I loved the movie “The Big Short”.
This was a really interesting interview by Patrick O’Shaughnessy with Danny Moss, the trader at Frontpoint Capital that put on the trade.
It was interesting to hear his take on what actually happened and working with Michael Lewis.
Also, really interesting to learn how he’s thinking about Passive Vs. Active investing and the effects on the market. For example, as ETFs grow, an ETF can be the top shareholder of a given company (think GDXJ). If this is the case, the CEO is now working numbers to stay in the ETF. He/she looks at the ETF criteria and runs the business to make sure he/she stays within those parameters. Last thing you want is to piss off your top shareholder and cause a selloff.
More on Passive Vs. Active investing to come as I’ve been reading a lot about this lately and it is VERY interesting.