The hottest Risk management Substack posts right now

And their main takeaways
Category
Top Finance Topics

Lawler: Some Comments About Upcoming GSE MBS Purchases and an Update on Mortgage/MBS Yields and Spreads

CalculatedRisk Newsletter • 33 implied HN points • 13 Jan 26
đź’° Finance Risk management
  1. The announcement that the GSEs would buy $200 billion of MBS sharply tightened MBS/Treasury spreads and pushed current-coupon MBS yields down, even producing a briefly negative option-adjusted spread.
  2. The $200 billion figure likely matches the GSEs' room under the Treasury agreement, so they will probably fund purchases by issuing debt and reallocating Treasury holdings and hedge with longer-dated instruments; because spreads are so tight, debt‑financed MBS could have low or negative risk‑adjusted returns, so investors should plan an exit strategy.
  3. Model estimates of the real neutral fed funds rate imply a nominal neutral range roughly in the low to mid 3% area depending on inflation expectations, so the Fed’s current 3.5%–3.75% target is around or slightly above neutral.

You should get a pre-nuptial agreement

Something to Consider • 79 implied HN points • 18 Jun 24
đź’° Finance Risk management
  1. Getting a pre-nuptial agreement is like buying insurance for your marriage. It protects both partners in case things don't go as planned.
  2. Many people think a prenup shows distrust, but it actually helps avoid messy court battles later. It's about planning for the future.
  3. Not having a prenup means accepting a default contract from the state. It's better to negotiate your own terms when you both feel good about each other.

Market Resilience or Investors in Denial: The Market at Mid-Year 2023

Musings on Markets • 799 implied HN points • 18 Jul 23
đź’° Finance Risk management
  1. The first half of 2023 surprised many investors who expected a tough year, as markets unexpectedly improved despite fears of inflation and recession.
  2. Tech companies, especially big names like Apple and Microsoft, drove the stock market's gains, while some sectors like energy struggled.
  3. Overall, it's important to stay humble in investing because predicting market trends is extremely difficult, and what goes up can also come down.

3 Key Areas for Mitigating Non-Human Identity (NHI) Risks

Resilient Cyber • 39 implied HN points • 24 Jul 24
đź•ą Technology Risk management
  1. Organizations need to keep track of all non-human identities, like service accounts and API keys. This helps in monitoring and managing security across different systems.
  2. When a third party experiences a security breach, it's crucial to quickly identify which non-human identities are affected. Rapid response can help limit potential damage and keep business running smoothly.
  3. Detecting unusual behavior in non-human identities is key to spotting security threats. Using automated tools can help security teams stay on top of potential risks efficiently.

Repost: Armed conflict investor survival guide

Klement on Investing • 6 implied HN points • 19 Feb 26
đź’° Finance Risk management
  1. Don’t panic — most geopolitical shocks don’t hurt equity performance beyond a few weeks, so avoid rushing to sell and consider buying risky assets when they dip.
  2. Use a simple checklist before acting: ask whether infrastructure is damaged, whether inflation will stay high, and whether real interest rates will shift, since each outcome calls for different sector decisions.
  3. Only make major portfolio changes if the effects are persistent (more than a year) on inflation, earnings, or rates; short-term market fear is usually noise and a buying opportunity.
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Software engineering for security: Performance Tradeoffs

Frankly Speaking • 305 implied HN points • 10 Jul 25
đź•ą Technology Risk management
  1. Security and engineering need to talk the same language about performance tradeoffs. If security teams understand the technical decisions engineers make, they can suggest solutions that actually work.
  2. Different security decisions involve risks. For example, faster systems might use more memory, or stricter access controls can slow things down. It's important to weigh these risks carefully.
  3. Having security engineers understand both the risks and the tech helps make processes smoother. They can address problems directly and bridge the gap between security needs and engineering realities.

