YouSaid · the spoken record

Hari Krishnan

lines on the record: 94
first: 2022-11-21
most recent: 2022-11-21
sittings or episodes: 1
sources: podcast

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“I do recommend X. What, what? What? It is somewhat quantitative. People tell me that every formula you put in Katsu sales by X percent, but.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“And then you figure out, you have to track it, figure out if it works, you figure out what doesn't work. And then you just keep building because the game doesn't end. And, you know, for me, I've done a lot of different things, as you pointed out, but I try and do a lot of things well without being overly focused on doing them perfectly. I don't worry too much if I miss something. I used to worry about it. Instead, I'm just trying to do a lot of good stuff in a productive way with some rhyme or reason to it, with partners I can trust, and that's a big part of doing. Doing this sort of thing professionally.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I totally agree, and I think my point was on absolute performance, but your point is sometimes you have to pay to get an education. And if you size it small enough, that education can be worth it. Yeah.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“At an equally high level and add it to what I was already doing. It's a different mindset, so what I'm just telling, trying to tell people is yes, you don't want to have a half baked version of something real. You don't want to be talking about something real without doing the real stuff, but by the same token you don't need to be perfect. You want to keep building a solid set of skills that you can keep adding to what you do so that you have a good mix.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“But what I would say, though, is instead of being too daunting to people, I am a bit of an 80-20 guy too, because I think macro is an 80-20 world in the sense that how many things can I do well? where I understand all the weaknesses. I might not be the best at it And how can I patch them together with other stuff I already do in such a way that I have a nice mix? So for example, you know last year there was tons of talk about the game stop melt up and positioning and the squeeze metric stuff all great stuff and people like Jem Carsan are experts in that and many of them know more than I do about the details of it but for me I felt I understood that stuff well enough and was able to encode enough of it in what I do that it would be more productive to do something else.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I mean, that's true with single stocks as well. In terms of a style, they're a masters of a style. Someone's a sentiment analyst. They're a fundamental analyst. This is true. And just, yeah, yeah, just by sort of, oh, I listened to an interview with Hari Krishna on he's a volatility expert. I know a little bit about the VIX.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Think that's great advice, and I'd also say that being 60% as good at a certain technique or framework or style is not going to get you 60% of the results. Like, I feel like if you watch someone who is a professional technical analyst and that works for them, just because you know what RSI stands for doesn't mean you're going to be successful trading on technicals. And honestly, more likely than not, you'll probably fail miserably. And I think, I mean, that's maybe a little bit too dire, but it's the same way with volatility. Like, I feel like. You should know what options are and you should know how to value them or at least how other people think about value them before you even buy or let alone sell one. And I think that's”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's very much like music in a way where you listen to someone playing saxophone or something or whatever instrument you might play, and it catches your ear and you think, wow, I'd like to put that in my playing. But if you just transcribe it and copy it, it's not the same as trying to absorb what the intent was, and then put it into your stuff. Yeah.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“But by the same token, just piggybacking off other smart people's trades, I think is a road to confusion over the long term. So, I mean, if I were fifteen years younger watching these sorts of shows, I would think, let me just absorb stuff, write notes. If something catches my ear, test it, check it. See if the person knew what they were talking about or if it makes any sense. If it does, try and figure out a way to use it.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“if they're a money manager, and so they have conflicting reasons to do it or conflicted reasons to do it. Or it's something where if you don't understand it. Not you're a trade, really. You're just carrying someone else's trade, and that's not always the best thing to do. Now, I agree that one needs to be a bit unemotional about these things, and sometimes not doing your own research and investing all of your ego into a position is the best thing.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Hopefully successfully has been long format interviews where I get to dive into stuff, take my time, build a thesis, chat with someone who I respect, and come away with or try to give something to people that they can't get across the street. It might not be better, but it's something that they won't find elsewhere where they can think and absorb things and hopefully apply them to their own trading or thinking. That's the way I think of news as well, or of watching other people's podcasts, which is stuff will go through me, but I don't feel impelled to act on it now. I'm hoping that if I write it down or I analyze what someone said, look at the data, I might be able to use it at some point. But I'm not in a desperate desperation mode where I feel like, oh, this person said X, I need to put that into my portfolio now. And that's a bad idea to do that anyway because they may already hold.