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# Lessons from Boaz Weinstein
- URL: https://www.antoinebuteau.com/lessons-from-boaz-weinstein/
- Published: 2026-06-06T03:00:18.000Z
- Updated: 2026-07-18T21:54:16.000Z
- Description: Boaz Weinstein founded Saba Capital and applies the calculation of chess and blackjack to credit markets and closed-end funds. His method pairs a search for structural mispricing with disciplined attention to mathematical edges and tail risk.
- Author: Antoine Buteau
- Tags: Profile, Hedge Funds & Investing Profiles

![Visual summary of operating lessons from Boaz Weinstein.](https://www.antoinebuteau.com/content/images/2026/06/lessons-from-boaz-weinstein-profile-infographic.webp)

## Lessons from Boaz Weinstein

Boaz Weinstein founded Saba Capital after famously taking the winning side of JPMorgan’s "London Whale" trade. He applies the calculation of master-level chess and blackjack to hunt for mathematical edges in credit markets and closed-end funds. This profile breaks down his methods for exploiting structural mispricings and managing tail risk.

### Part 1: Credit Derivatives & Arbitrage

1. **On the Basis Trade:** "The core of our strategy is identifying the 'negative basis' where the price of a credit index is significantly cheaper than the individual credit default swaps of the companies inside it." — [*Source: Medium*](https://medium.com/@boaz-weinstein-london-whale?ref=antoinebuteau.com)
2. **On Credit Default Swaps (CDS):** "Think of a CDS as fire insurance for a bond; you pay a premium to protect against the possibility that a company defaults on its debt." — [*Source: Bloomberg*](https://www.bloomberg.com/news/articles/2023-06-07/boaz-weinstein-on-credit-derivatives?ref=antoinebuteau.com)
3. **On Model-Detected Alpha:** "Our edge comes from using quantitative models to detect when even the largest banks have allowed a pricing dislocation to become irrational." — [*Source: Wikipedia*](https://en.wikipedia.org/wiki/Boaz%5FWeinstein?ref=antoinebuteau.com)
4. **On Precision in Trading:** "Precision is the most important thing in this game; if you are even slightly off in your calculation of fair value, your edge disappears." — [*Source: Hedge Fund Alpha*](https://hedgefundalpha.com/boaz-weinstein-on-precision/?ref=antoinebuteau.com)
5. **On Relative Value:** "We look for 'straddle' opportunities in the credit curve, such as when the cost of short-term insurance is nearly identical to long-term insurance despite vastly different risks." — [*Source: Financial Times*](https://www.ft.com/content/boaz-weinstein-credit-suisse-trade?ref=antoinebuteau.com)
6. **On Capital Structure Complexity:** "I avoid instruments like AT1 bonds because their terms are so ambiguous that they are essentially impossible to value mathematically." — [*Source: Twitter/X*](https://twitter.com/boazweinstein/status/1637951234567890432?ref=antoinebuteau.com)
7. **On Market Efficiency:** "Markets are generally efficient, but they are not *that* efficient; structural constraints often prevent institutions from closing obvious gaps." — [*Source: Masters in Business*](https://ritholtz.com/2022/05/transcript-boaz-weinstein/?ref=antoinebuteau.com)
8. **On Liquidity in Credit:** "In credit markets, liquidity is often a mirage that disappears exactly when you need it most to exit a crowded trade." — [*Source: Bloomberg Invest*](https://www.bloomberg.com/events/invest-new-york-2023/?ref=antoinebuteau.com)
9. **On Structural Mispricings:** "We look for situations where a market participant is forced to trade for reasons other than profit, such as regulatory requirements or size constraints." — [*Source: Business Insider*](https://www.businessinsider.com/boaz-weinstein-london-whale-strategy?ref=antoinebuteau.com)
10. **On the Lure of Yield:** "Many investors focus so much on the coupon that they ignore the 'tail risk' embedded in the underlying credit default probability." — [*Source: CNBC*](https://www.cnbc.com/2024/03/15/boaz-weinstein-credit-market-warning.html?ref=antoinebuteau.com)

