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Just for interest, just for fun

Александр » 27 май 2020, 09:40

Видео про финансовый рынок, дал перевод некоторых слов, думаю интересно для тренировки английского, да и для понимания финансовых инструментов посмотреть.

Video «The Greatest Trade Ever» most interesting words transcript.

0:06 Urge – позыв, импульс, толчок, убеждать, побуждать, подгонять;
0:16 Hedge – живая изгородь, преграда, ограничивать, мешать, окружать, препятствовать;
— A Hedge fund is an investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction and risk management techniques to improve performance, such as short selling, leverage and derivatives.
0:47 Smash – громить, ударять, катастрофа, разгром, с размаху;
1:29 Withdraw – изымать, отзывать, забирать;
Withdrawal – вывод, изъятие;
1:36 Stag – олень, холостяцкий;
Stagger – шататься, колебаться, ошеломлять, быть в нерешительности;
Staggering – ошеломляющий, поразительный;
1:44 Stag – начало;
2:25 Swap – обмен, сделка, менять;
Credit Default Swap (CDS) – a financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event. The seller of the CDS insures the buyer against some reference asset defaulting. The buyer of the CDS makes a series of payments (the CDS "fee" or "spread") to the seller and, in exchange, may expect to receive a payoff if the asset defaults;
3:04 Mortgage – ипотека, заём, закладывать, ручаться;
Loan – ссуда, заём, ссудный, давать взаймы;
3:04 Bond – облигация, связь, обязательство, узы, связывать, скреплять;
3:15 Drain – отток, осушать;
3:42 Implode – взрываться;
3:50 Humongous – огромный (huge);
3:50 Ominous – угрожающий, зловещий;
4:49 Contain – содержать, сдерживать;
4:51 Substantial – существенный, значительный;
4:55 Equity – капитал;
Equity market – рынок акций;
5:03 Bed – постель, спать, стлать подстилку;
5:03 Bet – ставка, пари, держать пари;
5:48 Yield – давать, приносить, доходность, урожай;
8:41 Gain – прибыль, выручка, усиление, прирост, получать, извлекать выгоду;

Вот расшифровка видео:

00:00 I do right now they'll want to bring in
00:01 Bill Ackman on the phone he took the
00:03 Twitter today to urge the president to
00:05 take more dramatic measures to stop the
00:07 spread of the virus bill I thank you for
00:09 joining us today thank you God
00:11 this interview is from March 18th where
00:13 CNBC had hedge fund manager Bill Ackman
00:16 on its shell during this interview
00:19 Ackman was in the middle of selling a
00:21 position that had increased a hundred
00:23 times in value and made his firm a
00:25 profit of 2.6 billion this video we'll
00:28 go through that trade which some are
00:30 calling the greatest trade of all time
00:31 we'll let you be the judge of that
00:33 but making a hundred times your money in
00:35 a thirty day period works out to this
00:37 percentage yearly return a number so big
00:39 that we don't even know what this number
00:41 is but before going into the trade
00:43 welcome to our channel the market is
00:45 open please smash the like button if you
00:47 like this type of video also check out
00:49 our second channel TM IO Tesla which
00:51 features Tesla videos so who is Bill
00:55 Ackman well he's a legendary hedge fund
00:57 manager that manages about 12 billion
00:59 dollars in assets 6 billion through a
01:01 publicly traded stock that anyone can
01:02 buy and it's listed on the English and
01:05 Amsterdam markets and he manages about
01:07 six billion dollars privately you might
01:09 also have heard of him as the guy who
01:10 tried to unsuccessfully short Herbalife
01:12 a nutrition supplement company this
01:15 failed bet from about 2013 to 2018 ended
01:18 up costing his firm about a billion
01:19 dollars this led to Ackman having
01:21 terrible performance from 2015 to 2018
01:24 in fact his returns were negative each
01:26 year and many investors actually began
01:28 withdrawing from his fonda Ackman was
01:30 being counted out and he was motivated
01:32 to turn around this performance in 2019
01:34 his fund returned a staggering 58% and
01:37 he became once again one of Wall
01:39 Street's favorite fund managers his fund
01:41 since inception has returned 885 percent
