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14 results for “safety margins”
Fundamentally, there's a couple of points here to be made. The first one is a bit like Jamie Dimon at JPMorgan talks about having a fortress balance sheet in financials is of paramount importance to succeed over time. It allows to obviously survive c
14:56 / 16:00
from transcript14:56 – 16:00
of the operating budget, and so you have to be able to control that to make sure that the CFO and the finance teams of these institutions can draw a stable amount of capital every year. And, it also has a behavioral element, which is how much can the
11:17 / 12:21
from transcript11:17 – 12:21
The risks from margin, the losses, the bad account balances, it's not been an issue for the business. So the risk management system exposed has clearly been working. If you think about how financials businesses run into trouble, there's some sort of
39:42 / 41:05
from transcript39:42 – 41:05
“Why Rolex tests dive watches 25% beyond their advertised depth rating”
...of safety, but I think the dive watches are an extra 25%. Yeah. You don't wanna be like, oh, I've got a 300 meter depth watch and, get down to 300 meters and think you're good, but actually go to thr
2:08:00 / 2:08:34
tactical advice2:08:00 – 2:08:34
We use a set of hard risk constraints that are consistent across all of our portfolios, as well as a statistical risk model predicting the volatility and the tracking error of a portfolio so that all else equal will prefer portfolios that have more c
32:58 / 34:02
from transcript32:58 – 34:02
that there are guardrails put in place, sometimes you hear about total portfolio approach other than there's a reference portfolio that's got some simple stock bond risk appetite. It feels less guardrailed around what the expectation should be. How d
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from transcript16:29 – 17:43
...higher margins is volatility. Because if you have a razor thin margin and the market moves, you may not be able to raise more money, you may not be able to get a loan. And so, what a margin does is it gives you stability and staying power in the mark
46:55 / 48:17
from transcript46:55 – 48:17
We don't wanna rely on any one type of thematic bet. We don't wanna rely on any one sector or region or asset class doing well for success. So we're really focused on balance. We do a lot of work cataloging what are ranges of exposures that we're com
31:32 / 32:47
from transcript31:32 – 32:47
how much that variation would aggregate up to in terms of the leeway management had been delegated. We estimated that that amounted to around about 450 basis points of active risk using all the policy ranges. With the transition to a total portfolio
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from transcript17:15 – 18:16
Some want to spend 15% in some years and 3% in others. And that changes very much your ability to use private assets in the portfolio. If one of those big spending years happens to correlate with a period of market drawdown where the liquid part of t
12:03 / 13:12
from transcript12:03 – 13:12
So now we've got $93 left. And then we layer in the risk responders program, which is $23 out of every $100 And we put 100% of that risk responders, which is dynamic and vexity and trend falling in there. In a benign market, we call benign market tha
19:31 / 20:39
from transcript19:31 – 20:39
...managing margins and collateral aren't up to it. So beyond IT, you know, the operational execution and the risk management are essential and CME right up there is best in class. I'll admit I'm a tourist to the exchanges, so I might not have appreciat
16:25 / 17:35
from transcript16:25 – 17:35
So if my hedge is up 10% or 50 or 30 or whatever it might be, we rebalance half of it or all of it because that's often what investors do. The conclusion from that was actually the optimal approach is pretty simple, actually. Somewhere around a month
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from transcript21:40 – 22:45
of an exchange that perhaps users are sort of blissfully unaware of, but it's a real risk. I mean, not at CME, but from the Nasdaq AB exchange in 2018, good example of how important this risk management is. There was an individual trader that bet hea
15:42 / 16:52
from transcript15:42 – 16:52
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