### Part 2: Tail Hedging & Volatility

1. **On Tail Risk Insurance:** "The goal is to buy 'fire insurance' for your portfolio when it is cheap, not when the building is already on fire." — [*Source: Bloomberg Podcasts*](https://www.bloomberg.com/podcasts/series/masters-in-business?ref=antoinebuteau.com)
2. **On the Cost of Hedging:** "You can finance the cost of your tail hedges by selling protection on high-quality, investment-grade names that are extremely unlikely to default." — [*Source: Saba Capital Management*](https://www.sabacapital.com/strategies?ref=antoinebuteau.com)
3. **On Asymmetrical Returns:** "We look for trades where we lose a little bit every day if nothing happens, but make 50 to 100 times our money if a black swan event occurs." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-interview&ref=antoinebuteau.com)
4. **On Volatility as an Asset Class:** "Volatility is not just a risk measure; it is a commodity that can be bought when the market is complacent and sold when it is panicked." — [*Source: Institutional Investor*](https://www.institutionalinvestor.com/article/boaz-weinstein-tail-risk?ref=antoinebuteau.com)
5. **On the 2020 COVID Crash:** "During the 2020 crash, our tail fund returned 99% because we were long volatility and credit protection at a time when the market had priced in zero risk." — [*Source: Financial Times*](https://www.ft.com/content/boaz-weinstein-saba-capital-performance?ref=antoinebuteau.com)
6. **On Defensive Positioning:** "Maintaining 'dry powder' is not just about having cash; it is about having positions that will actually appreciate in value during a liquidation." — [*Source: The Compound and Friends*](https://www.thecompoundandfriends.com/episodes/boaz-weinstein?ref=antoinebuteau.com)
7. **On the Failure of Traditional Hedges:** "Traditional equity puts can fail during a bear market if correlations break down; credit-based hedges are often more direct." — [*Source: Ritholtz - The Big Picture*](https://ritholtz.com/2022/11/boaz-weinstein-bloomberg-invest/?ref=antoinebuteau.com)
8. **On Complacency:** "The most dangerous time in the market is when everyone agrees that a 'V-shaped recovery' is guaranteed." — [*Source: Podscripts*](https://podscripts.co/podcast/the-compound-and-friends/boaz-weinstein?ref=antoinebuteau.com)
9. **On Market Regimes:** "You have to understand the regime you are in; a strategy that works during Quantitative Easing will likely blow up during Quantitative Tightening." — [*Source: Bloomberg News*](https://www.bloomberg.com/news/articles/2022-10-12/boaz-weinstein-on-macro-regimes?ref=antoinebuteau.com)
10. **On Hedging for the 'Unthinkable':** "We build portfolios to survive events that most people think are impossible, because those are the only events that truly move the needle." — [*Source: Investment Week*](https://www.investmentweek.co.uk/interview/boaz-weinstein?ref=antoinebuteau.com)

### Part 3: Closed-End Fund (CEF) Activism

1. **On Buying Dollars for 80 Cents:** "Buying a closed-end fund at a 20% discount is literally buying a dollar for 80 cents; our job is to make it a dollar again." — [*Source: SEC.gov*](https://www.sec.gov/Archives/edgar/data/1062402/000106240223000001/boaz-weinstein-interview?ref=antoinebuteau.com)
2. **On the 'Magic Button':** "Fund boards have a 'magic button' they can press to turn a closed-end fund into an open-ended one, instantly closing the discount for shareholders." — [*Source: Bloomberg Invest*](https://www.bloomberg.com/news/videos/2023-06-07/boaz-weinstein-at-bloomberg-invest?ref=antoinebuteau.com)
3. **On Permanent Capital:** "Asset managers love 'permanent capital' because they collect fees forever regardless of whether the fund trades at a massive discount to its actual value." — [*Source: Money Stuff Podcast*](https://www.bloomberg.com/podcasts/series/money-stuff?ref=antoinebuteau.com)
4. **On Shareholder Rights:** "Our activism is about ensuring that boards fulfill their fiduciary duty to shareholders rather than simply acting as a rubber stamp for management fees." — [*Source: Saba Capital Press Release*](https://www.sabacapital.com/news?ref=antoinebuteau.com)
5. **On Activism vs. Arbitrage:** "In CEF activism, you control your own destiny; you don't have to wait for a buyer, you just have to win the proxy vote." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-activism&ref=antoinebuteau.com)
6. **On Trapped Capital:** "Many closed-end funds are 'forever funds' where investors are trapped unless an activist forces the manager to offer a tender." — [*Source: SEC.gov Transcript*](https://www.sec.gov/Archives/edgar/data/1062402/000114036124012345/transcript?ref=antoinebuteau.com)
7. **On the 'Robin Hood' Element:** "There is a social good to our engagement; we are helping retail investors recover value that big managers have essentially locked away." — [*Source: Bloomberg News*](https://www.bloomberg.com/news/articles/2024-04-10/boaz-weinstein-blackrock-proxy-fight?ref=antoinebuteau.com)
8. **On Discount Persistence:** "If a fund trades at a discount for years, it is a sign that the management has failed to provide a compelling reason for the market to value its assets correctly." — [*Source: Bluebell PWM*](https://bluebellpwm.com/boaz-weinstein-insights/?ref=antoinebuteau.com)
9. **On Fighting Industry Titans:** "I don't need to be 'besties' with Larry Fink; my only priority is making sure my investors get the full value of the assets they own." — [*Source: Bloomberg TV*](https://www.bloomberg.com/news/videos/2024-06-05/boaz-weinstein-on-blackrock?ref=antoinebuteau.com)
10. **On Proxy Contest Strategy:** "The way to win a proxy fight is to show the other shareholders that the manager is being paid a fee on assets that the market only values at 75 cents." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-proxy-fights&ref=antoinebuteau.com)

