Jeffrey Baird - Commodity Convexity (S3E6)
Corey Hoffstein converses with Jeffrey Baird to explore his background and the focus of Merit Point Partners on the commodities market. The discussion highlights Baird's high-level strategy objectives, key players, and dynamics within the market. They delve into the differences between commodity and equity markets, emphasizing fundamental and options market analysis in commodities. Jeffrey discusses measuring mispricing, the roles of contango and backwardation, and the impact of negative oil prices. The episode also covers portfolio construction, risk management, natural gas volatility, and rebalancing strategies. Jeffrey shares insights on opportunities and technological changes shaping the commodities market landscape.
In this episode I speak with Jeffrey Baird, managing partner at Merritt Point Partners.
Merritt Point Partners seeks to build diversified portfolios of convexity exposure through the commodities market. With that in mind, we talk about what makes the commodities market unique, who the players are, and the types of trades that Jeff looks for.
Stepping somewhat outside of the theme for this podcast, Jeff actually employs a heavily fundamentals-driven process. But what fundamental means in the commodity space is different than what it traditional means in the equity space, so Jeff walks us through how this concept applies in markets such as gold and natural gas.
With so many markets and corresponding derivatives to trade, the opportunity set seems overwhelming. And so does the risk of managing a portfolio. Jeff talks us through his framework for managing risk and the seemingly backwards idea that being profitable in a position can actually introduce more risk for portfolios seeking convexity.
I hope you enjoy my conversation with Jeff Baird.
Chapters
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| 36:49 | |
| 42:46 | |
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| 51:01 | |
| 58:15 | |
| 1:00:37 |
Transcript
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