Inside the Secret World of Prop Traders | Noel Smith of Convex Asset Management
Noel Smith, founder of Convex Asset Management has spent most of his career outside of the world of managing other people’s money. Instead, he traded his own capital as a proprietary trader. Prop traders are famed for generating staggering rates of return, but because they have no interest in raising money, their secrets and strategies generally remain behind closed doors. However, he has decided to bring these strategies to the hedge fund world at Convex Asset Management and while they don’t scale to produce the same level of returns their lack of availability outside the prop world gives him differentiation in the product marketplace. In this interview, Smith explains why props can make so much more money, how much harder capital raising is than he anticipated, and why he ranks relationships and likability higher than performance when it comes to hedge fund success.
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Timestamps:
00:00 Intro
01:16 What is Prop Trading?
10:51 Moving to the Hedge Fund World
16:36 The Hedge Fund Popularity Contest
23:04 Volatility Trading Strategies
27:27 Extracting Information From The Options Market
32:09 Scaling Prop Strategies
34:44 Alpha Degradation
39:31 Being Good Is Not Enough
48:03 Dealing With Extreme Performance
53:28 Long-term Vision For Convex Asset Management
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55:33
The Treacherous Last Mile of Inflation | Vincent Deluard on France, 2025 U.S. Fiscal Drag, COLA Pain, and the U.S. Healthcare Price Spiral
Vincent Deluard, director of global macro for StoneX, joins Monetary Matters to share why he thinks there is a perfect storm of macro headwinds that in April to May of 2025 may put a halt to the relentless rise in U.S. stocks.
Deluard argues that the lower inflation of 2024 will result in a lower cost-of-living-adjustment (COLA) adjustment for 2025 U.S. government programs such as Social Security. He thinks a strong U.S. dollar could dent corporate profits and that state and local governments plan to actually shrink expenditures in 2025.
Deluard, a Frenchman, shares his detailed view on political chaos in France and its macroeconomic consequences. Recorded on December 11, 2024.
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1:21:43
20% Decline In Stocks By First Quarter 2025? Felix Zulauf on a Bubble In S&P 500, Yen Carry Trade, and Bond Market Rollercoaster
Today’s episode is brought to you by the Teucrium Wheat Fund. War, weather, inflation—even monetary policy—drive wheat prices. See disclaimers below. Explore the opportunities at: https://bit.ly/Teucrium
Felix Zulauf, renowned macro investor and founder of Zulauf consulting, joins Jack on Monetary Matters to share his current views on stocks, bonds, and commodities. Zulauf expects a >1000 point correction in the S&P 500 in early 2025, and warns that a strengthening Japanese yen could unleash a wave of liquidations from investors involved in the Yen carry trade. Under such a risk-off scenario, Zulauf expects U.S. Treasury yields to decline, however he thinks the secular bear market in bonds will ultimately continue. Zulauf is not ready to call an end to the secular bull market in U.S. stocks. Recorded on December 9, 2024.
Felix Zulauf website: https://www.felixzulauf.com/
Felix Zulauf email: [email protected]
Zulauf Consulting on LinkedIn: zulauf-consulting
Zulauf Consulting YouTube Channel: @zulaufconsulting
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Disclaimers for Teucrium sponsorship:
This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing. To obtain a current prospectus visit www.teucrium.com. The Teucrium Wheat Fund is a commodity pool regulated by the Commodity Futures Trading Commission and is not a mutual fund registered under the Investment Company Act of 1940 and is not subject to regulation under such Act. Commodities and futures generally are volatile and are not suitable for all investors.
Futures investing is highly speculative and involves a high degree of risk. An investor may lose all or substantially all of an investment in the Fund. Investing in commodity interest subject the Fund to the risk of its related industry. Brokerage commissions and exchange-traded fund expenses will reduce returns.
Teucrium Trading, LLC serves as the Sponsor of the Teucrium Wheat Fund. PINE Distributors LLC is the Marketing Agent for the Fund, and is not affiliated with Teucrium Trading, LLC, or any of its affiliates.
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Music from #InAudio: https://inaudio.org/
Track Name: Cinematic Piano [Cinematic Music] by MokkaMusic / Soul
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56:49
Active Management Still Matters in Emerging Markets | Jamie Carter
Jamie Carter, Partner and Managing Director at Variis Partners has spent much of his career focused on the world of long-only emerging-market investment boutiques. In this interview with Max Wiethe, Carter discusses the huge differences between building a long only business and a hedge fund business, why launching fund vehicles out of the UK has become more difficult, the differences in raising capital in the US, UK, and Europe, and why he thinks emerging markets are the last hold outs for fundamental active managers. He also explains why EM investors and allocators are holding their collective breath waiting to see how the Trump administration’s policies will impact global markets.
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You can learn more about Variis Partners on their website: https://www.variispartners.co.uk
Follow Max Wiethe on Twitter: https://x.com/maxwiethe
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1:17:16
Rumors of Job Market Demise Have Been Greatly Exaggerated | Jack Farley & Max Wiethe
Jack Farley welcomes Max Wiethe, his business partner and host of the Other People’s Money podcast, for a conversation about the job market, the stock market, and the recent central banking conference they attended. Recorded on December 6, 2024.
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Ireland