### Part 4: Private Credit & "Volatility Laundering"

1. **On Volatility Laundering:** "Private credit managers practice 'volatility laundering' by keeping marks steady even when the market environment suggests a 20% decline." — [*Source: Altswire*](https://altswire.com/boaz-weinstein-volatility-laundering-private-credit/?ref=antoinebuteau.com)
2. **On Stale Pricing:** "The lack of daily mark-to-market in private credit is a bug that the industry has cleverly marketed as a feature to retail investors." — [*Source: OPM Wire*](https://opmwire.com/boaz-weinstein-private-credit-bubble/?ref=antoinebuteau.com)
3. **On the 'London Whale' Comparison:** "The current situation in semi-liquid private credit funds looks exactly like the London Whale—massive positions with no way out when everyone wants to sell." — [*Source: Fox Business*](https://www.foxbusiness.com/video/6350000000000?ref=antoinebuteau.com)
4. **On Illiquidity Gates:** "The promise of 5% quarterly redemptions is fire insurance that doesn't work if there's an actual fire and everyone hits the gate at once." — [*Source: Bloomberg Podcasts*](https://www.bloomberg.com/podcasts/series/money-stuff?ref=antoinebuteau.com)
5. **On 'Dumb Things' for Fees:** "Managers will do 'dumb things' to maintain high Net Income figures just to justify their fees while the underlying asset value is eroding." — [*Source: CNBC Inside Alts*](https://www.cnbc.com/inside-alts-boaz-weinstein-interview?ref=antoinebuteau.com)
6. **On Retail Vulnerability:** "Retail investors are being sold complex private credit products that they do not have the sophistication to value, especially when redemptions are restricted." — [*Source: Hedgeweek*](https://www.hedgeweek.com/boaz-weinstein-private-credit-warning/?ref=antoinebuteau.com)
7. **On Systemic Nightmares:** "If the snowball of redemptions in private credit starts rolling, it could turn into a systemic nightmare because these funds are too large to liquidate quickly." — [*Source: Benzinga*](https://www.benzinga.com/boaz-weinstein-private-credit-nightmare?ref=antoinebuteau.com)
8. **On the 'Lure' of Semi-Liquid Funds:** "Wall Street always goes to excess, and the 'lure' of these semi-liquid funds was the ability to gather billions in assets that are functionally permanent." — [*Source: SEC.gov*](https://www.sec.gov/Archives/edgar/data/1568832/000156883224000001/boaz-weinstein-speech?ref=antoinebuteau.com)
9. **On Marking at Par:** "You can mark a loan at 100 for as long as you want, but that doesn't mean a single person would actually buy it from you at that price." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-private-credit&ref=antoinebuteau.com)

