Laurent Bernut on Short selling in the equity markets | Quantra Courses | Trading Courses


If you’re in the long-short business learning to sell short is not a choice. You see there are tons of market gurus will tell you what to buy buy buy buy buy, but people who have mastered the craft of short selling a few far in-between and very high in demand. Good morning, my name is Laurent Bernut. I’ve been in the alternative investment space for 18 years now. A couple of hedge funds and at fidelity my mandate was a dedicated short seller. Every day I wake up within an exposure -100%. I had to find the worst stocks in the worst bear market on record, Japanese equities. So I developed a methodology that would see through the course. People coming from the long side, usually carry the belief that good stocks are few and far between. Now if you transpose that belief from the long side on to the short side, very soon you’ll be hunting for unicorn whales. You’ll be running around the Arctic Circle looking for narwals. This is not how the short side works. The short side obeys its own laws it has its own rules and this is something we’re going to be looking at. The promise of the course, please answer those four questions take time to answer those four questions. Who would you be if you had a stable robust method that tells you when stocks have bottomed out and when they picked up that would be the first one on the slope when everybody is terminally euphoric you’d be the first one out of slope put the goggles on I’m gonna write you down when the street is terminally bearish strong selling everything bo-oh it has bottomed, now time to take a trade. Question number two who would you be if you had more signals than you would ever have capital to deploy day-in day-out number three who would you be if you know exactly how much risk you can afford to take on any single trade. Finally who would you be if you have developed confidence that you have developed a strategy that is robust that you can trade, it won’t work all the time, it has a positive rate, it won’t work all the time it will work over time you would be pulling that trigger. Now about the core structure, people who short stocks that go down in absolute are lagging indicators. First things first we need to restate given time investment universe first as a benchmark and in a single currency we’re going to be comparing apples with apples. There’ll be no valuation is purely price based and very soon you get to see out performers and underperformers long bull short bear, make money on the Delta not rocket science. Let me guess the next question regime definition. How do you know when and how those stoccks are out performing or under performing. How do you reclassify them in a stable robust fashion? So we’ll be exploring several methods classic moving average, breakout, and a third one purely statistical floor and ceiling. By the end of part 1 you’ll you will be able to develop a screening that will tell you day in day out all the signals that you need to take, and you’ll be able to be re-classify. In part two we’ll be moving on to strategy definition, creation, back test, optimization, if any money management. One thing about that, this is the short side the environment does not cooperate. You want to test for robustness. You see people who always optimize for I want a great sharpe, I want great performance. Clearly do not understand robustness. Robustness is something that survived, this is where you build a confidence. So you will be using metrics that specifically will tell you unapologetically how well your toy works. Once we’re done with that will optimize for them and we’ll be moving to money management. Another thing any strategy is composed of two modules signal money management money is made in a money management module. See tourists routinely bet the family go broke,. pros pin up the cows. Now you might think okay this course is nice but at the end of the day I just want to do long only. I just wanna buy stuff. Well, I wanted to gather feedback for the course so I talked to ex-colleagues, and long-short managers, mutual fund, and it’s so appears that a you just described my workflow this is a course written by a professional for professional. If you buy stocks at one point you will want to sell them and you wanna buy stocks as early as possible as soon as they bottom out and you want to sell them at one point when everybody is turning bullish. So final note, warren buffett once said price is what you pay value is what you get. At the moment that this video is recorded I have no idea of how much the course will sell for and frankly it doesn’t really matter, but what I do want and what I wanted from the first day I created of course is to pack it with value. I wanted to create the course that I wish had ten years ago so it has a philosophy, it has a methodology and everything is synthesized into source code. I’ll see you in the course.

Leave a Reply

Your email address will not be published. Required fields are marked *