The risk that matters most is the risk of permanent loss [of capital]. – Howard Marks
The many varieties of risk
“Risk” is a funny word. In the context of investing, it is used constantly; however, if you ask somebody to define what he or she really means, you are likely to be met with plenty of hesitation. “Risk” is one of those words we all use every day without giving too much thought to what it actually means.
When I think about risk, though, one definition towers over and above all the other ones. To me, when investing, “risk” is mostly, but not exclusively, about the risk of permanently losing your capital. Whichever of those silos above you think offer the best description of risk, in almost all cases, the risk of a permanent loss of capital hovers above it. In the following, I will talk about how the risk of that can be minimised.
How to measure risk
When professional investors manage risk, two measures of risk tend to dominate:
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(equity) beta; and
value at risk (VaR).
Allow me to spend a minute on how to define the two terms. Equity beta is a measure of the sensitivity of a stock (or portfolio) relative to movements in the equity market. If you assume the equity market is represented by S&P 500, an equity beta of 1 suggests the stock in question will move in line with S&P 500, whereas an equity beta suggests the stock in question is more (less) volatile than S&P 500.
The beta can be measured against other benchmarks as well – doesn’t have to be against the equity market. If, for example, you wish to measure the sensitivity to commodity prices, you calculate the commodity beta, etc, etc.
VaR is a bit more complicated. It is a measure of the maximum expected loss over a given time horizon and at a pre-defined confidence level (typically 97.5% or 99%) assuming normal market conditions . The latter is a very important assumption.
The primary problem with both of those measures is that they are akin to rear-mirror viewing. One cannot be sure that history will repeat itself, and both measures depend, to a significant degree, on historical patterns being repeated. That said, there isn’t much you can do to improve the analytical outcome. One option is to introduce a Month Carlo model when calculating the VaR, which will eliminate the dependence on history, but that won’t protect you against every possible outcome.
Every day, we calculate the equity beta on every single holding in our fund, and we calculate the portfolio VaR. In terms of the latter, we work with a self-imposed limit of 3%; i.e. we aim to keep the portfolio’s 97.5% 1-day VaR below 3%.
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How you should manage risk
Most private investors don’t have the tools, nor the time, to spend hours every day on risk management, so a more pragmatic approach is warranted. I suggest the following approach: identify a handful or two of indicators which, historically, have led to the party coming to an abrupt end. To me, the ten most important ‘end of secular bull market’ indicators are listed in Exhibit 1 below.
Exhibit 1: End of secular bull market indicators
Sources: The Felder Report, Absolute Return Partners LLP
I work with these indicators in a rather simple way. Essentially, the more boxes I can tick, the more likely, I believe, it is for the secular bull market to come to an end rather soon. Now to the serious part: All ten boxes are currently ticked off! That tells me that the end might not be that far away. Three caveats:
1. Secular bull markets rarely end ‘just’ because equities are expensive. Some sort of catalyst shall be required.
2. When going through this exercise, you may end up with a different set of indicators than me but that matters less. Choose those that you are comfortable with and that have worked for you over the years.
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3. Timing is the most difficult part of an exercise like this, and it is easy to be (too) early – in fact so early that it poses real career risk to professional investors, and that is probably why many prefer to stay on the train until it is too late to get off without an injury or two.
Re the last point, I learnt in 1990 when Tokyo Stock Exchange crashed, and again in 2000 when the same happened in New York, that most investors prefer to participate in the party to the very end, knowing very well that they may end up with plenty of (rotten) egg on their face.
Nothing has convinced me that investors have changed even the slightest. Momentum continues to drive markets forward, whatever asset class you look at, and the crowd mentality is stronger than ever. That is sort of a “if my neighbour got rich on gold, why shouldn’t I do the same?” mentality, which is very dangerous.
Allow me to finish this month’s Absolute Return Letter by sharing a chart from Goldman Sachs (GS) which shows how abundant speculative fever currently is (#5 on the list above). The chart was produced last October, i.e. it only provides 2025 data through September, but there is no reason to believe that anything happened in 4Q25 which would change the picture.
