From a trader:
What is your time frame?
We are investors. Every dollar that the Fed prints, our case grows stronger. The Fed is trapped. Either they print money or interest rates rise. There is too much debt to allow rates to rise.
From an efficient market theorist:
Do you like cash right now as part of your portfolio allocation?
No. We expect inflation. Holding cash with inflation guarantees a loss over time. We believe markets are inefficient and both our longs and shorts have substantial upside.
From a macro investor:
What happens if the Fed is able to keep rates low without inflation?
Then the world continues to misallocate capital and the economy slows more severely. If you believe that the Fed can print money forever without causing a decline in the dollar or a structural shift, then the Focused Capital strategy is not right for you.
From speculators:
Are you also advocating Bitcoin?
No. There is no intrinsic value to bitcoin, its not used in anything. There are 100's of crypto-currencies, I have no idea if any will be adopted.
From a negative yielding bond buyer:
Is there risk?
Any investment has risk. What is the risk to a 30-year bond if inflation rises to 10%? The Focused Capital strategy seeks to address risk with a diversified portfolio of 40-60 longs and 20-50 shorts.
From an index buyer:
Will your strategy beat the index?
It depends. If the system stays intact and printing money continues to create wealth, then hedging hurts the chances the strategy is successful. We believe that negative interest rates are a sign that this is the time to hedge.
The world is still round: economics, finance, and math are all on OUR side.
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