Sentences with phrase «excess financial leverage»

«Our long - standing philosophy has always been that excess financial leverage was not a good bedfellow with value investing» Richard Pzena

Not exact matches

Sometimes a larger allocation to precious metals is recommended — either because precious metals are highly undervalued against other assets or there's a high financial risk (e.g. excess leverage in the markets).

The plumbing and mechanics of the synthetic gold market, in our opinion, are symptomatic of a more generalized preoccupation in the financial markets at large for risk mitigation, and a quest for greater leverage during a market phase where returns have been compressed by an excess of capital.

This highly flawed concept, widely taught in MBA and financial engineering programs, perceives volatility as an exogenous measurement of risk, ignoring its role as both a source of excess returns, and a direct influencer on risk itself... Systematic strategies are based on market volatility as a key decision metric for leverage... The majority of active management strategies rely on some form of volatility for excess returns and to make leverage decisions.

Correlation risk: «The concept of diversification is the foundation of modern portfolio theory... The financial engineer... reduces the risk of a portfolio by combining anti-correlated assets... All modern portfolio theory does is transfer price risk into hidden short correlation risk... Many popular institutional investment strategies derive excess returns via implicit leveraged short correlation trades with hidden fragility... Correlation risk can be isolated and actively traded via options as source of excess returns.

The deepening recession and spreading financial crisis is the beginning of the unwinding of about three decades of financial leverage and spending excesses.

It is simply a question of how the excess leverage presents itself through the financial system.

A Net Financial Debt to Total Assets Ratio in excess of 50 % would be a warning sign of too much leverage.

The complex financial derivatives continue to be made, which further entangled the system in the web of excess trust and leverage requirements.