ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Hoffstein and Buck Discuss the Cockroach Portfolio
News
Share

Hoffstein and Buck Discuss the Cockroach Portfolio

Evan HarpFeb 06, 2023
2023-02-06

Corey Hoffstein’s Flirting With Models kicked off a new season at Exchange with a live recording of Hoffstein’s deep-diving interview with Mutiny’s Jason Buck, who he introduced as “the world’s most interesting man.” Buck’s company, Mutiny, is an unusual investment firm designed around ‘anti-fragility’ or ‘crisis alpha’ that is intended to achieve large asymmetric gains in times of high volatility or tail risks such as the 1987 flash crash, 1998-2002 dot com rise and crash, or 2008-2011 financial crisis.

“Life is either arbitrage or optionality,” Buck said before sharing his story about somehow losing money while shorting the biggest real estate firms in the build-up to a mortgage crisis.

While sharing a rich collection of career stories, Buck said, “to me, business entrepreneurship is an art form.” Though Buck jested that he had no traditional artistic skills such as drawing or painting, he sees entrepreneurship as its own art.

Like many artists, Buck said he learned from tremendous pain. His goal with Mutiny was to find a way to hedge against entrepreneurial risk, which people told him was impossible. Explaining how he pulled it off, Buck joked, “we run an entrepreneurial put option."

flirting with models

Content continues below advertisement

Flirting with The Cockroach Portfolio

Explaining his cockroach portfolio, “how do you build a portfolio if you don’t know what the future is?” Before digging into the weeds, Buck set up the four macro quadrants of diversification. Growth and decline, and inflation and deflation. During risk-on, cockroach uses standard instruments, but it taps into complex products (including things such as convex cash) during risk-off periods. Riffing off the traditional sports wisdom of “defense wins games,” Buck joked that offense plus defense wins investing.

By including global stocks, global bonds, four different volatility strategies, and three different trend approaches, The cockroach portfolio attempts to diversify in a deeply layered and total way.

Speaking of Black Swan events, Buck noted, “you can’t plug this into a Sharpe Ratio. It just doesn’t work that way.”

Pointing to Harry Brown’s permanent portfolio build, Buck took time to dig into why he subbed out Brown’s use of gold for inflationary periods. Gold doesn’t quite fit as an inflation hedge to Buck, given how it performed in 2020. Brown is a product of the 70s. “We don’t optimize portfolios; we try to build the least shitty portfolio.” Instead of gold, Buck looks to an ensemble of CTAs to fulfill that role.

“Managed futures and CTA has largely become synonymous with trend following,” Hoffstein added.

Speaking to the limitations of science in the art/science blend that goes into portfolio construction, Buck noted that plugging 100 years of data into a model doesn’t necessarily reveal anything if the world has changed.

For more coverage of the Exchange conference, please visit VettaFi | ETFDB.

» Popular Pages

  • Tickers
  • Articles

Mar 29

Warm Winter Continues to Put European Climate Change in Focus

Mar 29

China’s First Hydrogen-Powered Ship Hints at Growth Potential

Mar 29

What’s Behind Big Spike for Currency-Hedged Japan ETFs?

Mar 29

Nasdaq-100 Index Home to Some Discounted Quality Stocks

Mar 29

Keep Volatility Checked Despite Bank Worries with DBMF

Mar 28

2Q 2023 Market Insights - The Soft Landing Facade

Mar 28

RELX Uses Free Cash Flow to Acquire 9 Companies

Mar 28

As Spring Arrives, Bank on an ESG Rebound in IRBA

Mar 28

Investors Turn to Fixed Income Amid Uncertainty

Mar 28

ETF Prime: Dave Nadig Talks Credit Suisse ETNs and More

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

SMH

VanEck Semiconductor ETF

XLK

Technology Select Sector SPDR...

VTI

Vanguard Total Stock Market...

SOXX

iShares Semiconductor ETF

BLOK

Amplify Transformational Data...

META

Roundhill Ball Metaverse ETF


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X