Our approach to risk management involves answering 3 questions on an ongoing basis:
Is the stock doing what it’s supposed to in the portfolio?
Constant narrative monitoring
Key stock breakout/breakdown level identification
Implementation of agreed trading strategies
Is there a risk of permanent loss of capital?
Watching for inflection points
Factor analysis to avoid over-extending
Regret minimax and tail risk analysis
Have we missed anything?
Regular risk reports
Momentum, correlation and liquidity indicators
Multi-factor scenario analysis
Segmented historical valuation
These 3 combine to build our risk management framework: