Author Topic: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March  (Read 1871 times)

Alchemisst

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A tail-risk hedge fund advised by Nassim Taleb, author of “The Black Swan,” returned 3,612% in March, paying off massively for clients who invested in it as protection against a plunge in stock prices.

Spitznagel included a chart in his letter showing that a portfolio invested 96.7% in the S&P 500 and 3.3% in Universa’s fund would have been unscathed in March, a month in which the U.S. equity benchmark fell 12.4%. The same portfolio would have produced a compounded return of 11.5% a year since March of 2008 versus 7.9% for the index.

https://www.bloomberg.com/news/articles ... e=url_link

stylesjl

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #1 on: April 09, 2020, 03:22:49 AM »
Interesting that the fund itself only produces outsized returns on some occasions and when it does it is only a few percentage points higher than a standard buy and hold strategy over the longer term.

vand

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #2 on: April 09, 2020, 03:36:58 AM »
Pretty good, but if you had taken a snapshot of this portfolio vs S&P500 2 months ago it would be badly underperforming, and I suspect that 3 years from now it will again be underperforming.

I do like the idea of having deep out of the money puts when it is cheap to do so (usually when the market is powering to new highs), but make no mistake that most of the time it'll be a drag on overall portfolio performance. There are no free lunches.

vand

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #3 on: April 09, 2020, 03:42:42 AM »
Interesting that the fund itself only produces outsized returns on some occasions and when it does it is only a few percentage points higher than a standard buy and hold strategy over the longer term.

A "long term" that begun with the worst bear market in 40 years and ends with the fastest bear market in history..

I'm not knocking it btw. There's always a contrarian strategy that will hit a home run once a blue moon. Maybe there may even be a place in your own investment strategy to including some holdings in such a fund.  It's definitely not in the Boglehead investing manual, though, and the time to be getting interested in them is when they seem to the very definition of a sunk cost, not when they've just hit a home run.
« Last Edit: April 09, 2020, 03:44:57 AM by vand »

ministashy

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #4 on: April 09, 2020, 08:51:32 PM »
I honestly thought this was a spam post when I first saw it.

What is the point of this post?  That one fund managed to make a lucky call one time?  What does that have to do with Mustachianism?

Metalcat

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #5 on: April 10, 2020, 05:21:47 AM »
I honestly thought this was a spam post when I first saw it.

What is the point of this post?  That one fund managed to make a lucky call one time?  What does that have to do with Mustachianism?

I wouldn't call anything Taleb does as "lucky", this is precisely the kind of event his investment strategy is designed for.

Is it relevant for most personal investors? Not directly, no.

However, I really enjoy reading Taleb as a reinforcement that these events are absolutely inevitable, and to be fully psychologically prepared for them as a NORMAL part of investing, so as not to shit the bed when they happen.

Alchemisst

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #6 on: April 10, 2020, 09:40:01 PM »
Personally, I would like to be able to incorporate a small % of my portfolio into something like this fund, as insurance however its not open to retail investors and I don't think the strategy is easy enough for the average person to follow otherwise, would like to hear from anyone trying something similiar.

obstinate

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #7 on: April 12, 2020, 08:08:42 AM »
I can't find any solid information about this fund, not even what its name is. I would be interested to know if these returns are pre- or post-fees. I can only guess that they are pre-, since normally these types of funds like to report things in those terms. I suspect that even after this massive win, trough to trough their post-fee performance is probably below VTI's. If anyone has more information, please let us know.

maizefolk

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Re: Nassim Taleb-Advised Universa Tail Fund Returned 3,600% in March
« Reply #8 on: April 12, 2020, 08:47:59 AM »
I can't find any solid information about this fund, not even what its name is. I would be interested to know if these returns are pre- or post-fees. I can only guess that they are pre-, since normally these types of funds like to report things in those terms. I suspect that even after this massive win, trough to trough their post-fee performance is probably below VTI's. If anyone has more information, please let us know.

The article mentions the company the runs the fund "Universa Investments" and based on the combination of that and the Taleb connection, my guess is that is any one or a combination of the ~30 funds Universa runs that have with the name "Black Swan Protection Protocol" followed by a roman numeral.

These are mostly rather small funds with many having only millions to tens of millions of dollars under management.