Following up on August 7's "Gold: I Fear Izabella Kaminska Has Gone Over To The Dark Side"
A deep dive from FT Alphaville's editor:
Bitcoin is on a tear. And this time, the hyper valuations might stick.
On December 11, a prominent but very private financial newsletter author noted to clients that while he had never previously written about bitcoin, it was correct to say that institutional capital had now started to arrive in scale and that it would be churlish to pick a fight with it. Demand for bitcoin would now outstrip supply.
Bitcoin, he observed, would become an excellent metaphor for risk appetite in 2021 as a result.
Less than a week later, Coindesk confirmed that UK-based asset manager Ruffer had accumulated some £550m of bitcoin since November, representing some 2.7 per cent of the firm’s AUM. Ruffer’s move is now being widely interpreted as the beginning of a major portfolio diversification trend into bitcoin. It seems institutional money can no longer afford to ignore it. And bitcoiners are understandably overjoyed....
....MUCH MORE
Jonathan Ruffer is justifiably famous for some high kurtosis (fat tail/black swan) VIX trades that ZeroHedge was tracking.
I like Ruffer's quarterly Investment Review but I have a serious problem when I read it.
I start to sing. This song:
"I like… fat… tails and I cannot lie, You vol sellers can’t deny..."
From The Mercenary Trader:
Baby Got Black (Swan)
(With apologies to Sir Mix-a-Lot)
I like… fat… tails and I cannot lieYo
You vol sellers can’t deny
When a hot trend breaks with a well-timed stop
and a great big black swan pop you get
Paid… P&L year gets made
‘Cause you noticed that trade was packed
Buncha mean reversion suckers got jacked
Oh baby I wanna get lumpy
Long gamma for when it gets bumpy
Central banks tried to haze me,
But those carry trades just don’t faze me!...MORE
See also:
Aaarrrggghhh: I Can't Get Matthew Klein's Song Out Of My Head
