The Adventures of Cobb Douglas

CFA Level III
#41

Some of above seems like true application of the CFA knowledge and skills learnt. Seeing the expert inputs above CFAI should amend the introduction to the CFA programme to

“ The CFA Program is a globally recognized, graduate level curriculum that provides a strong foundation of real-world “attractiveness of woman”. analysis and “ride the wave” management skills along with the practical knowledge you need in today’s “extend your duration” industry. It also emphasizes the highest “witty” and “staying power” standards.”

And should forthwith award the Charter to some of the above posters to recognise their deep knowledge and expertise!

#42

(I like this new arc very much! Let me give it a go, hopefully I don’t ruin the storyline… ^.^)

Monte Carlo and Cobb Douglas started innocently with some plain vanilla swaps, but soon turned into full replications followed by long straddles. Although Cobb Douglas enjoys very much engaging fiscal policies and taking the receiver swaption position with Monte Carlo (with sufficient liquidity), he avoids public exchange funds of any kind because of his belief perseverance and self-protecting bias.

After a short duration, Cobb Douglas met a H model through a brokered market, he reverted to his mean and regained interests in puts and computing VARs. Monte Carlo found out and went completely mental accounting and seperate their asset allocations immediately. Realizing Cobb Douglas was only seeking convertible arbitrage all along, Monte Carlo now moved onto Sortino avoiding significant downgrade risk.

#43

1rech and Nano - I’m very proud of you two. You have embraced both the letter and the spirit of this thread, forum and the CFA Institue.

1rech, my favorite of yours: “Eventually, both would have massive implementation shortfalls and fall asleep, chainlinked and satisficed.”

Nana my favorite of yours: “After a short duration, Cobb Douglas met a H model through a brokered market, he reverted to his mean and regained interests in puts”

Well played!

#44

Cobb’s thinly traded H model gained Celebrity when she found out about Cobb & Monte’s homogeneous past and timely executed Monte above the Head and Shoulder. She took a candlestick and watched him Fried,man. The J-factor was skewed by her BOD and liberalized her immediately after contagion. In jail, she became over-weighted and her hips had a wide bid ask spread. Technically, Cobb didn’t mind as he always had a slight tilt toward deteriorating fundamentals. Back at home bias, the h model told Cobb of sell-mate Yardeni, the Russian INTERPOLation agent she was retained with for a minimum of 7 years. Yardeni had overvalued her stock in the agency and others detected her dominance and illusion of control. Cobb didn’t care about Yardeni’s unique circumstance or her simple logical participation in the agency. He was concerned with getting the hot commodity value weighted h-model straddling his emerging market. He paid a boy some Cash-to-Carry her to the bed but the event risk was too high and the boy worried about his survivorship bias. Cobb’s time horizon was short and knew it was up to him to use extensive leverage to hoist this out-of-the money global macro into the sack. Attempts were in vain and the lease rate of having continuous storage costs of his goods was too high so Cobb started the capital allocation process and actively accumulated a large concentrated position of his stock in her roll yield - right down to his emergency reserve.

Respectfully, I submit for your Analyst Forum / Pulitzer Prize consideration

#45

I think you have just created a new literary genre. How should we literary “analysts” call it? Chartered Financial Erotic Literature…

#46

(Clark, that was a strong submission, but IMHO NANA’s takes the cake. And mine was just a plain vanilla swap compared to her long straddle smiley)

Cobb Douglas felt irrationally exuberant. He had Monte Carlo’s international standards, and he also had H model’s GAAP. Better yet, they were both reconciled to each other. No wonder he was in great animal spirits. He took his convertible out of his arbitrage, and was on his way to acquire his friends Singer and Tehraar when he heard a long call from a distressed security. He got down to analyze her. She looked like a window dressing - with nothing on but an e-Mini that barely covered her naked put. Her price points stood proudly high and uncovered. He saw that she was stuck in a value trap and unable to break out of its resistance. Now Cobb had a prisoner’s dilemma. Should he follow the code of ethics and be her knight in shining armor, or should he do a hostile takeover right there in the open market? He was undecided on exercising either option as he unbound her curves.

To be continued…

#47

this just keeps getting better and better…

#48

I am especially proud of “He took his convertible out of his arbitrage” smiley

#49

Poor girl. The guy she met said he was buy and hold but he was really just a constant mix looking for a concacvity. In a bear market no less so the underperformance was brutal. To makes things worse, her doctor just told her the t-test confirms she has Type II error. This was definitely not in her IPS so now she is seeking alternatives but not sure anyone will enter into a swap with this fallen angel without some proportional portfolio insurance.

#50

That Type II error reminds me of Thing I and Thing II…

(Dedicated to Dr Seuss’s Cat in the Hat / Cat in the Hat Comes Back)

The Fed did not loosen

January effect was in play

so we bet with house money

all that cold cold wet day.

The market was volatile

Up and down like a yo-yo

all that volatility

all that volatility had to go.

Somebody, somebody,

has to trade it, you see,

then the manager picked two somebodies

Cobb Douglas and me.

There we were

trading a VIX futures contract

when who should show up

but Monte Carlo in a hat.

Oh oh, Cobb said.

"Don’t you trade with that cat.

That Monte is a bad one,

he made the yield curve flat."

“Tighten money supply?”

Monte laughed. “Oh no no.”

"I was just modeling

my discounted cash flow."

He fixed his income,

then he went long TIPS,

but Cobb was sure he had

violated GIPS.

Monte said " I did

what I had to do.

But I made two tiny errors,

Type I and Type II."

Cobb caught the errors

in his Graham net-net

and we made Monte Carlo

buy all VIX futures as a bet.

Monte went bust just as

the manager came back

and us traders did not know if

we should cut him any slack.

“How did you trade so quickly?” asked the manager.

“Nice work, you two”.

What would YOU tell him

if your manager asked you?

#51

“In jail, she became over-weighted and her hips had a wide bid ask spread.  Technically, Cobb didn’t mind as he always had a slight tilt toward deteriorating fundamentals.” HaHaha this one definitely made me laugh. Best excerpt of the ones thatwere recently posted.

#52

I like a woman trader with a nice thing Twap.

She makes me want to WACC it

#53

Thanks 1recho for your compliment!

#54

Thank you clarkth4! :slight_smile:

#55

PLEASE BRING COBB DOUGLAS BACK TO LIFE!!!

I’m counting on you new L3 candidates… :slight_smile:

#56

y

#57

[quote=“mygos”]

Some of above seems like true application of the CFA knowledge and skills learnt. Seeing the expert inputs above CFAI should amend the introduction to the CFA programme to

“ The CFA Program is a globally recognized, graduate level curriculum that provides a strong foundation of real-world “attractiveness of woman”. analysis and “ride the wave” management skills along with the practical knowledge you need in today’s “extend your duration” industry. It also emphasizes the highest “witty” and “staying power” standards.”

And should forthwith award the Charter to some of the above posters to recognise their deep knowledge and expertise!

@mygos

I will be wary of dragging the “CFA” name into this hilarious but obscene post. If you are a CFA candidate you should know better about the grave dangers of uniting the institute’s name to something of this nature. This forum can be accessed by potential candidates as well so be careful!

#58

Cobb Douglas and Grinold Kroner were in the club discussing market quality. Cobb Douglas stated that if a counterparty could provide assurity of completion, he would provide liquidity.

He was unsure if either party could provide transparency…

#59

Thanks 3-on1st…I just took a practice test and got a question on this right, because I remembered you correcting the poster. Good stuff.

#60

L2 candidate tried stealling my material :slight_smile:

http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91334101