Dry Powder

QTR’s Fringe Finance • 25 implied HN points • 22 Jan 26
đź’° Finance Risk management
  1. Keep significant dry powder—cash or short-term investments—so you can act quickly on big opportunities or cover emergencies; if possible aim for millions, but at minimum have enough (e.g., $100k+) to avoid forced selling.
  2. US equities look richly priced by several measures (market-cap-to-GDP, Shiller PE, and heavy tech concentration), which raises the odds of low or negative returns in the years ahead.
  3. Investor complacency and low volatility mean now is a time to be defensive and plan to buy optionality during market stress (and consider writing optionality when volatility spikes), using cash to take advantage of forced-selling opportunities.

From Runway to Career Capital: A Framework for Evaluating Startup Jobs

Optima & Outliers • 59 implied HN points • 01 Jul 24
đź’Ľ Business Risk management
  1. When considering a startup job, focus on how it will help your career instead of just picking a 'winner'. Think about your long-term goals and how the role aligns with them.
  2. Do your homework before joining a startup. This means asking about the company's funding, goals, and speaking with people who know the founders to understand their track record.
  3. Look for opportunities to learn and build connections in a startup. These experiences can boost your resume and help you grow your professional network.

What is a Derivative?

Concepts of Finance 🧠 • 279 implied HN points • 11 Feb 24
đź’° Finance Risk management
  1. Derivatives are financial tools that get their value from something else, like stocks or commodities. They don't have value on their own; their worth depends on the performance of the underlying asset.
  2. Derivatives exist to help with risk management, leverage potential gains, and allow speculation on price movements. They can protect investments or amplify losses based on how they're used.
  3. There are different types of derivatives, including futures, options, and swaps. Each has its own way of working, but all can increase financial risk if not used carefully.

7 Things You Should Do Before the Coming Bear Market

Behavioral Value Investor • 89 implied HN points • 17 Nov 25
đź’° Finance Risk management
  1. Write down your investment process so you can stick to it during a market crisis. It helps remind you of your strategies when emotions run high.
  2. Focus on long-term investments instead of short-term gains. This way, you can stay on track and not get swayed by temporary market changes.
  3. Be patient and only invest in solid companies at fair prices. This gives you room to make smart choices instead of panicking in a bear market.

TBM 325: Skeptoptimism – Thinking Slow, Acting Fast

The Beautiful Mess • 952 implied HN points • 01 Dec 24
đź’Ľ Business Risk management
  1. Thinking slowly helps in planning well and reducing risks. It's not sitting idle; it's about being active and experimenting with ideas.
  2. Being a skeptoptimist means balancing a belief in teams with a realistic view of challenges. It's important to express confidence in the team's ability to succeed while addressing risks.
  3. It's key to involve others in 'slow thinking' to ensure they understand and support the process. Sharing your thoughts can help bridge the gap between deep exploration and action.

Shades of 2008?

The Dollar Endgame • 239 implied HN points • 29 Feb 24
đź’° Finance Risk management
  1. The commercial real estate market is facing challenges due to decreased demand for office and retail spaces, leading to increased vacancy rates.
  2. Approximately $1.2 trillion of commercial real estate debt in the US is set to mature within the next two years, posing risks for banks and investors.
  3. There are concerns of a commercial real estate crisis resembling the 2008 financial crisis, with warning signs evident in the US, Europe, and Asia.

Pre-Mortems and Sanity Checks

Abstraction • 29 implied HN points • 14 Jan 26
đź•ą Technology Risk management
  1. Do a pre-mortem: assume the forecast is wrong and list plausible ways it could fail (like cancellations, acquisitions, or shifted definitions) so you don’t miss important paths.
  2. Run a sanity check to make sure the probability fits basic world knowledge and common sense, and correct obvious errors like using the wrong base rate.
  3. Make these checks the final gate: if either one flags a problem, rework the forecast or use a different approach before submitting.

