Daniel: High leverage forces multi-manager hedge funds into short-term momentum trading
Vincent Daniel · Porter Collins and Vincent Daniel - Big Shorts and Big Longs (Capital Allocators, EP.325) · Jul 3, 2023 · at 24:12
Vincent Daniel, co-founder of Seawolf Capital, discusses why pod-based multi-strategy hedge fund platforms cannot execute contrarian investment theses.
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“If you work at these shops, it took me a while to figure out, but almost all of them Are 90, 95% of the time long short-term momentum, which is in English is long something that is working right now. And when you think why they have to do it, if you're so levered the way they are, the last thing you can be is contrarian because contrarian takes time and their business models don't allow time or risk of loss. It just doesn't work.”
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