Goldman Sachs CEO Lloyd Blankfein interviews Paul Tudor Jones
Comment of the Day

July 09 2018

Commentary by Eoin Treacy

Goldman Sachs CEO Lloyd Blankfein interviews Paul Tudor Jones

This interview may be of interest to subscribers.

Eoin Treacy's view

I found this interview to be very interesting. The comment about the introduction of computer-based trading displacing 100,000 traders from their positions and the transference of the profits from them to a small number of quantitative funds was enlightening.

The reality of technological innovation is that the barriers to entry in quantitative trading are falling all the time. The technical expertise required to develop such strategies has fallen and the quantity of money required to trade has also fallen. That means the number of such funds has exploded over the last decade and the strategy that has worked best in that time is risk parity.

With negative real rates, carry trades and leveraged longs have tended to work and buying the dips is still working despite the wobble from the blow-up of short volatility trades in February.
A major challenge to that strategy will arise when real rates are no longer negative and leveraged trades are not so easy to put on. Right now, the S&P500 is bouncing from the region of the trend mean and as long as it continues to do that the benefit of the doubt can be given the benefit of the doubt.

The Nasdaq-100 has bounced from the 7000 area and a sustained move below the trend mean would be required to the upward bias.

Back to top

You need to be logged in to comment.

New members registration