Hacker News new | ask | show | jobs
by csomar 1245 days ago
It’s fancy talk but it really has no value.

Let’s say an investment has a 20% return and your calculation gives a 0% default chance for the first four years. You can structure your investment to compound for the first four years and get back your initial capital after the fourth.

You are essentially now (4 years later) on a risk free 20% return. Your initial capital can be reinvested somewhere else.

If there is something I learned trading the financial markets is that structuring is the only thing that matters and what will bring your returns. The other thing I learned is that real 20% returns with little risk are abundant if you are looking hard enough and comfortable executing exotic trades.