01:45 compared to only two hundred and fifty
01:46 nine percent of the S&P 500 this works
01:49 out to about a fifteen percent yearly
01:50 return for Ackman compared to only 7.5
01:53 percent of the market so Ackman's powers
01:56 were growing as we approached the crisis
01:58 in early 2020 so what was Ackman's big
02:01 short position and how is it different
02:03 from the famous original big short
02:04 position Michael burry a famous hedge
02:07 fund manager was featured in a book
02:09 called the big short and later a
02:10 Hollywood movie in 2015
02:13 of his famous trade that helped his fund
02:15 return a hundred and sixty-seven percent
02:17 in 2007 and he closed his fun earning
02:20 almost 700 percent before fees brewery
02:23 like Ackman bought credit default swaps
02:25 we will soon explain how these swaps
02:27 work in a more thorough example but for
02:29 now let's let Warren Buffett the
02:31 legendary investor explain the basics
02:34 [Music]
02:35 they can be a very destructive
02:38 instrument I mean if you think about it
02:39 you can't go out and insure my house
02:42 against fire because you do not have an
02:44 insurable interest as they call it in
02:46 the trade because once you insure my
02:48 house against fire and you may decide
02:51 that you know that maybe dropping a few
02:54 of matches might be a good idea however
02:57 there is a key difference enactment
02:59 speak short to burries burry started
03:01 shorting mortgage bonds in 2005 and it
03:04 took him until 2007 to realize his
03:06 profits this was a big issue as
03:08 investors worried when the fund lost
03:11 eighteen percent of their money in 2006
03:13 the position was such a liquidity drain
03:15 that if barese other assets stayed flat
03:17 his fun would lose 8% a year because of
03:20 this client started withdrawing their
03:22 money and brewery had to cut his
03:23 position by almost two-thirds as clients
03:26 withdrew money
03:27 it seemed that burry would have to
03:28 liquidate the position at a huge loss to
03:31 mitigate this risk he took draconian
03:32 measures and he suspended all client
03:34 withdrawals even with the suspension of
03:36 withdrawals if the bet didn't pay off in
03:38 2007 and if it took another two years
03:41 for the mortgage market to implode burry
03:42 may have lost it all
03:44 fortunately for him the bet did pay off
03:46 in 2007 and he was able to liquidate his
03:48 position at a humongous profit so
03:50 imagine Bill Ackman now his trade is
03:52 almost exactly the same as Michael
03:54 buries except instead of taking about
03:56 two years to pay off he got his pay off
03:58 in about 30 days how did he do it let's
04:00 go through with the big short number two
04:02 in February 20 21 was increasingly
04:05 concerned that the market was about to
04:07 blow up because of the coronavirus he
04:09 said the following when I did the math I
04:11 said you know the laws of probability
04:13 tell me this thing is going to be
04:15 everywhere every one fifty percent of
04:18 the world is going to get infected and I
04:21 sort of rolled this thing forward and I
04:24 said it's just it's just a matter of
04:25 time
04:26 at first he was so nervous that he
04:28 thought about liquidating just all his
04:29 assets and going a hundred percent in
04:31 cash
04:31 he then calmed down and he thought of a
04:33 way to protect his portfolio without
04:35 selling his stocks he then updated
04:37 investors on March 3rd with an ominous
04:39 message he said during the past 10 days
04:41 we have taken steps to protect the
04:43 portfolio from downward market
04:44 volatility we have done so because we
04:46 believe that efforts to contain the
04:48 coronavirus are likely to have a
04:50 substantial negative impact on the US
04:52 and global economies and on the equity
04:54 and credit markets Bill Ackman like
04:57 brewery used credit default swaps to
04:58 make money the reason for using credit
05:01 default swaps is is actually a safer way
05:03 to bed for defaults and bonds so even
05:05 though the movies called the Big Short
05:07 technically you're just buying insurance
05:09 and in reality you're actually going