How Liquidity Impacts Market Crashes

DeFi Education • 599 implied HN points • 15 Sep 23
đź’° Finance Risk management
  1. Low liquidity can cause big price drops in markets, meaning even small buy or sell orders can affect prices a lot. This can lead to more volatility and crashes.
  2. Market makers provide important liquidity, but they may pull back during volatile times. This makes it harder for traders to buy or sell quickly without impacting prices.
  3. Knowing when liquidity is low can help investors manage risks better. By watching market conditions, investors can make smarter decisions about when to trade or hold their assets.

In Search of Safe Havens: The Trust Deficit and Risk-free Investments!

Musings on Markets • 599 implied HN points • 15 Aug 23
đź’° Finance Risk management
  1. Risk-free investments aren't always truly safe, especially during financial crises. Events like the 2008 crisis showed that even government bonds can carry risk.
  2. Inflation and real interest rates play a big role in determining risk-free rates, meaning they can change based on economic conditions. A higher expected inflation usually leads to higher risk-free rates.
  3. The trust in governments to honor their debt has declined over time, leading to uncertainty about using government bonds as risk-free investments. This loss of trust makes it essential to reassess what we consider safe investments.

Advanced Prompting Guide for AI Engineering

Engineering Enablement • 13 implied HN points • 04 Feb 26
đź•ą Technology Risk management
  1. Structured prompting is required for complex, high‑risk engineering work; techniques like graph‑based prompts help reveal hidden dependencies, prioritize rules, and manage changing state.
  2. Use controlled validation loops and dual‑implementation strategies to improve governance and reduce risk, and apply diff‑only refactoring to make large code changes less invasive and more token‑efficient.
  3. The guide is vendor‑agnostic and practical, with Do/Don't scenarios and full prompt/code examples, and it’s useful to engineers and non‑engineers working with coding assistants, agents, or spec‑driven workflows.

Open Source Security Landscape 2024

Resilient Cyber • 139 implied HN points • 21 Apr 24
đź•ą Technology Risk management
  1. Most codebases now use a lot of open source software, which can come with serious security risks. This means many systems are more vulnerable because they contain known vulnerabilities that might not be addressed.
  2. The number of components in applications is increasing, leading to software bloat. This makes it tough for teams to manage security and keep everything up to date, which can create more risks for users.
  3. Licensing issues are common in open source software, with many projects having conflicts or unclear licenses. This can lead to legal problems for businesses that use these components in their software.

My Personal Investing Journey

Jay's Data Stream • 5 implied HN points • 19 Feb 26
đź’° Finance Risk management
  1. Buy-and-hold only reliably works for broad index funds, because they spread risk across many companies; individual stocks or crypto can go to zero, so you can’t treat every asset the same.
  2. True diversification means different exposures, not just different labels — owning the S&P plus a bunch of U.S. tech bets is still concentrated; an automated, multi-asset portfolio with regular rebalancing helps you survive big drawdowns.
  3. Use clear rules and position sizing: keep a small YOLO bucket, only hold individual bets you would buy at today’s price, and pay attention to fees and fine print because small differences compound over time.

How Banks Fail

Confronting the Future • 511 implied HN points • 05 Mar 23
đź’° Finance Risk management
  1. Banks can fail due to bad assets or a run on liabilities, which can often happen together.
  2. Be cautious with asset management, especially in rising interest rate environments and when extending in duration.
  3. Hot deposits can create volatility if depositors suddenly withdraw, impacting a bank's ability to meet obligations.

What does a Commodity Trader do?

Concepts of Finance 🧠 • 199 implied HN points • 07 Mar 24
đź’° Finance Risk management
  1. Commodity traders buy and sell things like oil, gold, and wheat. They try to predict price changes based on global events to make profits.
  2. Their work impacts everyday prices for many products we use, helping producers manage risks and securing stable prices for the future.
  3. Traders pay attention to weather, politics, and market feelings to make informed decisions, using tools like futures contracts and diversification to manage risks.