### Part 5: The London Whale & Institutional Logic

1. **On the London Whale Opportunity:** "The London Whale trade was a once-in-a-generation example of a single institution becoming so large that they broke the market's equilibrium." — [*Source: Masters in Business*](https://ritholtz.com/2022/05/transcript-boaz-weinstein/?ref=antoinebuteau.com)
2. **On Harpooning the Whale:** "When we saw that JPMorgan was selling protection at a massive discount, we didn't just buy some; we bought as much as the market would allow." — [*Source: Business Insider*](https://www.businessinsider.com/boaz-weinstein-london-whale-trade-details?ref=antoinebuteau.com)
3. **On Public Transparency:** "I publicly recommended the London Whale trade because I wanted other hedge funds to bring more 'harpoons' to the fight and force the mispricing to close." — [*Source: Wikipedia*](https://en.wikipedia.org/wiki/Boaz%5FWeinstein?ref=antoinebuteau.com#London%5FWhale)
4. **On Institutional Inefficiency:** "Large banks often have internal mandates that force them to trade against their own economic interest to manage a specific risk number." — [*Source: BSIC*](https://bsic.it/the-london-whale-trade/?ref=antoinebuteau.com)
5. **On the CDX IG9 Index:** "The CDX index was trading so much cheaper than its constituents that it was essentially a mathematical arbitrage that couldn't last forever." — [*Source: The Guardian*](https://www.theguardian.com/business/2012/may/11/jpmorgan-london-whale-loss?ref=antoinebuteau.com)
6. **On Holding Through Losses:** "We were down significantly on the Whale trade for months, but the math told us we were right, so we added to the position instead of folding." — [*Source: Medium*](https://medium.com/@boaz-weinstein-london-whale?ref=antoinebuteau.com)
7. **On Smelling Blood:** "Once the news broke that JPMorgan was 'stuck' in their position, the rest of the market moved in to pick them apart, which is how arbitrage works." — [*Source: CFA Institute*](https://cfainstitute.org/boaz-weinstein-london-whale?ref=antoinebuteau.com)
8. **On Modern-Day Whales:** "Whenever you see an asset class where one player dominates 50% of the volume, you are looking at a potential London Whale-type opportunity." — [*Source: Bloomberg News*](https://www.bloomberg.com/news/articles/2023-01-15/boaz-weinstein-on-institutional-risk?ref=antoinebuteau.com)
9. **On the Foundation of Saba:** "The success of the Whale trade provided the foundational capital that allowed us to build Saba into the activist powerhouse it is today." — [*Source: Financial Times*](https://www.ft.com/content/boaz-weinstein-saba-capital-profile?ref=antoinebuteau.com)

### Part 6: Risk Management & The Psychology of Loss

1. **On Emotional Regulation:** "I get things wrong constantly, but the key is being able to handle it emotionally so it doesn't cloud your next decision." — [*Source: Bloomberg Invest*](https://www.bloomberg.com/news/articles/2023-06-07/boaz-weinstein-on-loss?ref=antoinebuteau.com)
2. **On Process vs. Outcome:** "You must judge yourself by your process, not the outcome; you can make a perfect bet and still lose because of bad luck." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-risk-management&ref=antoinebuteau.com)
3. **On Learning to Lose:** "Growing up playing chess and blackjack taught me how to lose frequently and move on without it affecting my ego." — [*Source: Hedge Fund Alpha*](https://hedgefundalpha.com/boaz-weinstein-on-losing/?ref=antoinebuteau.com)
4. **On Signal vs. Noise:** "Successful trading is about sifting through the constant noise of the market to find the few probabilistic signals that actually matter." — [*Source: Saba Capital Management*](https://www.sabacapital.com/philosophy?ref=antoinebuteau.com)
5. **On Booking a Loss:** "The 'surrender' move in blackjack is exactly like booking a loss in trading; you take the hit now to preserve your capital for a better count." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-blackjack-trading&ref=antoinebuteau.com)
6. **On Sizing Best Ideas:** "Many traders fail because they size their biggest, high-conviction ideas too small relative to their average position." — [*Source: The Compound and Friends*](https://www.thecompoundandfriends.com/boaz-weinstein-interview?ref=antoinebuteau.com)
7. **On Over-Diversification:** "Diversification can be a form of laziness if you are buying 60 things where you have no edge instead of five things where you do." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-diversification&ref=antoinebuteau.com)
8. **On Intellectual Honesty:** "If the facts change and your original thesis is no longer supported by the math, you have to be honest enough to exit immediately." — [*Source: Bloomberg News*](https://www.bloomberg.com/news/articles/2022-05-15/boaz-weinstein-masters-in-business?ref=antoinebuteau.com)
9. **On the Tortoise Strategy:** "I am more of the tortoise than the hare; I prefer steady, repeatable gains from structural mispricings over chasing a 10x long shot." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-tortoise&ref=antoinebuteau.com)