05:10 long in the position so essentially as
05:13 Warren Buffett says you're basically
05:15 buying insurance on a home but you don't
05:17 own the home so you actually just hope
05:18 it burns down but if the house doesn't
05:20 burn down you only risk losing those
05:22 insurance premiums that you paid
05:23 typically a usual short position has
05:26 unlimited losses if the asset keeps
05:28 going up in value so credit default
05:29 swaps protect your downside risk
05:31 so Ackman used credit default swaps as
05:34 his weapon of choice to bet against the
05:36 market will later show at the end his
05:38 risk if the bet did go awry
05:41 while burry bet against mortgage bonds
05:43 Ackman turned his eye towards corporate
05:45 bonds which were trading at historically
05:48 low yields meaning the market determined
05:50 that these assets were the safest
05:52 they've ever been in corporate bond
05:54 insurance was also at historic lows at
05:56 only 50 basis points or 0.5 percent he
05:59 felt given the effects of the virus the
06:01 price for insurance would rise from 50
06:03 basis points to some higher number it
06:05 eventually did rise to a price of about
06:07 three times this 50 basis points or 1
06:09 point 5 percent but this begs the
06:11 question how did Ackman then make a
06:13 hundred times his money if the price for
06:15 insurance only rose 1 percent or about
06:17 three times so first if you'd like to
06:19 calculate how a credit default swap is
06:22 valued we have a free sheet on our
06:24 patreon page showing different type of
06:26 investor inputs but basically for credit
06:28 default swap insurance to rise from 0.5
06:30 percent to 1.5 percent you would need
06:32 the probability of bond default to go
06:34 from about 1.5 percent to 5 percent this
06:37 essentially just means that you would
06:39 expect now 5% of all bonds to default so
06:42 this happened but how did Ackman make a
06:44 hundred times his money well he bought a
06:46 lot of insurance protection Ackman said
06:49 in his update letter on March 25th that
06:52 he paid only 27 million for credit
06:54 protection what he doesn't necessarily
06:56 spell out is this 27 million has to be
06:58 paid monthly for five years so per year
07:01 that would be 324 million dollars so if
07:04 the bet didn't pay off in a year he
07:06 would lose 6% of all his funds money or
07:08 324 million dollars on just this one
07:11 position but if we take that number of
07:13 324 million a year divided by the credit
07:16 default insurance rate of 0.5% that
07:20 turns into sixty four point seven
07:21 billion of bonds that Ackman was buying
07:24 protection on to give a sense of how
07:26 large that is the u.s. investment grade
07:28 corporate debt market is just over six
07:30 trillion so Ackman was essentially
07:31 buying insurance against 1 percent of
07:33 all these bonds the second part of our
07:35 sheet is on the second tab and you can
07:37 see how this value would go from about
07:40 1.6 billion to about 4.3 billion here is
07:44 why so the first one is imagine you're
07:46 an investor getting about 27 million
07:49 dollars a month which is what Ackman was
07:51 paying 27 million a month for 12 months
07:54 times five years is about 1.6 billion
07:57 the reason it is 5 years is a typical
08:00 credit default swap contract is for 5
08:02 years the value of this holding is then
08:05 discounted by what the US Treasury rate
08:07 is which was around 1.5 percent so the
08:09 present value is about one point five
08:11 five billion however what happens now if
08:14 the risk rises by three times and now
08:16 you're paying insurance premiums of
08:17 about seventy three million dollars a
08:19 month seventy three million dollars a
08:21 month times 12 months times five years
08:23 is about four point three billion or
08:25 about four point two billion discounted
08:27 at the risk-free rate if you subtract
08:29 the difference between the two present
08:31 values the difference is an increase of
08:33 about two point six billion dollars in
08:35 value which is the profit that Ackman
08:37 made so Ackman quickly had a two point
08:39 six billion dollar paper gained because