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Oh, lots to discuss there. I'm largely systematic but not a hundred percent, but the noise the short term news flow has very little impact on me. All the positions are covered to the extent that nothing can wipe me out. So that's point number one, so I'm never forced to make a decision based on a gut reaction to an event that may be important, a news event that may be important. The noise itself is best left to the shorter term thinking media of the world. What you're trying to do and what I've tried to participate in?”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“positions too much at any tenor at any maturity because if you do, then there are certain things that can happen that can really put you under pressure. So that's not a trade I would do but conceptually it's kind of the right trade. Don't go and buy volatility where it's rich and buy it where it's cheap. So I might do a put spread further out instead of just buying selling a put and maybe buy put shorter and something of that nature where I'm never overpaying for insurance. That's basically the job there. On the thematic front, I do a lot of other stuff, whether it's with inflation hedging, whether it's commodities based, whether it's regional focused, FX, the whole range, but that's more specific to the macro ideas that we generate and or what the client wants. So that's a different thing altogether.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I've had that experience myself. I took a moderately big loss in two thousand eleven. It wasn't catastrophic, it was about five percent on a position. Where basically in Euroland Longer dated puts were very expensive relative to short dated ones, so I bought twice as many short dated ones as I sold long dated ones. They were all about five percent out of the money, they were puts. And the market went down about five percent close to expiration. The short dated puts went out worthless, and the long dated puts went up hugely because people started getting scared and they bit up the prices of those puts. So sentiments triggered the loss. And so you never want to leave those opened.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“And then they're surprised that they don't make any money doing that because they bought puts and the market went down. But the problem is the timing of the roll is very significant, and they're buying at the richest part of the curve. They're paying a lot to buy that insurance. Everyone else wants to buy it. Institutions like that insurance because they think what's bad that could happen, they average the bad predictions, and they buy something that isn't that bad. And so there's a lot of excess demand for that stuff. If you look at the structured products, they try and put a floor on fifteen percent plus down. Periods. And so that's the rich stuff that you either want to be a seller of if you can hedge it elsewhere, or just stay the heck away from. And so my goal is to try and find places where sentiment is too rosy or too dire, and then build something out of that.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, people like to buy three to six month puts, let's say, that are somewhat out of the money, let's say fifteen percent out of the money, meaning with a strike fifteen percent below the price, and then roll them every now and again.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“So, people like to buy six month, nine month puts on the SP and just go to sleep, right? And so they don't have to contact manage it, but they don't like to buy these positions, a five-day expiration put or something like that, where it's just swinging all over the place. As such, it can make money. It can be either a profitable strategy or you'll lose less money as a hedge as well buying those shorter data protections that everyone is eschewing and selling everything that everyone wants to buy, which is longer data protection.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Because the term structure which is the relative price of short dated versus long dated options has become steep again, so you can buy short dated protection on the cheap, and if you go further out it's pretty rich. So you want to trade spreads or do something else further out. And so a lot of the thinking that I have is in terms of maybe not barbelling but finding the right structure to hedge with based on what the surface gives me. So not really predicting so much as trying to find pockets of value along the surface. So my job as a hedger, which is a big part of my job, is to figure out where people like to hedge. and not hedge Because those are the places where it's likely that the cost of insurance is too high.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Well, your characterization of what has happened is correct. I think January was a fairly big down month in twenty twenty two, and it kind of snuck by people, including myself. So we were already down in the high single digits at that point, and as of today, which is in mid November, we've only gone down another eight to ten percent. So the bleed or the grind down has been very slow. I don't think this sort of move is that persistent is going to persist forever. I wouldn't expect us to just decline slowly another fifteen percent. I would either expect us to recover for a while and then really go down. Kind of chop around flatline from here. Again, though, it's hard for me to predict, I can only tell you where I think the value is in the option space. And the value is coming back to the short end, at least in the SP.