Open a finance textbook, and you’ll find discussions of volatility and beta, value-at-risk, the Sharpe ratio, the Sortino ratio, the Treynor ratio and many others. All of these are quantitative tools for measuring risk. But what should you make of these metrics—are they an effective way to control [...]
Building a barbell
In the weeks since Silicon Valley Bank (SVB) disintegrated, there’s been a good amount of post-mortem analysis. In the end, two factors drove its demise: SVB’s customer base was concentrated among venture capital-backed technology companies. Because of that, nearly 90% of deposits topped the [...]
What investors can learn from Silicon Valley Bank
In the week since Silicon Valley Bank (SVB) failed, a debate has emerged: Did the government do the right thing when it decided to guarantee all of SVB’s depositors, including those that exceeded FDIC limits? On one side of this debate are those who view the government’s action as an [...]
Silicon Valley Bank – Message to Clients
I wanted to contact you regarding the failure on Friday of Silicon Valley Bank. Many people are understandably concerned. Below is a short Q&A with some recommendations: What happened? In the middle of last week, two pieces of news were revealed about Silicon Valley Bank (SVB), a midsize bank [...]
Master of disguise
A universal truth about market bubbles is that they’re masters of disguise. Each new bubble appears different enough, on the surface, to lure new investors. While market bubbles are almost as old as the market itself, the latest example—centered around the cryptocurrency exchange FTX—is particularly [...]
