My Age of Investment

   Chapter 1160 Black Swan Fund

  Spitznagel took Xia Jingxing and the three to briefly visit the office on the first floor, and then he led the three to the second floor.

   "Daren, what would you like to drink?"

  Xia Jingxing smiled at Spitznagel, said "whatever", and then looked at the surrounding environment curiously.

  The second floor is decorated and decorated like a small bar, with a bar counter and a wine cabinet full of various drinks. There are card tables, sofas, pool tables, TV sets and other furnishings next to it.

   "This is where you usually rest and relax?"

  Spitznagel did not answer immediately, but stared at Xia Jingxing seriously for a moment, then suddenly grinned: "Yes, Daren, what do you think of this place?"

  Xia Jingxing nodded, "It feels very good! Financial transactions are a very boring thing. There is such a place for everyone to relax and have fun. If I were an employee, I would love to go to work."

  Spitznagel laughed, feeling like he had finally met a soulmate.

   Of the ten LPs who came to visit in the past, nine felt that he was not doing his job properly and turned his serious financial investment work into a weekend party, which was held every day.

   As everyone knows, the reason why he chose to do this naturally has his own considerations.

Abel is the LP who doesn't understand him in Spitznagel's mouth, and suddenly said: "It's okay to relax at work, but don't drink too much. Once you knock out the oolong finger, the fund that originally made money will lose money. Tired, no matter how serious it is, liquidation is possible.”

Abel said a lot, but Spitznagel was not angry, and explained: "We usually don't drink at work, only after get off work and weekends, the whole team will get together for two drinks. ."

"That's good. Three years ago, there was an oolong finger incident that caused a sensation in the industry. A trader from Mizuho Securities Co., Ltd. mistakenly placed the customer's "sell 1 share of J-COM stock for 610,000 yen" order. It was marked as "Sell 610,000 shares of J-COM Corporation at 1 yen per share".

   This incident caused heavy losses to Mizuho Securities, and at the same time, its professionalism was greatly questioned by the industry. "

  Abel looked at Spitznagel with a smile, and said jokingly, "Man, I don't want you and your global investment fund to appear on the front page of financial news one day."

  Spitznagel smiled and didn't say anything. Compared with the doubts and ridicule of other LPs, Abel's words were already the most polite.

  Because the boss was right next to him, Abel didn't continue to scold Spitznagel.

   He believes that the boss has his own judgment, and he does not need to remind him too much.

  Spitznagel greeted Xia Jingxing and the three of them to sit down on the sofa, and brought a cup of coffee to each of them.

  Xia Jingxing took a sip of coffee, put down the cup and asked, "I heard that Global Investment has made a lot of gains this month?"

   Hearing this, Spitznagel moved in his heart, as expected.

   His own "tail risk strategy" has alarmed the financial tycoons!

   Otherwise, how could the boss come to this backcountry Santa Monica in person.

   Thinking of this, Spitznagel said quite contentedly: "This is actually an attempt by our fund. So far, the effect is not bad!"

  Xia Jingxing smiled, "Try? Black Swan Fund's first test?"

  Spitznagel shook his head gently, "Daren, you are wrong, Global Investment is not a black swan fund."

Abel looked at Spitznagel's sternness and couldn't help but interject: "You are betting that there will be extremely low probability and unprecedented catastrophic events in the future, betting that these catastrophic events will hit the stock market or cause inflation. Soaring, mainly by buying put options, especially when they are cheap, in large quantities, which can pay off once the stock market gets really bad.

Is it not? "

  Spitznagel first smiled politely at Abel, and then explained calmly: "You are right, this is the "tail risk trading strategy" of ordinary black swan funds.

  Once a black swan event occurs in the market, there will be a huge risk of volatility in securities prices.

  This risk is at the end of the tail in the bell curve of the risk assessment model, so it is called tail risk.

   The book "Black Swan" has a detailed introduction and elaboration of the black swan trading strategy. "

   Jiang Ping spoke at this time, "I have read "Black Swan" no less than three times, and I have this book in my office now.

The author of the    book, Nassim Taleb, also known as the "Father of the Black Swan", is your master and your partner, right? "

  Spitznagel smiled and said, "Yes, he taught me how to make money in a crisis, and he is also a mentor on my life path."

  Xia Jingxing nodded lightly, expressing his approval.

  Spitznagel is a young man with great talent in financial trading. At the age of 16, he worked in the futures trading company founded by his father's friend during the summer vacation.

   This guy got his hands on food price and crop report research while his peers were still at KFC and McDonald's fries.

   His father's friend, Mr. Klimp, is not a nobody, but a well-known trader in the futures industry.

   But Crimp just gave Spitznagel an investment enlightenment. This guy really made his fortune because he met the second nobleman Taleb.

   "In 1993, when I was 22 years old, I graduated from Kalamazoo College in Michigan, and then with my father's support, I bought a trading seat on the Chicago Board of Trade for Treasury futures and foreign exchange futures."

   "Had a great time at first because I saw a lot of dollars coming in every day."

  Spitznagel smiled and told the three about his career experience when he was young and how his investment style was shaped.

   "Then the storm hit, and in 1994, the Federal Reserve unexpectedly raised interest rates, the Treasury market plummeted, and many traders went bankrupt overnight.

   A lot of exchange icons in my mind, body and soul are forever buried in this crisis.

   Relying on Mr. Crump's advice - not afraid of small losses, I was lucky to escape, but my strength was also greatly damaged.

   After that, I jumped to the proprietary trading department of a Japanese investment bank, and experienced black swan events such as the Asian financial crisis in 1997 and the Russian debt crisis.

  In every crisis, a bunch of financial giants go down and go bankrupt, almost giving me crisis PTSD (Post Traumatic Stress Disorder). "

Speaking of this, Spitznagel smiled, "I'm not afraid of your jokes, I was very afraid of losing during that time, my whole person's spirit was about to collapse, and I kept complaining and fearing, how could there be so many markets Black Swan?"

  Xia Jingxing and the three of them nodded lightly. Financial transaction work is not an easy job, and the psychological pressure is especially great.

   What happened to Spitznagel is by no means an exception!

  As far as Xia Jingxing knew, in order to maintain a calm trading mentality, Jiang Ping was secretly taking estrogen in private...

   How big this side effect is, it is not difficult to imagine.

  Spitznagel said with emotion: "This series of encounters has convinced me that making money from disasters is the secret to staying victorious!

   Then, in 1999, I chose to enter the New York University Colony Institute of Mathematics for further study.

  In college, I met Nassim Taleb, a math tutor and the famous black swan theorist.

   He also holds the same view as I do, to take advantage of various crisis events to make profits.

   So, we teamed up to form the hedge fund Empiricism.

   We buy cheap puts, watch the value drop until it hits zero, buy new puts, and repeat…

   Not only the traders under his command can't stand the investment style of "looks like a fool, feels like a fool", but even Taleb is a little worried that the foundation will die from excessive blood loss and can't wait for the black swan event.

  We are surviving, the 9/11 incident is coming! "

  Abel asked: "It has been nearly three years from the establishment of your fund to the 9/11 incident. What if the incident broke out a year or two later?"

Spitznagel said in a calm tone: "Then the size of our fund may be reduced a lot, but we will also achieve the final victory, because we firmly believe that the market is not a stagnant pool, and crisis events always appear according to certain rules. "

   (end of this chapter)