SI154: Defining 'Outliers' from a Trend Follower's Perspective ft. Richard Brennan
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 21 August 2021
⏱️ 65 minutes
🧾️ Download transcript
Summary
Richard Brennan joins us today to discuss the current global risk factors that could cause a large liquidity event, what the term ‘outlier’ really means from a Trend Follower’s perspective, the role of currencies in a Trend Following portfolio, the point at which diversification can end up diluting returns, whether different asset classes should be traded on different timeframes, some thoughts on pyramiding, and defining ‘non-linearity’ when discussing Trend Following models.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In this episode, we discuss:
- The increasing global risks that could cause large market selloffs
- How a Trend Following trader thinks about 'outliers'
- The role of currency pairs in a Trend Following system
- Diversification versus 'Di-worse-ification'
- Whether to use different timeframes for different asset classes
- Thoughts on 'pyramiding' in and out of positions
- Rich's explanation of the term 'non-linearity squared'
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Episode TimeStamps:
00:00 – Intro
02:09 – A huge thank you to listeners of the show for leaving your 5-star reviews on iTunes
02:31 – Macro recap from Niels
11:17 – Weekly review of performance
17:10 – Q1; Adam: At what point does diversification become dilution?
22:32 – Q2; Mathew: Have there ever been any years where currencies were your top performers?
32:09 – What the term ‘outlier’ really means from a...
Transcript
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| 0:00.0 | You're about to join Jerry Parker, Maritz Siebert, and Neil's Kostrup Larson on their |
| 0:06.3 | raw and honest journey into the world of systematic investing and learn about the most dependable |
| 0:11.6 | and consistent yet often overlooked investment strategy. Welcome to the Systematic Investor |
| 0:16.8 | podcast series. |
| 0:27.1 | Welcome and welcome back to this week's edition of the Systematic Investor Series with Richard Brennan and I, Nils Kastroh Larsen, where each week we take the pulse of the global markets |
| 0:31.4 | through the lens of a rules-based investor. |
| 0:34.5 | For those of you who are regular listeners, our conversations are intended to give you as much |
| 0:39.4 | of the nurture and encouragements as the turtles got back in the 1980s, as Jerry likes to put it. |
| 0:45.1 | And if you're new to the show, we hope that today's episode will trigger your appetite |
| 0:48.9 | to learn more by diving into the back catalog and listen to all of the past episodes that you may have missed, |
| 0:56.3 | like last week's episode with Mark, where we duck deep into how and why trend following can help investors |
| 1:03.1 | deal with the different kinds of unknowns, as the late Donald Rumsfeld famously described, |
| 1:10.3 | all black swans as they are also known as. |
| 1:13.8 | Rich, great to be back with you this week. How are things down under? |
| 1:18.6 | Very good, Neils. Fortunately, in Queensland, we're not in lockdown, but a lot of the other |
| 1:24.2 | states in Australia are at the moment. So we're the odd fish in the pool at the moment, |
| 1:29.8 | but we're benefiting from being able to get out and about |
| 1:33.6 | and enjoying life at the moment. |
| 1:35.5 | So we're taking the most of it. |
| 1:37.0 | I'm glad to hear that because you do hear all of these stories |
| 1:40.5 | about how countries, different countries, |
| 1:42.5 | are dealing with this new wave of COVID, |
... |
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