one of the risk-limiting and value-creation strategies is uncorrelation.orrelation is a wonderful element to add to a return seeking portfolio, because if you are doing something that has a pattern of risk and return, even if it is volatile, even if it is binary, make a lot, lose a lot, but a pattern of returns that does not have anything to do with the course of the stock or bond markets, or anything else in your portfolio, that is an elegant part of the mix. david: do you ever do research on a company and then you call up or somebody calls up the ceo and says this is how you can improve the company and they say that is a good idea. i wish i had thought of that? paul: that's interesting. the way you are asking the question, it is, it presupposes that the response of the company is always either anger or hiding under their desks or some combination. david: and that is wrong you would say? paul: no, sometimes you are knocking on an open door. my style and our style as a team is doing the work as thoroughly as we can to develop a thesis, to assess whether we

this means lots of people want to use it as a diversified asset class so they can get uncorrelated exposurea lot of people want to store their money in something other than their regional currency, soy think there's a lot of different reasons why people might use it, but a lot of it boils down to that digital use case. emily: bitcoin job postings have spiked on linkedin. are you guys hiring? olaf: we are definitely part of that. emily: what is the war for talent like? there must not be that many people who are experts. has grown 10and times. the number of people in the space that are genuine experts is pretty small. now is a good time to be an expert in cryptocurrency technologies. emily: how many people are you hiring? olaf: we are looking to hire about 10 people. basically anyone with a deep understanding of cryptography, distributing network game therapy -- distributing network, game theory. it is not very deep, but the reason is because those folks who have the skills have very lucrative other opportunities. i think the competition for these types of folks will only increase for the nex

if you like gold, put that in portfolio as hedge, risk, disaster insurance, uncorrelated asset you probablyook at bitcoin. liz: maria bartiromo tried to get it out of you. you both have bitcoin. you had it in years past. have you sold any of it? >> we're still super long and bullish on bitcoin. liz: you sold a little bit once or twice as i understand? >> we bought tickets on the virgin galactic space shuttle. liz: come on, you're not going to that? >> we will if it gets there. we're actually astronauts 700, and 701. there are a lost guinea pigs. i think justin bieber will go first. [closing bell rings] you get to witness a record close for the dow and s&p 500. that will do it for the ""claman countdown." join me tomorrow. david: we have fresh records on wall street despite chaos in midtown manhattan. dow climbing to a new record close. s&p 500 ending the day in record territory. hi, everybody, glad you could join us. i'm david asman. melissa: i'm melissa francis. this is "after the bell." more on the big market movers. here is what else we're covering in the very busy hour. terror striking

. -- uncorrelated to the broader market. if you turn to page 6 of the presentation, this displays the model generated by cambridge which i will now scl to discuss in more detail. >> thank you eunice. commissioners, you've seen versions of this pacing model for bothathe private equity program as well as the real assets program. it is based on our tracking of the asset funds that have been performing in that we tracked through years and basically used those patterns of cash flows and nav growth and performance to inform the model. the model has a lot of assumptions. that is something that you should be aware of. in terms of how we use this model and in terms of a tool, it's to help give us directional guidance. the numbers here will most assuredly be wrong in terms of the actual numbers, but directionally, they should be helpful in terms of guiding our pacing. it's also a model that we would suggest recacalibrating and looking at on an annual basis as we get additional information from the program. assuming a 3% pool growth ra

, private markets offer not only an opportunity to diversify the portfolio and add high return uncorrelated assets, but we think the staff and consultant's ability to outperform in private is better than public markets. the next page is simply a graph through time of the growth of your total portfolio and have added your net payouts. you payout more in pensions than receive in contributions. that's why you have a pension fund. it's not unusual. if you take your average annual cashoutflow of 400 million or so and divide it by your assets, that's close to the median for public funds, that says you have the liquidity to invest in private markets that are less liquid and you want to make sure your portfolio will support that and yours clearly does. the next few are risk return charts. you will see common charact characteristics for return patterns. you'll see you're in the mythical upper place, you'll notice your actual volatility is lower than policy volatility. i was just going to cover the three-year period as representative rather than walk you through each one. that's on page 19. if you lo

. >> they said bitcoin is uncorrelated alpha. this is the holy grail of investing. guy who said this was michael sonnenfeld from grayscale. they put out the bitcoin investment trust. a couple things about this. one, he was talking about the fact that it is not just private investors. having pensions and endowments inquire with his fund. this is not even an etf. this is an over-the-counter traded fund that trades at a premium. he added that it trades $400 million a day over the counter. that is absurd. that is how much mcdonald's trades. you get the idea that if you can get this bitcoin into an etf, this thing could traded billion dollars a day. it could be at the top of the most traded equities in a week. convertnd they plan to into an etf when they get approval from the fcc. they had an application in and the fcc asked them to withdraw it. obviously, there are all the risks of putting bitcoin in an etf. we will leave those for another day. i want to get to some of your other takeaways. one of them has to do with competition within the etf and fund management indust