Synthetix

DeFi Education • 379 implied HN points • 01 Dec 23
đź”® Crypto Risk management
  1. The content is now more focused on finding new investment opportunities and taking on more risks.
  2. They are producing lots of content quickly, typically three posts a week.
  3. The fast-paced world of crypto means things can change quickly, even between their posts.

Good (Bad) Banks, Good (Bad) Investments: An Investing Perspective

Musings on Markets • 819 implied HN points • 07 May 23
đź’° Finance Risk management
  1. Good banks tend to have stickier deposits, which help them maintain stability. Buying a good bank at a high price might actually lead to losses compared to buying a bad one at a low price.
  2. Valuing banks is tricky because their cash flows and risks are different from other businesses. Instead of using traditional methods, one should often use a dividend discount model or a free cash flow to equity model.
  3. The price of a bank's stock can differ significantly from its actual value. Understanding both the intrinsic value and market price is key to making smart investment decisions.

Tether And When Denial Becomes A Dialect

QTR’s Fringe Finance • 63 implied HN points • 28 Nov 25
đź”® Crypto Risk management
  1. Companies should always provide a full audit if requested. If they refuse, it's likely because they have something to hide.
  2. Tether's reserves are not as stable as they claim, with high-risk assets like Bitcoin included. If those assets drop in value, Tether may struggle to maintain its worth.
  3. It's important to be skeptical and demand transparency in financial matters. Trusting companies without verification can lead to big losses.

Third-party risk management needs to change

Frankly Speaking • 50 implied HN points • 03 Dec 25
đź’Ľ Business Risk management
  1. The current way companies choose vendors is too slow and complicated for today's fast-moving tech world. It takes too long to get through all the approvals and checks.
  2. Security teams often struggle to fully understand the products they assess, which makes the process messy and can lead to risks being overlooked. They should focus more on ongoing monitoring rather than just initial assessments.
  3. Compliance checks for vendors are often just a tick-box exercise, making it feel like there’s security without real effectiveness. Companies need to adapt and change how they approach procurement to reduce risks.

Crops grow where cash flows

Topsoil • 471 implied HN points • 13 Mar 23
đź’Ľ Business Risk management
  1. Farms aim to be profitable by managing revenue and costs.
  2. Cash flow is crucial for farms due to seasonal and lumpy nature of income.
  3. Farmers have wealth tied in assets like land and equipment but may face cash flow challenges.

Everything is Risk (+Radiant Capital)

DeFi Education • 759 implied HN points • 27 May 23
đź’Ľ Business Risk management
  1. Risk-taking is essential for growth and success. If you don’t take risks, you might miss out on big opportunities.
  2. Real-life experiences with risk help you learn and get better at decision-making. It’s important to face challenges to achieve greatness.
  3. In sports and investing, the biggest rewards come from taking calculated risks. Embracing these chances can lead to significant achievements.

All Weather Portfolio

Market Sentiment • 432 implied HN points • 16 Apr 23
đź’° Finance Risk management
  1. Sticking to a long-term investment strategy is key for great returns.
  2. Stock-heavy portfolios can carry more risk than expected, especially during market downturns.
  3. Diversifying investments to balance across economic conditions can lead to stable returns.

A Mean Reversion Strategy with 2.11 Sharpe

Quant Trading Rules • 79 implied HN points • 20 May 24
đź’° Finance Risk management
  1. A mean reversion strategy was tested with rules involving computing rolling means and using the IBS indicator, focusing on bouncing back from market drops.
  2. Implementing a market regime filter significantly reduced drawdowns and exposure time, improving the Sharpe ratio and reducing drawdown durations.
  3. By incorporating a long & short strategy, trading QQQ in bull markets and PSQ in bear markets, a good balance of Sharpe ratio, annual returns, and maximum drawdown was achieved.

