155 karma · joined February 26, 2009
The real reason why shorting the banks won't work is that with less than 20% down the CMHC insures that the lender will get their money back. For thenon-insured mortgages, the banks can also go after other assets since all Canadian mortgages are recourse loans.
By Matt Levine
Here is a simple model for hedge fund fees:
1. There are some people who can reliably generate alpha -- returns in excess of the market return -- but those people are rare.
2. It is somewhat difficult to tell who those people are; in particular, at any given time, there are more people who look like they can generate alpha than who actually can.
3. If you are one of the people who can generate alpha, you should charge a fee for your services that is equal to the alpha that you generate.
4. If you are not one of those people, you should charge a fee equal to the alpha that those people generate, because then investors might think that you're one of them. "
Edit: you don't even need to specify the bounds, just run the forward algorithm for a large enough range (length of input list x 15 will be more than sufficient).