Anytime somebody has been efficiently analyzing the markets for many years, I take note of their deep dives. Paul Zummo has been doing considerate, helpful market evaluation for JPM for 3 a long time.
That is from his current “Anniversary Insights.”
Listed here are 10 often-overlooked insights that will help you make higher funding selections:
1. Be a skeptic.
Strategy due diligence from the angle of the place does the providing “break”?2. Volatility isn’t your enemy.
Allocators typically focus an excessive amount of on supervisor volatility; in a portfolio context, it’s not often the problem.3. Deal with the tail.
Being “uncorrelated” is sweet; being uncorrelated within the tail is highly effective.4. Have the braveness to make errors.
Mitigate pointless dangers however take calculated bets.5. Simply say no.
You’re extra prone to remorse making a failed, poorly conceived funding than lacking an excellent one.6. Foundation kills.
Pay attention to misalignment between your longs and shorts, as two bets are riskier than one.7. Don’t be afraid to run into fires.
A few of the biggest funding alternatives and supervisor entry are sourced throughout dislocation.8. It’s solely an excellent funding if you happen to can maintain it.
Stress check not solely the portfolio but additionally how the enterprise, financing and counterparty danger maintain up beneath materials market strain.9. The alternative of a protracted isn’t a brief.
Nice quick sellers are wired in another way; don’t anticipate success on the lengthy aspect to essentially translate to a profitable quick e-book.10. Don’t make logical selections primarily based on flawed data.
Take the time to make sure high quality inputs and admire the flood of biased data throughout market extremes.
Try “10 easy however highly effective features of due diligence,” numbers 11-20 on this listing; and “10 reminders that will help you keep a step forward,” nos 21-30 additionally from the complete listing of 30…
Supply:
JPMAAM’s Pearl Anniversary Insights: 30 “pearls” of knowledge from our final 30 years
by Paul Zummo
JPM, April 2025