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“It's very interesting. And then there's the stock weighted average of the Dow, which is just not good. I'm not a stats person at all. But even I can tell someone's going on when United Healthcare is the biggest stock in the index.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“a big name. Let's say that you have two stocks in an index. One's worth a hundred, one's worth two hundred. If it's cap weighted and twice as much goes into the two hundred in dollar terms as the one hundred, the two hundred will move more up. Because it's not a one to one thing where if you're twice the size. You move exactly the same amount if twice the money flows in. So the bigger names do tend to benefit disproportionately from flows into a cap weighted index such as the NASDAQ or the SP.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“And you are right. I don't look at the NASDAQ that closely. I don't really trade it that much anymore. But intraday price action has been fairly large. I'd have to look into it to see how much higher it is that it has been. But the nature of the Nasdaq has changed just as the nature of the SAP has in the sense that it's now loaded on a small number of names, less so than it was at the end of last year, but still, it's loaded on a small number of names, so it's not the diversified index that it used to be. Now we go into the realms of passive, this, that and the other, but passive according to the mic rein and various other people's paradigm is responsible for the increase in size of the biggest names in these indices because for every dollar that goes into”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, okay, there's a lot to unpack there. One of them is that I haven't done the study recently, but some months ago I noticed that overnight move is far larger than they used to be. Used to be that the futures wouldn't move that much overnight, on average, unless something big happened, and then most of the action would take place during the day. That is no longer the case. You often see big moves overnight, whether it's Euro rebalancing or More automated systems trading this, that and the other, there is enough liquidity to do it, and then you see often reversals during the day. Corrections or whatever And so there is a lot of intraday action partly because there's a correction that needs to be made for the overnight move.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but the thing about the movie is I think it's based on a series of durations ranging from one or two years out much further. And if the one ear to the five year point is hardly moving. Basically, have an index where 40% of it doesn't making up a number, but 40% doesn't move at all, and 60% does, and so you've dampened the fluctuations by 40% at the get-go.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“You're basically taking an asset that was tradable, and then in the 2010s became untradable, namely short duration treasuries, because they just didn't move, and the move index ceased to be of any value in some sense because it loads too much on the short end and the short end was fixed. And now that the short end is free to wag around more, the move has some meaning again. Yeah, I think what you're seeing isn't just a massive jump in risk, but a Revitalization of the move index. It works again. It didn't work for many years and now it actually says something. And so I think that's really what we're seeing.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I'm going to push back against that because I totally agree with what you're saying factually. That the average daily move magnitude is far, far higher than it's been for several years. But if you think that the level is a lot higher, yields are a much higher level if you go back to periods where the short rate was at four percent. You'll find that ten basis point moves are not. terribly large. It's just we've been so conditioned with the recent market tremors like zero bound volatility compressed, rates stuck at the boundary environment that those sorts of moves at the shore end seem unusually big, and I forget too. But I would think if you go back far enough, these are totally garden variety moves.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“And then maybe this doesn't qualify as tail, but the volatility in government bonds, particularly short-duration treasuries, has been quite extreme. I mean, you're getting the two-year move something like 10 basis points a day. Not that much, but that is, I mean, the move index is almost as high as it was in March of 2020. Maybe I should check maybe higher. Yeah, I'm going to.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“And if realized volatility isn't that high, it doesn't cause risk systems to be flashing red where people have to bail out. So there's no generalized panic, it's just it best. orderly deleveraging. Now the point you alluded to is a good one which is a deleveraging can be orderly until it isn't. In other words, a boundary's hit and everyone has to get out. But for some reason this year hasn't been like that. It really hasn't. So it's caused a great deal of pain, but it's been more like a dull toothache than a sudden. Shock to the system. Outside of crypto land and various physical commodities and so on, depending on people's positioning. But if you just look at the stock and bond landscape, Even throw currencies in. There have been no developed markets.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I can give you an answer that's probably two thirds wrong, but there's an element of truth to it. Imagine a market, any market, that went down five percent every day. Every single day I went down five percent. What's the standard deviation of that it's zero? Because the average day is down five percent, and there's no variation around the average day. So that is a non volatile market. It's just going down 5% every day. Now, in reality, people don't assume that the recent average is the actual expected return. But the point that is partly true, or at least somewhat true, is that if a market goes down in a very stable, trendworthy manner, People can rebalance. caught the risk a little bit. They can trade around the edges. They're not getting sudden margin calls. They might have margin pressure, but they're not being forced to liquidate.