Investor who returned 4,000% in Q1 2020 explains what people get wrong about risk mitigation

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Hedge fund manager Mark Spitznagel, the founder of $11 billion “Black Swan” hedge fund Universa Investments, says investors have been getting risk mitigation wrong from the start.

“Our goals are even wrong. And really, we have Modern Portfolio Theory to thank us for this. But it’s just kind of a heuristic of investing that you need to take more risk in order to get higher returns, in order to get more wealth at the end of the day. And as you take less risk, your returns are going to go down,” Spitznagel told Yahoo Finance Presents in a rare interview to discuss his second book, “Safe Haven: Investing for Financial Storms,” which he describes as his firm’s “manifesto.”

The 50-year-old professional safe-haven investor said, “The goal of risk mitigation, like the goal of investing, should be to raise our rate of compounding over time,” which he adds “flies in the face of everything we know from modern finance.”

It’s what Spitznagel has dubbed the “great…

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