10 times levered loan product managed by normal people on the street? This sounds extremely safe 😂
@AJ-iu6nw8 ай бұрын
it's better than banks!
@jabberwockytdi89018 ай бұрын
Nah it's more like 4-5 times, the loans are 1st lien and securitized on company assets unlike say corporate bonds or preferred shares. What do you mean "managed by normal people on the street" , you are just buying shares in a closed end investment vehicle , not managing anything , yes it's levered , so are some types of ETF. Not sure about US but most countries you have to certify as a sophisticated investor to buy more complex investments like companies investing in CLO's......
@jwg93388 ай бұрын
Should be far more worried about what this discussion means for banks.
@rrrfamily5658 ай бұрын
@@jwg9338 when bank is in trouble, favilities like BTFD will exist to save everyone. When CLO as a sector will be in trouble in recession, who's gone save this?
@robbie315803 ай бұрын
Banks are levered too
@diylong8 ай бұрын
Good interview and an articulate logical guest not prone to hyperbole. Thanks for picking up this topic and Thomas.
@ashanesubasinha83138 ай бұрын
Good information on CLOs
@leroyybrown8 ай бұрын
Fascinating discussion in the CLO, private credit, BDC space takes me back to the 80’s Junk Bond market where the logic was that the high yield more than covers the losses and you still end up earning a higher return than say Treasuries or Munis. So for many of us this is the holy grail where we can earn SOFR plus 300 or more after fees. I’m sure many people approaching or in retirement would be happy with that.
@voonyeefong7858 ай бұрын
Excellent interview and content!!
@edreeves1218 ай бұрын
Excellent information here 👍
@mattanderson66728 ай бұрын
Thhanks guys!!
@kejianniu2994Ай бұрын
Really enjoyed this interview. Lots of good insight on CLO/BDC world.
@HoustonHamer8 ай бұрын
I got alot of value out of this, thanks for making it happen
@vitthalsrinivasan18718 ай бұрын
Thank you for this - it was very thought-provoking, and Jack Farley was excellent as usual. One question - could you (maybe in an upcoming show) - explain the implications of investing in ECC given that it is a closed-ended fund? I ask this as someone obviously interested in the div yields on ECC. As an international investor, however, I am not sure what I'd be getting into by investing in a closed-ended fund. Thank you.
@tactileslut8 ай бұрын
Tiny chunks of large loans to huge companies. Secured. Variable. Uses locked-in capital, so avoids the vulture capital risk to the borrower but does pass through the capricious central bank actions. I learned something. [Then I got a juvenile giggle near the end when 40s and BBC and 150% full coverage came up. Yay, context.]
@pod11th318 ай бұрын
Isn't this CLO exactly same stuff that already caused lehman brothers crash and following credit crisis?
@BlockworksHQ8 ай бұрын
we address in the interview...
@BlockworksHQ8 ай бұрын
and the short answer is not really. Banks owned CLOs and they suffered impairments in 2008 but in the interview Majewski says that ultimately the equity tranches ended up performing very well as they were able to buy distressed assets on the cheap with par dollars. Whereas CDOs got destroyed. CDOs in question owned subprime mortgages where CLOs own loans to companies
@jamesdlow8 ай бұрын
He sounded like Jeff Goldblum :)
@charleskilpatrick97048 ай бұрын
Appears to be a good way for the small retail investor to get screwed,
@TheRealRaggedyAndy4 ай бұрын
How? it's been a lot of years.
@edwardknowles36146 ай бұрын
48.10 Jack, do you know if there's any data available on his claim that loans transferred out of banks have outperformed?
@Ourpetsheadsarefallingoff8 ай бұрын
I’ll come back in March to see how this aged.
@TheRealRaggedyAndy4 ай бұрын
What are your thoughts now?
@Ourpetsheadsarefallingoff4 ай бұрын
@@TheRealRaggedyAndy Election year.
@TheRealRaggedyAndy4 ай бұрын
@@Ourpetsheadsarefallingoff Give us more. lol
@Ourpetsheadsarefallingoff2 ай бұрын
@@TheRealRaggedyAndystill killing it Tiger?
@Lex411278 ай бұрын
Why is the expense ratio 9% for your ECC fund
@nobobonobo8 ай бұрын
Wtf lol, that's insane
@cats_ARE_better_than_you8 ай бұрын
OXLC (a similar fund) is 13.84%! Why would anyone invest in these things. A DITM covered call on SPY would pay you a much higher overall return.
@wackzingo4 ай бұрын
They borrow money to fund their investments and the interest they pay on those loans is part of the expense so it's really high right now since rates are high.
@edreeves1218 ай бұрын
Saylor ad is a scam.
@BlockworksHQ8 ай бұрын
what Saylor ad?
@coleb94108 ай бұрын
@@BlockworksHQ There's an AI video and voice ad of Saylor and the "CEO of Ripple" (separate ads but same scam) claiming to be giving away Crypto. It's pretty convincing.
@wiktorjespersen9718 ай бұрын
Yea and who ensures them? Please do tell i am ready to short
@42dunbar8 ай бұрын
The two CLO equity tickers I know of are ECC (one the guest works for) and OXLC. Does anybody know of any other CLO equity tickers?
@JamesG11268 ай бұрын
CLO equity is worth $0.
@42dunbar8 ай бұрын
@@JamesG1126 Not what I asked but I bet you really wanted to say that.
@ejbarraza8 ай бұрын
EIC and VTA (Volta Finance).
@42dunbar8 ай бұрын
@@ejbarraza VTA doesn’t appear to be a valid US ADR (ticker). I thought EIC was a debt fund.
@robbie315803 ай бұрын
CCIF
@IssaGedwar3 ай бұрын
What is clos?
@bluecollarbullionballer42692 ай бұрын
I invest in ECC great product.Happy investing/stacking.
@TheRealRaggedyAndy20 күн бұрын
More or less risk than yieldmax YMAG?
@jking13436 ай бұрын
Fuck it, im buying some JAAA puts. This market is as dependent on the fed put and increasing equity prices as CDOs were dependent on an increasing mortgage market
@jjreddick3772 ай бұрын
We reject history
@jjreddick3772 ай бұрын
CDO = CLO ???
@havebadday78508 ай бұрын
How much do you wanna bet that CLOs will be the next 2008 😂
@summaryjudgment8 ай бұрын
Sounds like a bomb waiting to explode...
@Xmj2028 ай бұрын
This channel should show the stats of the asset managers and subscription sellers that come on here. His ecc fund is down 51% since its inception in 2014 Spx is up 142% over that time 😂
@stevecatpatrick80568 ай бұрын
Huh? Are you not looking at total returns? It's averaged 6.25% annualized return since 2014. You know you can't just look at price right?
@jackfarley41578 ай бұрын
@xmj202 look at total returns (including dividends), not just price.
@BlockworksHQ8 ай бұрын
the publicly listed vehicle (ECC) has performed 87% since inception in 2014, including dividends. crushed HYG and BKLN which over same time period have yielded 32% and 34%, respectively.