Wisdom in fragments

It's been a very difficult time, that's why we're here. We're here to preserve people's risk hedging and transfer needs.

Former CEO of CME Group, global derivatives exchange leader.

In our paper we report an 86% accuracy in predicting the up and down movements in the Dow Jones three or four days out. The question is how you turn that into a money making strategy. It could be- for example- that you lose ALL your money in that other 14%!

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When I have a bad day, that has nothing to do with the market! But how I respond to that bad day may be a reflection of a general level of discomfort about how the economy is doing and so forth. It's an out-of-bounds signal. In that sense, it's pretty unique!

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In science, one never shows causality. Causality is something philosophers are concerned with, not scientists. I cannot stress this in strong enough words- we have not shown a causal link between the public's mood state as we measured it from twitter data feeds, and the market.

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I think behavioural economics has now become an accepted part of the thinking on markets- it's generally accepted that people's decision making is heavily influenced by emotional state and various other behavioural biases in comparison to previous models that assumed rational decision making in the markets.

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As an economy is declining, we see an increase in sell-side interest across all asset classes, as holders are looking to get liquidity and shore up their own balance sheets. As far as an up-economy, that's where we see buy-side interest as buyers get greater risk-tolerance.

Investors are always looking for something different, where they can get Alpha… where they can get diversification… where they can get non-correlation. It's not necessarily linked to them being 'US Assets' but more that they are unique assets regardless of domicile and they have not previously had access to them.

The ability to bake your business over a longer period of time and become a stronger public company is therefore critical and is a driver for why they list with us.

When you are a public company, you are all-but forced to think on a quarterly basis. That's how long people hold you on average, between 2-3 months is the average hold period for equity investors. It's therefore much more difficult to think in a long-term strategic way and increase value.

The public markets have slowly but surely become hostile to the small growth companies. Where the public markets used to serve any type of company, they are now only beneficial to companies in excess of a $1 billion market-cap. Sub $1 billion companies really don't have a place to turn for funding, growth and liquidity.

Much jitteriness in this recent crisis has come down to 'flying blind' – where investors and risk managers have been caught somewhat unaware, and do not have the visibility to make decisions with support.

We define the credit risk of a bond portfolio as the volatility of the CDS basket which would perfectly hedge the sovereign risk of the portfolio.

Traditional index bond management gives higher index weightings to the most indebted countries, regardless of their capacity to service their debt. A country facing financial hardship and trapped in a debt spiral to remain solvent would see its index weight increase until the whole mechanism collapses.

People underestimate their personal probability of encountering negative events. It is not so much that individuals believe that negative events will not happen, but rather that these events are relatively unlikely to happen to them.

Former Premier of New Brunswick & Canadian diplomat and businessman

The World Bank states that growth in agricultural sectors is twice as effective at reducing poverty than other sectors.

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We are unapologetically at the high-risk, low-return sweet-spot of agricultural finance. We choose to address geographies and sectors where there are real market failures or at least deep market imperfections.

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