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I feel like, Hari, maybe I'm wrong that there have been a lot of down 2% days in a row. Like, I think that we have had maybe some down 9% weeks. And those down nine percent weeks, those are pretty rough. You'd think that they'd start to get people to start buying volatility. I also feel like volatility people, are they obsessing over a day, over, oh, it's realized over a day? Like it's a 1.6% move in a day down 1.2% in a day. But if you actually look at it on a weekly basis, I feel like the fact that I don't know. I just feel like The drawdowns don't seem moderate to me, but maybe I'm just I can give you an option.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“All right, so realized volatility is how much the market actually moves up or down. Implied volatility is how much the market is pricing in, forward volatility will be based on the price of options. And yeah, so then volatility mostly happens at the center of the distribution, but then tail risk is those extreme movements, which themselves have a price. Yeah, I did buzz through that.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“We see some stabilization in the short term, but at the cost at the exchange of added tail risk in the medium term. Not a prediction, but that seems to be what I'm seeing right now. I'm seeing more complacency as of november fifteenth, but the higher potential for a risk event.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“and the tenure has been trending strongly lower. We haven't had a volatility explosion. Had every so often people will say oh volatility doesn't matter it's not important anymore had happened in two thousand six Happened again in various times in the two thousand and ten's But fall is volat. It's a ultimately a measure of investor sentiment or investor desire to hedge or participate in nonlinear upside. And so I don't think it's going away. It might be a little less tethered to realized volatility than it used to. Again, that's a balance sheet constraint question. But I would not be surprised if”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Has been at least a moderate cause of the reversal because trend followers have been venting it, they've been increasing their leverage as the trends have built into this year, and the reversal in early November has been tough for them. They're still having a great year, but that may be a part of it. Risk parity type stuff may be a factor as well, I don't know for sure. But risk parity will increase position size if volatility goes down. Vault has gone down, somewhat. So I think we might be coming back into a slightly more normal looking over the past decade type environment where volatility is cheap but the tail risk has actually gone up. We haven't seen tail risk in the SP. We've seen it in other markets, obviously. But even the tenure and the dollar, the dollar didn't have a sudden spike, it's just been trending strong.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“That one inflation print, I don't think, changes the world, the seven point seven, I forget the exact number, annualized. But that's a market tremors. Where positioning obviously was unwound in a pretty big scale both in the dollar. Equity index hedging, equity index shorts, tenure shorts, and so on. And it may well be that trend following, which has had a banner year, where you're basically betting that prices will keep going in the direction they have been.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Well, in the equity world we've had a very well behaved bear market. It's no longer a bear market, but we had a very well behaved bear market, and it was quite expected various people like Ben Eiffert have pointed that out, so Just buying and rolling puts on the SAP would have made you nothing, he would be down for the year, and so it's been something where volatility has been actually quite rich for most of the year until November, I think last week we had a face ripping one day rally. That may have been the tenth of November, I forget the exact date. And Vall has gone down since then. And I think we may go back The dollar index which was phenomenal so far this year is down about seven percent since early. The 10 year yield has started to drop.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, if you wanted to talk a little about volatility we can do that too or about what's going on now and this, that and the other.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“When you buy an option, you just pay the premium, but to think that you don't even need to have the premium to pay is quite another thing. So”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Have you ever heard of a no margin option? Zero margin option. I think You and I enter into a like, I buy a put option for you, I buy a call option for you, but I put zero margin down. So not only do I pay for it with borrowed money, I pay for it entirely with borrowed money. We just book the exposure. That's what I've heard is going on in some of these market making firms.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I think that was called its excess edge where the hedge actually is a doubling down on the risk he took the first time. I don't know. I mean, that's a question of how is your firm set up? What are people allowed to do Much prop can you do? Because that's not a hedge at all, it's just a prop.