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Exhibit 2: Price return on various US equities (Note: 2025 to 30 September)
Source: Goldman Sachs Global Investment Research
Now to my point: If Nasdaq stocks with no revenues delivered the highest return to US investors in Q1-Q3 last year, and if unprofitable Nasdaq stocks came joint second, isn’t that about as strong a signal you can get that speculative fever is ample?
I could indeed provide plenty of other charts to support the issues I listed in Exhibit 1 but will only do one more – leverage is high (#8). Exhibit 3 below is testament to the fact that it is not only retail investors who get carried away from time to time. As you can see, in recent years when equity returns have been particularly strong, what have hedge funds done? Piling on ever more leverage, is the answer. This can only end in tears.
Line chart showing Hedge fund borrowings by source from 2013 to 2025.
Source: Apollo Global Management
Final few words
In the fund we manage, we are, at least to a degree, caught in the same dilemma. It is easy to see (many) equities are overvalued, but by going too conservative you risk missing out on returns. Consequently, we remain nearly fully invested but with a defensive twist. We hold large positions in low beta equities and in certain commodities which tend to do much better than equities when stocks decline. Most importantly, we hold plenty of gold.
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Rather surprisingly, our ‘defensive’ approach still led to extraordinary returns in 2025. We finished the year delivering +29.24% net to USD investors. That is obviously very pleasing; however, at the same time, I find it uncharacteristically worrying. If you deliver almost 30% to your investors, do you in fact take more risk than you think you do? Finding the answer to that question has kept us very busy in January.
This material has been prepared by Absolute Return Partners LLP (ARP). ARP is authorised and regulated by the Financial Conduct Authority in the United Kingdom. It is provided for information purposes, is intended for your use only and does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. The information provided is not intended to provide a sufficient basis on which to make an investment decision. Information and opinions presented in this material have been obtained or derived from sources believed by ARP to be reliable, but ARP makes no representation as to their accuracy or completeness. ARP accepts no liability for any loss arising from the use of this material. The results referred to in this document are not a guide to the future performance of ARP. The value of investments can go down as well as up and the implementation of the approach described does not guarantee positive performance. Any reference to potential asset allocation and potential returns do not represent and should not be interpreted as projections.
Absolute Return Partners
Absolute Return Partners LLP is a London based thematic investment manager committed to megatrend investing. We aim to benefit from long term thematic trends including Climate Change, the Era of Disruption, Last Stages of the Debt Supercycle among others. You can find more information about the megatrend we invest in accordance with on our website.
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We are authorised and regulated by the Financial Conduct Authority in the UK.
U.S. cattle herds may be smaller for the foreseeable future as ranchers show few signs of building up the nation’s livestock supply, said executives from Tyson Foods, America’s largest meat supplier.
Officials at the Arkansas-based company said the shortage of cattle on U.S. pastures is expected to last through at least 2026 and 2027. Last week the U.S. Agriculture Department said the cattle herd was at its lowest level since 1951. The tighter supply is driving up cattle costs and squeezing meatpackers like Tyson.
“The data that we see indicates an ultimately smaller herd,” Tyson Chief Operating Officer Devin Cole said on a call with analysts. “Cattle are going to remain extremely tight.”
Markets staged a strong rebound on Tuesday, driven by a landmark trade agreement between India and the United States. Analysts say the sharp surge in the Nifty suggests a potential shift in the near-term trend after the Budget-related sell-off, as the index has reclaimed its key moving averages.
Shares of Trent, NHPC, Tube Investments, Hexaware Technologies and Apollo Tyres will be in focus as the companies will announce their third quarter results today.
BPCL
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State-run refiner Bharat Petroleum (BPCL) has raised its capital expenditure plan for the coming fiscal year by 35% to Rs 25,000 crore, driven by an aggressive push into petrochemicals, even as peers Indian Oil and ONGC have trimmed their investment budgets. Bajaj Finance
Bajaj Finance on Tuesday reported a 6% year-on-year (YoY) decline in its consolidated net profit for the third quarter at Rs 4,066 crore. The drop in bottomline was mainly due to an accelerated ECL provision and one-time charge of new labour codes. Adjusted for the above and tax, the profit grew 23% to Rs 5,317 crore.Pidilite Industries
Pidilite Industries on Tuesday reported 12% rise in consolidated net profit at Rs 624 crore for the third quarter ended December 2025. The company had posted a profit of Rs 557 crore in the third quarter last fiscal, Pidilite Industries, manufacturer of adhesives, sealants and construction chemicals.
AB Capital
Aditya Birla Capital reported a 33% jump in its December quarter consolidated net profit at Rs 945 crore compared to Rs 708 crore reported in the year ago period. The profit after tax (PAT) is attributable to the owners of the company.
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Mankind Pharma
Indian drugmaker Mankind Pharma reported a higher third-quarter profit on Tuesday, driven by strong domestic demand for its drugs used for treating long-term illnesses. The company, which makes Gas-O-Fast antacid tablet and Manforce condoms, said its consolidated net profit climbed to Rs 409 crore ($45.3 million) for the quarter ended December 31, from Rs 380 crore.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
The rupee surged the most in seven years and India’s equity gauges logged their largest gains in nine months after Washington agreed, as part of a long-awaited trade deal, to reduce tariffs hurting shipments and foreign inflows.
News of the successful US-India agreement caused both the Nifty and the Sensex to surge as much as 5% intraday. The central bank, meanwhile, reportedly bought dollars, preventing the rupee from appreciating too much, too soon. The Nifty 50 advanced 639.15 points, or 2.5%, to 25,727.5 at close of trading, while the Sensex climbed 2,072.67 points, or 2.5%, to end at 83,739.1.
ET Bureau
“The tariff-related uncertainty was one of the many reasons for India’s rising trade gap, equity market underperformance, $19 billion of selling by foreign investors in 2025, and a weakening currency,” said Ashish Gupta, chief investment officer, Axis Mutual Fund. “The new framework removes a key source of uncertainty around the growth outlook, supporting external demand, improving business sentiment, and potentially catalysing a pickup in private capex.”
The rupee, which had the dubious distinction of being the worst performer in Asia in 2025, rallied 125 paise on Tuesday to 90.26 a dollar from 91.51. Its logical advance beyond 90, dealers said, was halted only by the central bank’s decision to buy the US currency, which it had relentlessly sold from its stockpile earlier to prevent the local unit’s rout.
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Trade Anxiety Abates “Capital flows could see an improvement as the deal lifts overall sentiment,” said Shailendra Jhingan, head of treasury, ICICI Bank. “Foreign capital, which had stayed on the sidelines over the past few months, may begin to return, leading to inflows into both equity and debt markets.” He expects the rupee, the value of which vis-à-vis the dollar has a disproportionate say on overseas capital flows into Mumbai-listed growth assets, to trade between 90 and 89.50 per dollar by end of March. India’s volatility index VIX—the stock market’s fear gauge— fell 7% to 12.90, reflecting a thaw in trader anxiety. Analysts said the index could challenge its all-time high of 26,373.2 in the near term.
Altius, Fortius “The Nifty has traded in a broad range of nearly 1,500 points for most part of May to now, and after the announcement of the trade deal, we may see this range shifting upward, with a potential for Nifty to move toward 26,650 levels on the back of improved sentiment in the coming weeks,” said Rohit Srivastava, founder, indiacharts.com.
Foreign portfolio investors were net buyers of ₹5,236 crore on Tuesday, while domestic institutions bought shares worth ₹1,014 crore. So far this year, overseas investors have net sold to the tune of nearly ₹28,180 crore.
BNP Paribas Securities said the trade deal supports its positive outlook on Indian equities this year. It expects a return of foreign fund flows to benefit IT and financial stocks.
