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Asymmetric Investment Returns

Asymmetric Investment Returns is a blog authored by Mike Shell since 2006, covering topics about asymmetric investing and trading for asymmetric risk/reward in pursuit of asymmetry.

Navigating Asymmetric Risks in Unstable Times: Insights from Ray Dalio’s Big Cycle Framework

November 3, 2024

In "We Will Soon Find Out," Ray Dalio explores what he sees as a pivotal moment in the U.S.'s political and social trajectory, which he frames through his theory of the "Big Cycle." According to Dalio, the country is in "Stage 5" of this cycle, where internal divisions and systemic stresses are high, and he suggests we are on the cusp of "Stage 6," a period he associates with civil war or intense societal upheaval.

Comparative Analysis of Key Economic Indicators: Trump vs. Biden Administrations

October 31, 2024

Understanding how presidential administrations influence economic indicators is key to assessing their impact on American prosperity and stability. The chart provided compares various economic metrics under the Trump and Biden administrations, spanning inflation, wage growth, income metrics, job growth, deficits, and other critical factors. This article provides an analysis of these data points, emphasizing the contrast in economic performance and policy outcomes between the two administrations.

Interpreting the VIX Term Structure: What the Market is Saying About Volatility and the 2024 Election

October 28, 2024

The recent VIX term structure chart reveals interesting insights into market sentiment around volatility heading into the 2024 U.S. election. Currently, we observe an initial drop in volatility expectations for December, followed by a steady rise through mid-2025. This structure suggests that while traders anticipate relatively calm conditions immediately surrounding the election, they expect volatility to pick up significantly afterward.

Understanding the Flow of Corporate Buybacks: Implications for Investors the Rest of 2024

October 25, 2024

In 2024 U.S. corporate stock buybacks have reached unprecedented levels, making them an essential consideration for investment managers pursuing asymmetric returns. The latest insights from Goldman Sachs reveal that buyback activity, led by U.S. corporates, remains a significant force in the equity markets, promising to influence the market dynamics through year-end and beyond.

The Active Advantage in Pursuing Asymmetric Investment Returns from Bonds

October 21, 2024

In the ongoing debate between active and passive management, there is a clear divergence in performance between equities and fixed income. Recent data reveals how active management excels in the bond market, presenting a strong case for investors aiming to achieve asymmetric risk/return profiles.

Stocks Like Nvidia (NVDA) That Reach an All Time High are Free to Melt Up

October 20, 2024

When a stock reaches an all-time high, there is no overhead resistance based on previous price levels because it hasn't traded above that price before. But there are several factors to consider regarding selling pressure and market behavior: