Aditya | Investor & Operator

Managing Partner, Convexica Capital.
Posts about finance.

[Aditya | Investor & Operator @InvestorAditya]

What if the biggest risk in your portfolio isn’t equities, but your belief in bonds?

Let's talk about the failure of the 60/40, financial self-destruction, and a macro framework known as "The Turkish Portfolio."

A thread for capital allocators 🧵👇

[Pod Risk Manager @sadandlonely_69]

In honor of some “pods blowing up” and me being traveling I will outline some concepts about pod risk management about which I do know a thing or two, as my name might suggest. 

It is a common perception that pods are factor beta neutral and thus largely hedged. That is not quite true. A truer statement is that they are factor beta neutral to the extent they can measure the exposures. 

Most equity risk models are derivatives of the original axioma and barra factor models. There are now many things that go into this but at their core they are a 12 (IIRC) variable linear regression. And mathematically, the unexplained remainder, the error term, is assumed to be the alpha (Upon which the team gets paid). You well recognize most of these factors: size, momentum (short and long), quality, dividend, domicile, sector, etc. 

Now even the dull among you may note that there are in fact many other things that go into a stock. That’s true and that’s one reason why many people at the pods are very rich. There is though a very active and live debate to the highest level of these firms as what you “want” in the other bucket. On the one extreme, scheduling a proprietary drone flyover on the Aurora AV truck up fitting facility to measure parking lot activity vs expected timeline….that feels like pretty good alpha. On the other extreme, going long the Canadian listing rather than the U.S. listing because the Canadian listing diversifies the domicile score so you get a higher portfolio level idio score…..that doesn’t feel like great alpha. But the range is wide: paying GS a billion dollars so your team is the first meeting at the conference? That’s kind of the pod scale advantage. Albeit less so if every other pod is in the room. Going balls long large cap domestic U.S. GLP-1 manufacturers vs non GLP-1? Well that kind of is thematic alpha (depending on the work put in by analyst), but even if you’re of the opinion fuck it, let the kids rip (a reasonable view) you also know at the levered portfolio level that we aren’t measuring that risk completely. This line can really be illustrated with the concept of a “custom factor”. Maybe going long a shit load of SPACs is alpha, maybe it isn’t, but how the FUCK are you gonna build a portfolio level SPAC factor exposure loading in late 2021 when spacs didn’t functionally exist until 2021????

Anyways, interesting & active philosophical debate but there are some downstream derivatives. 

Firstly, as a well known matter, 6 sigma events happen in finance all the time. There’s one every year in some corner of the market. So ex ante we know our models aren’t “great”. 

Second, everyone knows the agent is an unobserved blind spot. It’s impossible to actually “know” why the analyst and PM are doing anything. You like to think they’re doing it on the back of deep fundamental quality work, but the median analyst and PM isn’t good at their job. So that assumption is known to be unreliable. The capital allocation solution to this is momentum chasing at the portfolio level: you allocate more to winning pods and you cut the losers fast. This is a brilliant approach because it means the pod business model is capital light- they identify and scale the good teams without actually having to invest in knowing which pods have “good” process. It’s worth really appreciating that point because it’s one of the true genius aspects of the model, and at its core it’s why the GPs are so fucking rich. (Deep finance readers will note that some of the original papers on factors saw that one of the earliest possible explanations for the decade-long trend nature for factor performance is implicit fund flow pressure from the momentum chasing nature of capital at the LP level)

(Continued in reply)

[Aditya | Investor & Operator @InvestorAditya]

True. Nature of their investments. Fixed income guys are more pessimistic vs equity guys are optimistic. Fixed income guys have limited upside, more downside and so get paid a coupon for the asymmetric risk. Equity has more unbounded upside and more of a story attached to it. So attracts the “emotional” optimistic types.

[Aditya | Investor & Operator @InvestorAditya]

@VisualCap India?

[Aditya | Investor & Operator @InvestorAditya]

@sanjeevsanyal Rather make this book mandatory in all colleges, How to Lie With Statistics- Darell Huff. The manipulation in the image is not due to stats ignorance but deliberate.

[Aditya | Investor & Operator @InvestorAditya]

Stop treating this like a quirky emerging market anomaly. The macro regime has shifted, and Western portfolios haven't caught up.

If bonds no longer diversify, the modern portfolio is broken. What do you hold instead?

#AssetAllocation #PortfolioConstruction #GlobalMacro

[Aditya | Investor & Operator @InvestorAditya]

What if the biggest risk in your portfolio isn’t equities, but your belief in bonds?

Let's talk about the failure of the 60/40, financial self-destruction, and a macro framework known as "The Turkish Portfolio."

A thread for capital allocators 🧵👇

[Aditya | Investor & Operator @InvestorAditya]

Stocks and bonds fell together. The 60/40 balanced portfolio failed the one year it really needed to work.

Turkey didn't see itself as a cautionary tale either; it just kept doing what felt normal until it wasn't.

[Aditya | Investor & Operator @InvestorAditya]

@junkbondinvest CoreWeave should issue some convertibles then. Might be cheaper financing for them.

[Aditya | Investor & Operator @InvestorAditya]

Update: Silver $94/oz, gold $5,280. Ratio crushed to 56:1. Regime flip in real time. Who's still sleeping on this?

[Aditya | Investor & Operator @InvestorAditya]

Most still treat silver like cheap gold in 2026.
Dead wrong.
They price the metal. Miss the convexity.

[Aditya | Investor & Operator @InvestorAditya]

6/
Gold/silver ratio held 10-16:1 for centuries.
Ripped past 100:1 in 2025.
Now crushing as silver blasts off again.
Not price noise.
Regime shift screaming.

[Aditya | Investor & Operator @InvestorAditya]

11/
Biggest silver blind spot you’re still carrying in 2026?
Reply. Tag someone who needs to wake up.

[Aditya | Investor & Operator @InvestorAditya]

10/
It doesn’t belong in portfolios for price targets.
It belongs for what it does when regimes flip.
Most portfolios aren’t built for flips.
Most lenders aren’t either.
Yours?