Across Asia, markets surged Tuesday, reversing some of the recent losses. Japan gained 3.9%, China 1.3%, Hong Kong 0.2%, South Korea 6.8% and Taiwan 1.8%. In Europe, the Stoxx 600 was up 0.1% at the time of going to press.
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At home, the broader market too ended strong, with the Nifty Mid-cap 150 and Nifty Smallcap 250 surging more than 2.9% each. Of the total 4,422 stocks traded on the BSE, 3,279 advanced and 1,015 declined.
Harendra Kumar, managing director of Elara Securities, said the deal strengthens India’s long-term macro setup. “With the tariff overhang now behind us, India’s longterm growth outlook has strengthened, with the GDP potentially expanding at 8-8.5% from FY28-FY29 onwards,” Kumar said. “This should support higher valuation multiples for Indian markets and, alongside a weaker rupee, improve India’s appeal to FIIs.”
Kumar expects the Nifty to hit 30,000 by March 2027.
Gupta said the tone for equities has turned more favourable after a weak start to 2026. The backdrop, he said, is improving thanks to better valuations, stronger earnings expectations, firmer economic momentum following the budget and steady domestic flows. “With tariff uncertainties now resolved, the near-term risk-reward has shifted in favour of equities, and these factors together are expected to meaningfully strengthen India’s FY27 growth outlook,” he said.
Professional Capital Management CEO Anthony Pompliano explains why he is ‘betting’ on Elon Musk after the SpaceX founder merges SpaceX with his A.I. start-up and more on ‘The Claman Countdown.’
French police raided X offices in Paris on Tuesday as part of an investigation into the company’s use of algorithms and its artificial intelligence chatbot, Grok.
French prosecutors had opened the probe in 2025 following a complaint by a lawmaker alleging that biased algorithms on the platform were likely to have distorted the operation of an automated data processing system.
Authorities are now examining suspected algorithm abuse and fraudulent data extraction by X or the platform’s executives, prosecutors said.
Britain’s privacy watchdog, the Information Commissioner’s Office, also said on Tuesday in a statement it had launched a formal investigation into Grok over the processing of personal data and reports that the chatbot had been used to generate nonconsensual sexual imagery, including of children.
X went on to criticize the French authorities’ actions, accusing prosecutors of bypassing international legal mechanisms.
The investigation has also broadened to include Grok, X’s AI chatbot. (Jonathan Raa/NurPhoto via Getty Images)
The company said in a statement on X that the Paris Public Prosecutor’s office was “plainly attempting to exert pressure on X’s senior management in the United States by targeting our French entity and employees, who are not the focus of this investigation.”
Musk called the raid a “political attack.” (Gonzalo Fuentes/File Photo/Reuters / Reuters Photos)
In a separate statement, Europol said it was supporting the French investigation with the assistance of the French Gendarmerie’s cybercrime unit.
“The investigation concerns a range of suspected criminal offences linked to the functioning and use of the platform, including the dissemination of illegal content and other forms of online criminal activity. Europol stands ready to continue supporting the French authorities as the investigation progresses,” it said.
Take-Two Interactive Software, Inc. (TTWO) Q3 2026 Earnings Call February 3, 2026 4:30 PM EST
Company Participants
Nicole Shevins – Senior Vice President of Investor Relations & Corporate Communications Strauss Zelnick – Executive Chairman & CEO Karl Slatoff – President Lainie Goldstein – Chief Financial Officer
Conference Call Participants
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Douglas Creutz – TD Cowen, Research Division Eric Handler – ROTH Capital Partners, LLC, Research Division Colin Sebastian – Robert W. Baird & Co. Incorporated, Research Division Christopher Schoell – UBS Investment Bank, Research Division Andrew Marok – Raymond James & Associates, Inc., Research Division Edward Alter – Jefferies LLC, Research Division Jason Bazinet – Citigroup Inc., Research Division Alec Brondolo – Wells Fargo Securities, LLC, Research Division Michael Hickey – The Benchmark Company, LLC, Research Division Andrew Crum – B. Riley Securities, Inc., Research Division Brian Pitz – BMO Capital Markets Equity Research Martin Yang – Oppenheimer & Co. Inc., Research Division Omar Dessouky – BofA Securities, Research Division
Presentation
Operator
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Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 Fiscal Year 2026 Quarterly Earnings Results Call. [Operator Instructions]
I would now like to turn the call over to Nicole Shevins, Senior Vice President, Investor Relations and Corporate Communications. Nicole, please go ahead.