How Not To Be A Bitcoin Asshole

QTR’s Fringe Finance • 52 implied HN points • 30 Nov 25
đź”® Crypto Risk management
  1. You can invest in Bitcoin and still be careful about its risks. It's important to have a realistic view and not get too caught up in the hype.
  2. While Bitcoin is an interesting idea with potential, it doesn't have the same proven value as gold. Gold has been around for thousands of years, while Bitcoin is still relatively new and uncertain.
  3. Being critical and skeptical about Bitcoin doesn't mean you hate it. It’s okay to recognize both the potential and the dangers that come with investing in it.

What to Buy: Seasoned Coins vs. Fresh Launches

DeFi Education • 799 implied HN points • 16 Apr 23
đź”® Crypto Risk management
  1. There are many coins available, but creating a successful one is tough. It needs to be used and well-liked for it to last.
  2. Older coins often struggle to survive, but some can still thrive years later. You have time to research and pick the right ones now.
  3. Investing in new coins can be risky. You need to be ready to hold on for a while, even if the value drops before it might rise again.

All In

Market Sentiment • 412 implied HN points • 18 Jun 23
đź’° Finance Risk management
  1. Survival in investing means being prepared for bad days.
  2. Diversifying investments can help minimize future regret and balance risk.
  3. Conservative investing can be more important than chasing high returns.

Digging into the OWASP AI Exchange

Resilient Cyber • 239 implied HN points • 10 Jan 24
đź•ą Technology Risk management
  1. OWASP AI Exchange is a valuable resource for understanding AI security risks and sharing knowledge. It helps organizations learn how to protect themselves against threats in AI systems.
  2. The AI Exchange provides guidelines for managing AI security throughout its development and use. Companies can adopt controls to mitigate risks associated with data leaks, manipulation, and insecure outputs.
  3. Practitioners are advised to incorporate standard security practices from app security into AI systems. Regular monitoring and using tools like threat modeling are essential for maintaining safety in AI usage.

Buffer Funds

Market Sentiment • 393 implied HN points • 30 Jul 23
đź’° Finance Risk management
  1. With derivatives, you can create a portfolio that never loses money and still invest in stocks.
  2. Buffer funds offer a way to protect your capital from losses while capping your potential gains.
  3. These strategies were traditionally expensive and complex, but are now more accessible through ETFs.

On Insurance

Something to Consider • 59 implied HN points • 03 Jun 24
đź’° Finance Risk management
  1. Moral hazard happens when people take more risks because they have insurance, like thinking they can be careless if they have fire insurance. This means insurance can't cover every behavior to keep premiums fair.
  2. A better way to provide insurance is to focus on events that you can't control, like natural disasters, rather than paying out for specific losses. This keeps people motivated to protect their property since their actions impact their safety.
  3. Government assistance can be more effective if it's tied to things outside a person's control, like race or family status, rather than just income. This way, people are still encouraged to work hard because their benefits don’t change based on their work efforts.

[2025–2026] Week 9: Warren Buffett: Partnership Years

Behavioral Value Investor • 44 implied HN points • 05 Dec 25
đź’° Finance Risk management
  1. Warren Buffett focused on three investment types during his partnership days, reflecting his diverse strategy. Each investment type had unique traits and risks, which influenced his approach.
  2. Buffett's strategy evolved from his early days to later years, showcasing adaptability in his methods and insights gained over time. He learned to balance risk and opportunity while managing his portfolio.
  3. The seminar encourages participants to engage with each other, highlighting the importance of community learning and sharing different perspectives on investing.

How AI Helps Me Combat Confirmation Bias (And Research Faster)

Behavioral Value Investor • 66 implied HN points • 07 Nov 25
đź’° Finance Risk management
  1. AI can help generate lots of investment ideas quickly, but it's up to you to use your judgment to pick the good ones. This saves time and allows deeper research on the promising candidates.
  2. By using AI to analyze companies and industries, you can spot trends and risks faster. This makes your initial research more efficient, letting you focus on the most worthwhile opportunities.
  3. AI also helps you think critically by providing a 'Devil’s Advocate' perspective. This way, you can challenge your own beliefs and reduce biases before making investment decisions.