I don't know whether it's the contrarian in me or the part that is just fascinated by the mechanics of finance, but I feel like I would weight more highly commentary about the Vision Fund if it were followed with "And that's why I shorted it, using publicly traded instruments."
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"How would you do that?" The SoftBank Group is a holding company. Its ticker is
$SFTBY. As a holding company, it is essentially just a math formula plus leverage. They publish the formula and the leverage. c.f. the snapshot on page 31 of their 2019 AR https://cdn.group.softbank/en/corp/set/data/irinfo/financials/annual_reports/pdf/2019/sbg_annual_report_2019_001.pdf …2 replies 2 retweets 22 likesShow this thread -
Alibaba ($BABA among other places), SoftBank (9984), Sprint ($S), and Yahoo Japan (4689) are relatively easy to acquire on the open market. ARM is not. The Vision Fund is not. There's some minor residual value to the SoftBank Group.
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To short the equity of the Vision Fund you short SoftBank Group, go long on those four constituents, and then either a) call it a day or b) figure out some way to go synthetically long on ARM.
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"What does 'synthetically long' mean?" We're synthetically shorting the Vision Fund here; creating a position which approximates the returns of a position which is easy to describe ("Short the Vision Fund") but not conveniently describable in a market instrument.
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How would one go synthetically long ARM? I don't know; ask an actual professional in this. My guess, to a first approximation, is go long a semiconductor index and accept that there may be some outperformance of ARM versus semiconductors generally.
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Replying to @patio11
it’s a creative idea but are you saying you’d trust ppl with a conflict of interest more?
0 replies 0 retweets 1 likeThanks. Twitter will use this to make your timeline better. UndoUndo
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