagers when there is not certainty about safety. In the event that you bias toward precaution, don’t take leverage. The same can be employed with alpha strategies, without security and a genuine understanding of risks, do not take the wagers. The precautionary rule also focused on the fact that the risk may not be thin-tailed but may follow power laws.

If there’s a chance for an unwanted fat tail, then diversification has to be applied so as to eliminate the chance of a fat-tiled risk from ruing a portfolio. A fat-teled event could be a pugilative war, country personal bankruptcy, or an adobe flash crash. All could create ruin when there is poor diversification. Now, ignorance ought never to be a justification for not taking action. The precautionary principle indicates a careful reading of risks to determine what is known and what is unknown. If there are unknown risks, then no action should be taken which may invoke mess up. Stay away from fads and fashion and focus on explore ways of staying diversified.

To show as a cheap price, the existing P/S Ratio would have to be 20% less than the 10-calendar year median, so it close is. I get a 10-year Price/Assets under Management per Share of 9.26%. The current P/AUM is 6.34%, which is some 31% lower. AUM is important as this may push the income, which pushes the earnings. This stock price screening shows that the stock price is relatively cheap.

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When I look at analysts’ recommendations, I find Buy (3) and Hold (4) suggestions. The consensus will be a Hold. There’s an information release dated July 6 2017 on Cision that talks about Gluskin Sheff’s litigation by the co-founders and Gluskin Sheff. 110 million. Nobody I read thought they might get near those quantities. This post from the Canadian Press on BBN discusses GS obtaining a new CEO in Jeff Moody.

Lisa Durand on Dispatch Tribunal discusses the recent insider selling. See what analysts are saying about this ongoing company on Stock Run after. Some think it could be a possible takeover by one of the banks. Gluskin Sheff is an independent investment firm that manages portfolios for high net-worth individuals and institutional clients. Monday, October 2, 2017 around 5 pm.