Nicole Shevins Senior Vice President of Investor Relations & Corporate Communications
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Good afternoon. Thank you for joining our conference call to discuss our results for the third quarter of fiscal year 2026 ended December 31, 2025.
Today’s call will be led by Strauss Zelnick, Take-Two’s Chairman and Chief Executive Officer; Karl Slatoff, our President; and Lainie Goldstein, our Chief Financial Officer. We will be available to answer your questions during the Q&A session following our prepared remarks.
Before we begin, I’d like to remind everyone that statements made during
Billionaire Adrian Portelli’s push into the fuel market seems to be taking shape after months of speculations and social media posts.
Signage for Portelli’s LMCT+ has appeared at a former Shell site in Melbourne, leading many to assume that the opening of the brand’s first physical location is not far off.
LMCT+ Signage Appears at Former Shell Site in Melbourne
The former Shell site is located at the corner of Gower St and Plenty Rd in Preston, according to Real Commercial.
The membership-based brand is a result of Portelli’s frustrations with the fuel market in Australia, notes WhichCar, particularly the refusal of major companies to offer discounts.
LMCT+ is, therefore, positioning itself as “rewards hubs” that offer fuel discounts in addition to other promotions and giveaways from the brands.
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It has also been speculated that the Preston location will not be the only LMCT+ sites as it is only a sign of things to come.
Social Media Comments Are Positive
Social media comments regarding LMCT+ and Portelli have largely been positive.
Comments left on LMCT+’s Instagram posts range from calls for cheaper fuel to support for Portelli should he decide to run for office.
“You are a hero to the working class,” one comment reads.
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“Run for parliament & you got my vote,” another comment says.
There is even one comment that reads “Can you just buy Australia and fix it … thanks.”
The Department of Foreign Affairs and Trade (DFAT) has confirmed that another Australian, a male in his 20s, died while skiing in Japan.
The tragic news comes after 22-year-old Brooke Day passed away following a ski lift accident.
Second Australian Dies in While Skiing in Japan
According to a report by news.com.au, the Australia man died while skiing off-piste in an unpatrolled terrain between Niseko Moiwa Ski Resort and Niseko Annupuri International Ski Resort.
The young man had been skiing with a group, who eventually noticed that he disappeared along the way.
His friends went back to search firm and found another group of skiers performing CPR on him.
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He was brought to the hospital, where he was pronounced dead, according to ABC News.
“We send our deepest condolences to the family at this difficult time,” DFAT said in a statement, per 7NEWS. “Owing to our privacy obligations we are unable to provide further comment.”
One Tragedy After the Other
The death of the young Australian man comes after Brooke Day passed away following a ski lift accident.
According to The Gurdian, the 22-year-old sustained critical injuries after her backpack was caught in the ski lift as she was trying to disembark.
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This caused her to be dragged along the snow before being suspended in mid-air. She reportedly suffered a cardiac arrest.
The accident took place at the Tsugaike Mountain resort in Otari, near Nagano.
| Photography and videos by Ricky-Thomas Serikawa for WSJ
A Michigan pension fund wanted to grow the second-largest coffee farm in Hawaii. What happened there demonstrates the perils of investing public workers’ savings in private markets.
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The $16 billion Lansing-based retirement fund ended up abandoning the coffee farm last spring after nine years and $86 million in losses. A few months later, the pension said it had lost $53 million on another ambitious private market bet: an investment with a one-year-old Swiss firm in renewable energy technology.
The state government will offer royalty relief to WA’s fledgling vanadium sector, as part of its push to build a $150 million battery using the material in Kalgoorlie by 2029.
