And there’s not a ready investment available that would allow one to bet against securities backed by student loans — no index like the one
that hedge fund managers depicted in “The Big Short” used to bet against mortgages before the crisis.
“If I could have gone to Goldman Sachs ‘R’ Us and said, ‘I’ll take a short on this tranche, a short on
that tranche,’ I would have done that, all day, every day,” said Taylor Mann, a researcher who has studied the student-loan market in granular detail, over a recent taco dinner in Athens, Tex., near where he lives.
Still, his take on the student-loan market, which he has described in a research paper as an “education bubble” backed by “unambiguously toxic” loans, has resonated for some: Mr. Trafton admires his work,
and on SumZero, an online platform catering to investment professionals, Mr. Mann’s short recommendations on stocks like Capella Education, Apollo Education and Navient attracted top popularity ratings.
isn’t available, no, we don’t have any bespoke investment products,” he added, “it was like, ‘I’ve got to move on.’”
Mr. Mann is now focused on starting a hedge fund that looks for compelling trades in currencies
and stocks, rather than just trades related to student loans.