ray's whole theory is 15 uncorrelated bets will reduce your risk by 80%.and your reward ratio goes up five times. so if you diversify, then you look at asymmetrical. how do i get the least amount of risk? and risk a dollar to get three, four, or five. maria: that's a hedging strategy, basically. >> so they don't have fear. they just have respect for the market and then they're focusing on tax phishes. so the net dollars they receive really matter. those are the four items they all seem to have in common. >> so basically what you're doing too because you've got these 31 companies in all different industries. >> that's right. i've modeled them. >> right. okay. so let me ask you this. when they are putting money to work, how important is the overall backdrop for these folks? are they looking at this company's prospects are going to be really strong for that company? or are they just looking at the backdrop of the economy is getting better. the backdrop looks good so a lot of boats will be lifted. >> well, it depends on who you're dealing with. that's what's d

i think it's still a pretty uncorrelated asset >> mike, obviously cryptocurrencies are want disruptive i don't know the answer, i don't mean to be glib. if it's as disruptive as we think it is, what industries are being disrupted? then the question is, are there companies you can short in terms of stocks? >> right now no industries are being disrupted. the biggest industry being disrupted is gold, right bitcoin is one of the few use cases for the blockchain right now, gold being stored value the rest of the coins are promises for the future. there will be a decentralized uber that could disrupt uber, but none of them are ready to play, because the public utility, if it's ethereum, the kind of global decentralized super computer, isn't nearly fast enough to process anything. and so, you know, we're two to three years out from when we're going to see the real disruption happen there's going to be decentralized cloud computing, decentralized file sharing >> are we actually seeing the disruption to the gold market? i know a lot of people like to say it's competition for gold. if you take a

peoplewrote question is think about them as uncorrelated assets. they are not. ashok: that is true.he index is correlated to the main markets, but there are markets which are also driven by their own domestic stories. it depends on what kind of portfolio consumption you want to build. how much diversification you want to build into your portfolio. 2017 has been one of those years were global liquidity has driven assets around the world. ashok shah sticks around, up next, i want to talk about saxony ppi. ♪ is this a phone? or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. guy: 30 minutes into the trading day. pitching a ride, softbank buys into uber. will the investment deliver through the journey in 2018? the greenback he

about this year, did think three fed hikes, you think about it coin may be grabbing some of that uncorrelatedf escape from the normal monetary system. this is like kryptonite for gold, and yet, gold posts new a 13% return is was strategist penciled in. even more interesting, five-year real rates tend to move very inversely to gold, and this is the first year they have actually moved in the same direction since 2008. right now, those lines are the ones you see in murder, flipped. five-year real rate. as the fed has hiked, you have seen that advance, but moving downward, and you have seen gold, especially from rebounding after retracing september lows really picking up. now, it is in a battle between fundamentals and technicals. the technicals say that it is really due for a breakout. this is a great call from thence, but again, we have a dead that is intent on signaling intent on -- a fed signaling more hikes. joe: what is the theme here? luke: the theme here -- where was it this year? it completely vanished. even as we had the announcement of fed alex sheet normalization going down -- what wi

front edge of the crisis in any event, when that happened, all correlations went to one it is uncorrelated it is a belief system. that may scare people. that's really what it -- >> the correlation is determined by those who hold it, though, relative to the other assets people have so much money that they're looking for any opportunity the way that they might not have two and three and four years ago >> i think bubbles happen when there's a scale of importance,ing and i think it's very unfair to look at a market that's still measured in the few tens of billions of dollars and call, it a, a market to begin with, and then, b, that there's a speculative bubble maybe that can happen from time to time in such small scale. i think what's more likely is that there's just an overwhelming number of people who literally don't even know what bitcoin is. >> it took me -- i would say other people if they took the time may come to a very different conclusion than what is the obvious negative nelly conclusion >> i think it would be really elegant if the bubble itself helped create the answer to what cause

or has the lottery ticket already been bought and sold >> i think the advantages -- bitcoin is uncorrelatedstocks and bonds and gold. so for someone who wants to put money into it, it is good diversification. >> do you have any bitcoin >> i'm going to slightly pivot away from bitcoin. i think at lo lot of people are looking at bitcoin as a disruptive technology. you look at targets but i think the reality is there's more disruptive technologies out there besides bitcoin. we're looking at robotics, electric vehicles, i think a lot of people do want some sort of lottery ticket aspect in their exposures right now, but it's a bigger story than just bitcoin the pace of technology and the applications across the economy are huge. >> i assume you agree with that. but on the bitcoin itself or what about any other currencies? >> i think what we all have to -- >> if if you can cayou can call currencies. >> we have to accept the recognition that blockchain and bitcoin and digital businesses will be a real asset class and it's no different than the way the silent generation adopted gold and the boomers