3 ms·
> It's a straight line down (something like -7% annualized) So if you pay 3% borrow costs you do worse than putting your money in Treasuries? 3% seems conserva
by dmurray 4y ago
> It's a straight line down (something like -7% annualized)
So if you pay 3% borrow costs you do worse than putting your money in Treasuries? 3% seems conservative for the most shorted stocks, I checked a few on [0] - TSLA 0.25%, WE 4%, AMC 143%. Uncorrelated returns are great but this is not the most compelling sales pitch for a short fund. Better to use this information to underweight those stocks in your long portfolio.
[0] https://companiesmarketcap.com/tesla/cost-to-borrow/ https://companiesmarketcap.com/tesla/cost-to-borrow/
- bionsystem 4y agoAll of my shorts are 0.5% or below, most of them are 0.25%. I also said you would have to monitor fee rates. And market cap as well (for example AMC would be too small in your example). Treasuries are quite correlated with the stock market as both depend on liquidity, so it's not exactly a hedge, although they tend to do better during recessions, they will go down during unexpected hikes.