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“What I meant there are no empowered Hari Krishans who the Hare Krishans have no power there, which is a bad thing. It's a very negative thing. The thing I was going to say is that there are Bitcoin miners. You just have an oil company, they hedge their thing, they hedge it by buying puts and selling calls on oil, right? So that because their business is enormously related to the price of oil. So if oil collapses, they need a hedge. Bitcoin miners, Do they do the same thing? No, they sell puts and buy calls. I'm not joking.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“I would suspect that there are some people who are just as smart as I am on these desks. The only thing is that you need someone who has the People need to believe that they know what they're doing. So if you have someone who really does understand risk but doesn't have the authority to make a statement that will be taken seriously by everyone else who's minting it, it won't work.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and Hari, there are not a lot of Hari Krishnans in traditional finance in terms of people who have your own understanding of volatility, but there are even fewer in crypto. So I don't know if on a lot of these desks, they have people like you who are saying, actually, maybe we should get some tail risks so we're not completely screwed below 10,000. Maybe we should just buy some tail protection. Maybe we should do a collar instead of selling a naked put. I don't know.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Goes up or it doesn't go down or Yes, an osty one if you're selling downside protection on crypto, that's very dangerous yep.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“And I've heard this, Hari, and this will definitely remind you of structured products in the traditional finance world. Some yield was generated by selling put options on Bitcoin. So when Bitcoin goes up or doesn't go down or fails to go down, there's no crash. You get the yield. But when Bitcoin falls, then you have to do forced selling. So it can be sort of a reflexive loop.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“And obviously something was going on there. Either it was a straight out Ponzi scheme or without going into that sort of muck. It was one of those things where, um, These tokens would be, or these The assets in the accounts would be hypothetated to other people, so they'd be lent out, reused, and reused again and again and again. Reusing treasuries is one thing. Reusing this stuff is a whole different thing or using pledging. One token to get a long position in an even lower quality token is sort of like layering on risk after risk after risk. And when you layer on one risk and another one onto another one, your risk probably doesn't go up by two, or because up by five. And if you do it three times it may go up by twenty five, who knows what the number is.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely, absolutely, as leverage upon leverage upon leverage in risky underlying assets. Now, With regards to crypto, I mean, there was a lot of this yield harvesting and so on, and people loved it, and it should have sent out a massive red flag from the very beginning. It's easy to say it now. But imagine that there were a token that were created, and the manifesto said no new tokens will ever be created again. What should the effective yield on that security, on that token be zero at the highest? Why? Because you need more tokens to pay the interest. This is something that my friend Stefan Storm told me once, and he's a mathematician, he was scratching his head saying, How can it be that various accounts are yielding eight percent or ten percent even when the supply is severely restricted of the underlying tokens?”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“So a lot of what you do is futures, which is contracts to receive something out there physically or In the future, and a lot of that is leverage. So there's leverage, but it's also in the future, and theoretically, and still in many cases, the fact that future serves a market function. So, for example, I'm a farmer, I harvest at a certain time of year, and I'm going to hedge by selling at a different time of year. But in crypto, there are these things, you've probably heard of, which are called perpetual futures, which despite the fact that it's called a perpetual future, it actually settles every day. So it's kind of like buying and selling the stock every single day. So if the time duration is just one day, it just kind of seems like a lot of leverage.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“who knows a lot of people in the industry, who knows what's going on behind the scenes, it's not a question of reading a book or a pamphlet and finding a bunch of rules and checking them off, which is what due diligence or operation seems to be. In order to be a real guard dog you need to know the industry, you need to know people, ask around, get a vibe for what's going on, figure out what's doable, what isn't doable, really experience based, and having someone like that in your outfit or you can talk to even if you're independent is very important, and so the oldies aren't completely out of play, I guess. I don't know.”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT
“There's a question as to how much of that you can recover, whereas if you only put five down or ten down, the most you can lose is five or ten percent, and the odds are that you'll get some of it back. So over committing cash or overcommitting funds or collateral to a Platform for transacting can be dangerous. And so having a good treasury function for a professional is very important. So every good firm has to”
2022-11-21 · Forward Guidance · Learning From Market Tremors | Hari Krishnan · IDENTIFIED FROM THE TRANSCRIPT