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Investing Prophet Jeremy Grantham Takes Aim at Climate Change

bloomberg.com

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Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#61

Post by buboard »

sigmaprimus wrote: post #58
joshu wrote: post #57

Earlier quoted context omitted.

Incorrect. Arbitrage is risklessly taking advantage of contemporaneous price differences by buying in one place and selling in another at the same time.

OK, but I still stand behind my premise. Bookies make money regardless by which team wins. Casinos show profits betting on red and black simultaneously because of the zeros. And it happens all the time in much more complex way in markets. Also the financial term I was thinking of I believe is called "Futures" and it is used to protect against large swings in currency values between countries. Inverters exploit this t…

Bookies and casinos are set up so thatvit is mathematically impossible not to win.

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#62

Post by mikeash »

tw1010 wrote: post #55
sigmaprimus wrote: post #49

Just as vast fortunes were made during the financial crisis of 2008 by selling the markets short ( see the film "The Big Short") I would expect there are people betting on climate change continuing down its current tragectory, and these people now have a vested interest in making this happen. I don't know how many other billionaires are putting their money on the pro climate change side but wouldn't a smart investor…

You're supposed to diversify your portfolio by betting on uncorrelated things. Betting both that something will go up and down is like placing money on both red and black, it doesn't make you any richer.

Can’t you construct a bet that a price will either go up or down, but not remain steady? I believe that’s called a long straddle but I’m not super knowledgeable here.

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#63

Post by lordnacho »

As a former fund manager, I found his description of current capitalism quite close to my own. Particularly the bit where he says markets are good at a lot of stuff, but not everything.

Has anyone else had that sort of intellectual journey, where you discover libertarianism, you learn all the tropes, you feel very confident, and then after a while you pull back a bit after finding a few issues? And I suppose on the other side of the spectrum as well?

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#64

Post by sigmaprimus »

tw1010 wrote: post #60
sigmaprimus wrote: post #58

Earlier quoted context omitted.

OK, but I still stand behind my premise. Bookies make money regardless by which team wins. Casinos show profits betting on red and black simultaneously because of the zeros. And it happens all the time in much more complex way in markets. Also the financial term I was thinking of I believe is called "Futures" and it is used to protect against large swings in currency values between countries. Inverters exploit this t…

I think this is wishful thinking. It'd be neat if there was incentive on both sides of the debate, to bet both against and for the idea that climate change will happen. Unfortunately that's not how it is: the real direction of the change in climate will be the most profitable option, and that's where investors will flood. And yeah, that might cause a self-fulfilling prophecy (incentivizing and accelerating climate ch…

Could you clarify your statement? Are you of the opinion that the money is already invested on the side that climate change can not be stopped? Or the opposite?

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#65

Post by sremani »

lordnacho wrote: post #63

As a former fund manager, I found his description of current capitalism quite close to my own. Particularly the bit where he says markets are good at a lot of stuff, but not everything. Has anyone else had that sort of intellectual journey, where you discover libertarianism, you learn all the tropes, you feel very confident, and then after a while you pull back a bit after finding a few issues? And I suppose on the o…

Well, Mother Nature did not read the US constitution. We will realize it sooner or later in life.

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#66

Post by clairity »

mikeash wrote: post #62
tw1010 wrote: post #55

Earlier quoted context omitted.

You're supposed to diversify your portfolio by betting on uncorrelated things. Betting both that something will go up and down is like placing money on both red and black, it doesn't make you any richer.

Can’t you construct a bet that a price will either go up or down, but not remain steady? I believe that’s called a long straddle but I’m not super knowledgeable here.

yes, but that severely limits your upside, and it’s harder to thread the needle (in both timing and pricing).

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#67

Post by AceJohnny2 »

lordnacho wrote: post #63

As a former fund manager, I found his description of current capitalism quite close to my own. Particularly the bit where he says markets are good at a lot of stuff, but not everything. Has anyone else had that sort of intellectual journey, where you discover libertarianism, you learn all the tropes, you feel very confident, and then after a while you pull back a bit after finding a few issues? And I suppose on the o…

> Has anyone else had that sort of intellectual journey, where you discover libertarianism, you learn all the tropes, you feel very confident, and then after a while you pull back a bit after finding a few issues? And I suppose on the other side of the spectrum as well?

For most people, that transition happens between the teenage years and adulthood.

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#68

Post by clairity »

sigmaprimus wrote: post #58
joshu wrote: post #57

Earlier quoted context omitted.

Incorrect. Arbitrage is risklessly taking advantage of contemporaneous price differences by buying in one place and selling in another at the same time.

OK, but I still stand behind my premise. Bookies make money regardless by which team wins. Casinos show profits betting on red and black simultaneously because of the zeros. And it happens all the time in much more complex way in markets. Also the financial term I was thinking of I believe is called "Futures" and it is used to protect against large swings in currency values between countries. Inverters exploit this t…

futures originated from commodities trading, where you wanted to lock in the price of a ton of corn or wool or whatever because you fear the price will go up.

you don’t need them for currency arbitrage. you just need very fast connections to multiple currency markets, low transaction costs, and mispriced exchange rates.

it’s riskless because the money itself is mispriced and you can buy it for one price (in your own currency) and sell it for another all in one transaction. you get the difference for free. that’s what makes it riskless and that’s what makes it arbitrage.

keep reading those investopedia articles, it’s all in there somewhere!

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#69

Post by sigmaprimus »

buboard wrote: post #59
sigmaprimus wrote: post #49

Just as vast fortunes were made during the financial crisis of 2008 by selling the markets short ( see the film "The Big Short") I would expect there are people betting on climate change continuing down its current tragectory, and these people now have a vested interest in making this happen. I don't know how many other billionaires are putting their money on the pro climate change side but wouldn't a smart investor…

Even shorters need to make their gains from someone else . You are assuming that there are many people betting that climate change will not happen ? I think it’s safe to assume that climate change has been priced into the market.

I'm sorry I must have misread the article we are all commenting on, I thought "investing prophet Jeremy Grantham" wast investing the majority of his wealth in trying to stop climate change, maybe I'll read the article again. From your comment I'm way off, or maybe you didn't read it?

Re: Investing Prophet Jeremy Grantham Takes Aim at Climate Change

#70

Post by ham_sandwich »

clairity wrote: post #66
mikeash wrote: post #62

Earlier quoted context omitted.

Can’t you construct a bet that a price will either go up or down, but not remain steady? I believe that’s called a long straddle but I’m not super knowledgeable here.

yes, but that severely limits your upside, and it’s harder to thread the needle (in both timing and pricing).

In a straddle/strangle you have unlimited upside on both legs (up and down/call and put). It’s a matter of determining if the long gamma+long volatility position is worth the price you pay in option premium up front and decay thereafter (theta).
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