John Arnold tweet

so how will you position yourself through the event ?

 

He definitely seems to go for quality over quantity.

 

Through what event?

 

The FOMC meeting results....... flat here, I look at structure tho, not long/short

 

The value of a cash flow "from here to eternity" is extremely sensitive to changes in the discount rate used. Consider a perpetuity - an annuity that receives an infinite amount of periodic payments.

The formula = payment amount / discount rate. Consider the present value of a dollar:

$1 / .15 = $6.67
$1 / .10 = $10
$1 /.05 = $20
$1 /.02 = $50
$1 /.01 = $100
$1 / .0025 = $400
$1 / .001 = $1000

So I would say its not the present short term rate, but rather changes in the long term expectation of the discount rate use to calculate PV that will most impact value. Interest rates are the big, often ignored "fudge factor" in valuation models. Since we are all imperfect beings with little to no ability to predict the future, the markets are volatile as peoples subjective, flawed and conflicting opinions direct their trading.

 

Flat... I don't bet on things where I perceive no edge.

 

perceive, agree what it is all about, edges go away as soon as you get em! Or as long as Brian Hunter was in the NG market