Liquidity, Correlation and Short-termism: Seeking Flatter Ground

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[Editor’s note: This is a guest post from Brian Weinstein, Principal, at Blue Elephant Capital Management. Blue Elephant Capital Management is a bronze sponsor and will be in attendance at LendIt USA 2015 on April 13-15. In this post and attached white paper, he talks about the growing imbalances in liquid markets.]

Before founding Blue Elephant Capital Management, the founders spent their careers on the traditional buy and sell sides of Wall Street. We had a front row seat to the changes in the industry from the point of view of the large banks and asset managers and as investors in the liquid markets. The three of us came to the same conclusion independently — that the investing world had changed after the financial crisis.

Traditional investment opportunities were disappearing as central banks became unlimited liquidity providers, compressing interest rates and forcing the inefficient allocation of capital. It is our belief that the investors have generally ignored these changes, blinded by one of the longest bull runs in the history of the equity markets. While Blue Elephant is currently focused on offering investment product centered around emerging fintech opportunities in peer-to-peer and direct lending, “Liquidity, Correlation and Short-termism: Seeking Flatter Ground” looks at growing imbalances in liquid markets. Our journey from traditional Wall Street to fintech has given us a unique view on the future and how investors must evolve to succeed in today’s markets. Did you know that ‘Elephants Don’t Do Hills’? Read on to see if we can find a simpler path to investment success.

Download the PDF: Liquidity Correlation and Short-termism: Seeking Flatter Ground