Penny stock investing – Podcast Episode #26: Jeremy Schwartz, “You Should Be Hedged a Lot More Than You Are” | Meb Faber Research

Penny stock investing

*We experienced some technical issues with Episode #26. We’ve resolved them going forward. Thank you for your patience with the slightly reduced audio quality in this episode.


Episode #26: “You Should Be Hedged a Lot More Than You Are”


Guest: Jeremy Schwartz. Jeremy has been the Director of Research at WisdomTree Investments, Inc. since October 2008. He was previously the Deputy Director of Research at the firm from February 2007 to October 2008. Jeremy is responsible for the WisdomTree Equity Index construction process and oversees research across the WisdomTree equity family.

Date: 10/19/16

Run-Time: 51:38

Topics: If you’re ready to dive straight into the deep end, Episode 26 is for you. The guys waste no time, starting off with complicated topic of currencies. Jeremy takes issue with the currency-stance belonging to some former, unnamed Meb Faber Show guests. Specifically, he challenges the idea that currency hedging is expensive. Not true, he says. It’s only “selectively” expensive. You can actually get paid to hedge certain currencies. He gives us more details, leading to his overall takeaway: You should be hedged a lot more than you are. Meb then asks about any rules that might be applied when using a dynamic currency-hedging strategy. Jeremy gives us his thoughts, telling us when we want to be hedged versus when we don’t, as well as two good signals to use – interest rate differentials and momentum. Where are we overall today? Well, Jeremy says that there is no country so cheap that his shop would take their hedge ratio to zero. Eventually, Meb switches the topic to factor investing. Jeremy gives us his take, noting that minimum vol is where things are most expensive. The guys then discuss factor investing as it pertains to the bond space – in essence, moving away from market cap weightings. Why is that important for bond investing? Well, do you want to give the most weight to the countries issuing the most debt? Unlikely, but that’s how market cap weighting works with bonds. Next, Meb steers the conversation toward liquid alts, specifically managed futures. That’s followed by a great discussion on corporate buybacks. Gotta watch out for that dilution from new share issuance. Interestingly, it turns out that buybacks are largely a U.S. phenomenon. Jeremy agrees, but points out some spots around the globe where that might be changing. As we near the end of the show, Meb asks about the opportunities Jeremy sees going forward. His response in a nutshell? “People are underinvested overseas.” There’s plenty more, including an asset class that is coming up on being down a whopping six years in a row, as well as how Meb hacked a VPN service that enabled him to watch the last Super Bowl from a tiny village in Japan. How’d he do it? Find out in Episode 26.

Episode Sponsors: Founders Card and Lyft

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Links from the Episode:

Beautiful, Useful, Magical:

Jeremy:  No Wait App

Meb:  SeatGeek (also mentions Hooch and Reserve)

Transcript of Episode 26:

Coming soon.

– Penny stock investing

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