Ep. 666: Aaron Brown Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Michael Covel

Investing, Business

4.6 • 730 Ratings

🗓️ 11 June 2018

⏱️ 46 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

My guest today is Aaron Brown, a finance practitioner, expert on risk management and gambling, speaks frequently at professional and academic conferences and author of “Red-Blooded Risk,” “The Poker Face of Wall Street,” and co-author of “A World of Chance.” He was Chief Risk Manager at AQR Capital Management and one of the original developers of value at risk. At 8 or 9 years old Aaron would read the newspaper everyday just to see the sports and Wall Street numbers. Over time, he started to see patterns in those numbers and felt he might be able to make money off it. He came across a book at his library that mathematically proved he could “beat the house.” At age 14 Aaron knew he could walk into a poker game and walk out with his opponents money. He gambled into his early 20’s until he realized the real money to be made was on Wall Street.

The topic is risk management and gambling.

In this episode of Trend Following Radio we discuss:

Quants
Libertarian
Poker
Gambling
Efficient market hypothesis
Black swans

Jump in!

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I’m MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I’m proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

To start? I’d like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/

You can watch a free video here: https://www.trendfollowing.com/video/

Can’t get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms:
Twitter: @covel
Facebook: @trendfollowing
LinkedIn: @covel
Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Transcript

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0:00.0	This is Trend Following Radio, where great thinking comes alive.
0:10.9	Nobel Prize winners, legendary traders, bestselling authors, and the pros that know what drive us irrational human beings.
0:21.2	I am your host, Michael Coval.
0:24.0	Not filtered, raw, honest.
0:27.4	That's my passion.
0:33.1	My guest today, Aaron Brown, an American finance practitioner, author, expert risk management,
0:42.2	gambling related issues, most famously known as the former chief risk manager at AQR Capital Management,
0:51.5	one of the biggest funds in the world, I believe north of $100 billion.
0:56.9	You have to think that if Cliff Astin is signed off on hiring Aaron Brown, there must be
1:02.0	something interesting about this guy, even if we've not read his books or know anything about
1:07.1	him.
1:08.5	And oh, by the way, if you want to check out something kind of cool, the MIT
1:12.5	educational forum with Aaron Brown where he discusses the history of poker. There you go. Send me
1:21.0	your thank you in email for that one alone. To listen to Aaron describe something like a simple card game and the history of America
1:30.0	and how it all ties together. Really cool stuff. Today I take Aaron on my podcast around the risk
1:38.4	landscape, picking and prodding his mind as much as I can to get him to give me as much as he will.
1:45.6	I hope you enjoy this conversation with Aaron Brown.
1:53.8	So, you know, so many people, Aaron, they want to be the quant.
1:58.8	But it's kind of an odd thing where people, they want to be this great-sounding
2:04.8	term, but not many people are comfortable with an occupation where you really might not
2:12.7	know more than 51 percent, are they?
2:15.4	Well, let me take a slightly discursive answer to that. You know, the word was
	...

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