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What compels you to chase yield? How do you make the case that the risk (probability of loss multiplied by magnitude of loss) doesn't exceed the expected yield
by engineer_22 6y ago
What compels you to chase yield?
How do you make the case that the risk (probability of loss multiplied by magnitude of loss) doesn't exceed the expected yield?
I think hedge fund manager in original title is saying he's uncomfortable with the risk/yield equation right now.
- toomuchtodo 6y agoIn the case of institutional managers, they live and die by their returns. Take pension funds: if they do not meet their return targets, pensions get cut (or debt is issued to make up the gap, big yikes). I agree with your last statement: the amount of risk isn't realizing a corresponding risk premium in the returns available. Yet, you must invest somewhere. That's your job (as an institutional investor). A lot of structural financial heartache ahead.