SI227: Trend Following in an Uncertain World ft. Richard Brennan
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 21 January 2023
⏱️ 85 minutes
🧾️ Download transcript
Summary
Richard Brennan joins us for a weekly conversation on Trend Following, where we reflect on the new TopTradersUnplugged mini series and how the beginning of 2023 has been so far. We also take questions from listeners regarding backtesting methods and how Richard uses backtesting to manage risk, rather than predict expected returns. Additionally, we discuss why trend followers should be more aware of uncertainty and outliers, why Richard is a tail hunter and why he compares it to surfing, how Richard deals with change and the importance of understanding the natural cycle of transitions and stable regimes, complex adaptive systems, why everything ultimately moves towards an equilibrium condition where everything stops and how it can be corrected through math, the importance of understanding how a system operates before applying math and that everything is process driven, how Richard thinks of risk in an uncertain world and much more.
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Episode TimeStamps:
02:34 - Thoughts on new mini series
09:46 - Battleship still floating?
11:56 - Q1, Markus: Richard's biggest takeaways in his backtesting
18:12 - Q2, Tim: About inconsistencies in the selection process
31:27 - Uncertainty rather than certainty
49:38 - Why not focus on other trends?
56:44 - Outliers - features of liquid markets?
01:03:28 - Everything is a process
01:12:21 - Managing risk in an uncertain world
01:21:24 - Thanks...
Transcript
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| 0:00.0 | You're about to join Neil's Kostrup Larson on a raw and honest journey into the world of systematic investing and learn about the most dependable and consistent yet often overlooked investment strategy. |
| 0:13.0 | Welcome to the Systematic Investor Series. |
| 0:26.9 | Welcome and welcome back to this week's edition of the Systematic Investor series with Richard Brennan and I, Neil's Kasp Larsen, where each week we take the pulse of the global |
| 0:31.8 | markets through the lens of a roles-based investor. |
| 0:34.8 | If you're new to the show, I hope this episode will trigger your curiosity enough to check |
| 0:38.8 | out the back catalog and listen to some of the past episodes you may have missed. |
| 0:42.6 | Like my conversation with Rob last week, where he answered some really detailed questions |
| 0:47.0 | about moving average crossover systems and a lot of other stuff. |
| 0:51.4 | Also, I would encourage you to listen to the midweek episode |
| 0:54.4 | where Gem and I was joined by the head of commodity research |
| 0:57.6 | at Goldman Sachs, Jeff Curry, |
| 0:59.8 | for what I think might be even a top five episode of 2023, |
| 1:03.9 | even if we're only three weeks into the new year. |
| 1:06.1 | But it was really that fantastic, |
| 1:07.9 | so I hope you'll enjoy that conversation. |
| 1:10.2 | And, of course, not least, I hope you |
| 1:12.9 | are enjoying our new mini-CTA series where Alan and I have managed to line up the, kind of the real |
| 1:19.2 | decision-makers at most of the largest CTAs in the world for some very meaningful conversations |
| 1:24.5 | on many of the most important topics. I don't think this has ever been done before, so I hope you enjoy and appreciate all the time |
| 1:31.4 | and access we have been given to these true industry leaders. |
| 1:36.0 | So head over and check it out once you're done listening to me and Rich today. |
| 1:41.3 | Anyway, Rich, it is amazing to be back with you this week. |
... |
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