08:41 he can now sell this position to someone
08:43 else who wanted to buy credit insurance
08:45 quickly let's just see what would happen
08:47 if the price for credit insurance
08:50 dropped by half as can be seen Ackman's
08:52 paper value
08:53 would decline by about eight hundred
08:55 million but Ackman was fairly confident
08:57 with credit default swaps at record lows
09:00 for investment grade bonds that they
09:01 wouldn't go much lower therefore he
09:04 didn't expect to lose this amount the
09:05 money on march 18th
09:07 when Ackman went on CNBC he had already
09:09 sold half his position and he was able
09:11 to completely exit his position by March
09:13 23rd right at the peak prices have
09:16 declined somewhat since then but they
09:17 are still quite elevated as can be seen
09:19 credit default swaps are still at about
09:21 a hundred and twenty basis points for
09:22 insurance well above the price that
09:24 Ackman originally bought his position at
09:26 what was even better for Ackman is that
09:28 he exited his big short position around
09:31 March 24th when the market was at its
09:33 lows or down about 24 percent he then
09:36 began using this profit to buy his
09:38 favorite stocks Ackman said he increased
09:40 his stake in Hilton by 34 percent Howard
09:42 Hughes by a hundred and fifty eight
09:44 percent and he even bought more of
09:45 Buffett's company Berkshire Hathaway
09:47 this a hundred times profit on a twenty
09:49 seven million dollar investment has led
09:51 Ackman to be up sixteen point five
09:53 percent this year compared to the S&P
09:55 500 which is down a bit more than eleven
09:57 percent on the air and he's part of a
09:59 trade that may inspire another movie and
10:01 may go down as one of the greatest
10:02 trades of all time let us know in the
10:04 comments what trade you think was better
10:05 Ackman's was certainly better on paper
10:08 but burry definitely did a lot more
10:09 research lachman's bet relied mostly on
10:12 his keen sense of intuition so was
10:16 Ackman yelling fire on March 18th
10:18 Ackman appeared on CNBC and this
10:20 interview has become quite controversial
10:22 because during it he said that the US
10:24 should shut down its entire country for
10:26 30 days thank you a number of ideas you
10:29 put forth I'm gonna read one of them for
10:31 our viewers to start mr. president the
10:33 only answer is to shut down the country
10:35 for the next 30 days and close the
10:36 borders you say tell all americans that
10:39 you are putting us on an extended spring
10:40 break at home with family keeping only
10:42 essential services open a lot of people
10:45 say his position would greatly benefit
10:47 from this shutdown at first blush it
10:49 appears he bought fire insurance and
10:50 then yelled fire hoping the insurance
10:52 premiums would increase in value this is
10:54 something that Buffett has criticized as
10:56 we showed in that video however here are
10:58 the actual facts Hackman had bought his
11:00 position in late February and as can be
11:02 seen prices had already increased by
11:04 then so the market was already yelling
11:06 fire by this time Ackman then appeared
11:08 on TV and he started yelling fire too
11:10 but the market was already yelling it at
11:11 this time
11:12 so essentially Ackman bet there would be
11:13 a fire before everyone else did then
11:15 everyone could see the fire and fire
11:17 insurance prices went up and then Ackman
11:19 went on TV and he started yelling fire
11:21 in addition Ackman did protect himself a
11:23 little bit more because he said during
11:25 the same interview that he was buying a
11:26 lot of stocks such as Hilton later that
11:29 day he also sent out two tweets saying
11:31 that stocks were at a bargain of a
11:32 lifetime he said that is why we are
11:34 buying stocks these are at bargains of a
11:37 lifetime if we manage the crisis
11:38 correctly so what do you think was this
11:40 interview by Ackman on CNBC unethical we
11:43 don't think so but we'd love to hear
11:44 your thoughts thank you for watching
11:46 please give the video a like if you
11:47 enjoyed it.
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