Mark Spitznagel's new book - Safe Haven

[WCInovice]

Is anyone else reading this book? I just got it yesterday and started last night.

I hope it's not too complicated for me - I"m a simple index fund investor that dabbles in some real estate and rare private equity deals, though vast majority of my money is just in VTSAX.

I've been looking for a way to integrate Taleb/Spitznagel's philosophy into my personal financial planning, but I don't know anything about trading options, etc. I'm probably in the minority here, but in my elementary view of things I"m not convinced that the traditional X% bonds, X% stock index fund way of going about things is the best for me. Again, I'm far from an expert but I think it is conceivable there may be holes in modern portfolio theory.

In a perfect world I'd get a chunk of my net worth in Inversa Investments, but I don't have that kind of money to enter that fund.

Any thoughts?


https://www.amazon.com/Safe-Haven-In.../dp/1119401798

[Random1]

Haven't read the book. When I see a hedge fund up 4000%, the first thing I think of , that I was too late to get in and the second thing I think of is who are the unlucky ones on the other side of the trades. There is a reason why the majority of hedge fund managers don't beat the market over the long run, personally I am happy with my boring mutual funds.

[WCInovice]

Haven't read the book. When I see a hedge fund up 4000%, the first thing I think of , that I was too late to get in and the second thing I think of is who are the unlucky ones on the other side of the trades. There is a reason why the majority of hedge fund managers don't beat the market over the long run, personally I am happy with my boring mutual funds.

They are a different type of hedge fund though. I'm still reading the book (very early in), but they approach things very differently. I think they've only outperformed S and P by 3% over the last 15 years.

The book is not an ad for his hedge fund. They don't need any more clients.

I tend to be a worrier, so maybe I'm attracted to risk mitigation. But In the intro/first chapter they discuss things that I've been worried about that very well may have an impact on how we approach investments (huge under funded state pensions, central banks propping up economies, inflation, etc).

Would love to see if any other WCI people that have read the Dao of Capital or any other Spitznagel takes have any thoughts. I'm in way over my head.

[Zaphod]

Haven't read the book. When I see a hedge fund up 4000%, the first thing I think of , that I was too late to get in and the second thing I think of is who are the unlucky ones on the other side of the trades. There is a reason why the majority of hedge fund managers don't beat the market over the long run, personally I am happy with my boring mutual funds.

Theyre a tail risk fund and I dont recall exactly their structure, but the thing to think of is they probably lose money 59/60 months before hitting and does this make up for the ongoing losses. This is insurance. I'll have to check in but these often dont pay for their gains, and theyre not meant to be a large portion but rather a small allocation to buoy the whole portfolio. You have to know that it will underperform almost all the time before doing well.

[WCInovice]

Theyre a tail risk fund and I dont recall exactly their structure, but the thing to think of is they probably lose money 59/60 months before hitting and does this make up for the ongoing losses. This is insurance. I'll have to check in but these often dont pay for their gains, and theyre not meant to be a large portion but rather a small allocation to buoy the whole portfolio. You have to know that it will underperform almost all the time before doing well.

Like I said, I'm very early into the book....but I don't think this is the case for Universa. I think they've made money most years.

But Spitznagel's stance is that by having a "safe haven" it doesn't have to drag down your portfolio, it can and should actually improve returns. He doesn't think you have to sacrifice long term gains by safe haven investing. I'm wary though of it sounds too good to be true it probably is...and that there's no free lunch. We'll see.

Quote from a source below (?not sure if reputable?):

"The S&P 500 had declined 12.4 percent as of the end of March. Since the end of 2019, Universa’s hypothetical portfolio has returned 16.2 percent, compared with the S&P’s 4.5 percent. Most telling, the portfolio has gained 11.5 percent per year since inception in March 2008. The S&P has returned 7.9 percent per year over the same period. According to an audited performance statement from a source close to the firm, Universa’s life-to-date average annual return on invested capital across all Black Swan Protection Protocol funds from January 1, 2008, to December 31, 2019, was 105.2 percent."

https://www.institutionalinvestor.co...rsus-the-World

EDIT:

Another source suggests your take may be correct:

Universa’s numbers are not completely transparent, so I could be a bit off on my calculations. But the point is that reporting a 12.8% gain in March 2020, versus a 0.22% average monthly loss if there is no crash, is the rational way to think about Universa’s performance. A figure like 4,144% isn’t useful information. Similarly, reporting Ackman’s trade as a 33% gain on a 0.5% average monthly premi

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[Zaphod]

RIght, that is correct, but also Universa is top notch compared to most or considered different at least. Average is wrong way to look at it, lumpy is more like it.