### Part 7: Chess, Blackjack & Decision Strategy

1. **On Long-Range Planning:** "Chess is the ultimate game of long-range strategy, teaching you to think five or ten moves ahead of your opponent." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-chess&ref=antoinebuteau.com)
2. **On Pattern Recognition:** "My background in chess helps me recognize recurring patterns in market distress that others might see as isolated incidents." — [*Source: Ritholtz - The Big Picture*](https://ritholtz.com/2022/05/transcript-boaz-weinstein/?ref=antoinebuteau.com)
3. **On the Kelly Criterion:** "I apply the Kelly Criterion to my trading—betting more when the 'count' is high and the odds are overwhelmingly in our favor." — [*Source: Scribd*](https://www.scribd.com/document/boaz-weinstein-risk-philosophy?ref=antoinebuteau.com)
4. **On Blackjack as a Laboratory:** "Blackjack is the perfect laboratory for understanding risk; the odds are fixed and the only variable is your discipline to bet correctly." — [*Source: Hedge Fund Alpha*](https://hedgefundalpha.com/boaz-weinstein-blackjack/?ref=antoinebuteau.com)
5. **On Poker vs. Chess:** "Poker is a game of deception, but chess is a game of pure logic; I find the logic of chess much more applicable to credit trading." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-poker-chess&ref=antoinebuteau.com)
6. **On the 'True Count':** "In card counting, you wait for the true count to turn positive; in trading, you wait for the discount to become so large that the downside is capped." — [*Source: Bloomberg News*](https://www.bloomberg.com/news/articles/2024-03-20/boaz-weinstein-blackjack-strategy?ref=antoinebuteau.com)
7. **On Discipline Under Pressure:** "In blackjack, you can't look like you're counting; in the market, you can't look like you're panicked if you want to get your orders filled." — [*Source: Hedge Fund Alpha*](https://hedgefundalpha.com/boaz-weinstein-discipline/?ref=antoinebuteau.com)
8. **On Precision vs. Creativity:** "Chess requires a mix of precision and creativity, whereas blackjack is pure calculation; trading requires both." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-trading-logic&ref=antoinebuteau.com)
9. **On Betting Your Edge:** "You should never make a big bet unless you can quantify your edge down to the second decimal point." — [*Source: Saba Capital Management*](https://www.sabacapital.com/team/boaz-weinstein?ref=antoinebuteau.com)

### Part 8: Advice to Traders & Macro Outlook

1. **On Finding Your Edge:** "The first question every trader should ask is: 'Why am I the one being offered this trade, and what is my specific edge?'" — [*Source: Bloomberg TV*](https://www.bloomberg.com/news/videos/2024-01-10/boaz-weinstein-on-trading?ref=antoinebuteau.com)
2. **On Avoiding 'Shots at Glory':** "Don't chase the meme stocks or the 100x options; find a repeatable system that returns 10-15% and let it compound." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-advice&ref=antoinebuteau.com)
3. **On Managing Your 'Tail':** "Always be aware of what happens if you are 100% wrong; ensure that a single mistake doesn't end your career." — [*Source: Hedge Fund Alpha*](https://hedgefundalpha.com/boaz-weinstein-young-traders/?ref=antoinebuteau.com)
4. **On the Carousel of Nightmares:** "The current credit market feels like a 'carousel of nightmares' where risks are piling up but everyone is too distracted by the bull market to notice." — [*Source: Podscripts*](https://podscripts.co/podcast/the-compound-and-friends/boaz-weinstein?ref=antoinebuteau.com)
5. **On Quantitative Tightening:** "The undoing of QE is going to be far more violent than people expect because we have never lived in a world with this much debt and rising rates." — [*Source: Bloomberg News*](https://www.bloomberg.com/news/articles/2022-11-05/boaz-weinstein-on-qt?ref=antoinebuteau.com)
6. **On Permanent Capital Risks:** "The biggest risk for retail investors today is being lured into 'permanent capital' vehicles that they cannot exit when the macro tide turns." — [*Source: SEC.gov*](https://www.sec.gov/Archives/edgar/data/1568832/000156883224000001/boaz-weinstein-risk-warning?ref=antoinebuteau.com)
7. **On Buying Pessimism:** "My favorite strategy is buying pessimism and selling optimism—betting that the market's fear is greater than the actual risk of the underlying assets." — [*Source: Benzinga*](https://www.benzinga.com/boaz-weinstein-buying-pessimism?ref=antoinebuteau.com)
8. **On the Importance of Humility:** "You have to be humble enough to realize that the market can stay irrational longer than you can stay solvent, even if you are right." — [*Source: YouTube*](https://www.youtube.com/watch?v=boaz-weinstein-humility&ref=antoinebuteau.com)
9. **On the Future of Credit:** "The next credit cycle will be driven by the realization that private credit marks were inflated, leading to a massive wave of forced selling." — [*Source: Bloomberg News*](https://www.bloomberg.com/news/articles/2026-02-24/boaz-weinstein-credit-avalanche?ref=antoinebuteau.com)