SI289: Kahneman, Trend Following & Cocoa ft. Mark Rzepczynski
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 30 March 2024
⏱️ 67 minutes
🧾️ Download transcript
Summary
Mark Rzepczynski joins us to remember one of the most important people within modern-day finance, author and psychologist, Daniel Kahneman, and the impact he had on our industry. We also discuss how increasing interest rates change the way investors behave and why trend following and CTAs have performed so well the past 5 years, perhaps without been given the credit the strategy deserves. We also dive into the cocoa market to discuss why it may still have a long way to go, despite racking up another 60% rise in March 2024 alone. We then move on to explain why the financial conditions index is important to understand for trend followers and why Mark believes stocks may continue to rise. Lastly, we discuss what makes trend following unique, why having trend following in your portfolio can help you achieve better performance and more diversification and much more.
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Episode TimeStamps:
01:03 - Remembering Daniel Kahneman
03:54 - Things are changing
09:54 - Industry performance update
13:32 - What the Credit Suisse Managed Futures Index is missing
16:23 - Let's talk about Cocoa
21:55 - Trends can last longer than people expect
24:44 - Is the Cocoa market a bubble?
28:31 - Less markets = better performance?
30:43 - Static vs. Dynamic position sizing in the Cocoa market
39:13 - Understanding the financial conditions index
45:09 - A euphoric...
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 |
| 0:09.0 | and learn about the most dependable and consistent yet often overlooked investment strategy. |
| 0:14.0 | Welcome to the Systematic Investor Series. |
| 0:28.9 | Welcome and welcome back to this week's edition of the Systematic Investor Series with Mark Resensky and I, Neil's Castor Larsen, where each week we take the pulse of the global market |
| 0:33.7 | through the lens of a rules-based investor. |
| 0:36.6 | Mark, great to have you back this week. |
| 0:39.0 | I know it's a very early start for you today and it's even Easter Friday. So I really, |
| 0:43.3 | really appreciate you taking time out to do this. How are you doing? Not too bad. Not too bad. |
| 0:50.7 | It's been a good first quarter for a lot of managers. |
| 0:56.7 | So that's been exciting. |
| 0:59.3 | And this would be good to take a little bit of time off for the weekend and then sort of regroup for the second quarter. |
| 1:05.1 | Yeah, no, absolutely. |
| 1:06.6 | And we do have a long list of topics actually all provided by you, I have to say. |
| 1:12.3 | So again, I really do appreciate that. |
| 1:14.7 | But of course, first, I'm always curious to know what's kind of been on your radar besides |
| 1:20.0 | the topics we're going to talk about since we last spoke a few weeks ago. |
| 1:24.8 | You know, obviously we could talk about a lot of events going on in the marketplace, |
| 1:29.1 | but the thing that really sort of captured me and caused me a little bit of pause was the fact |
| 1:34.7 | that Daniel Kahneman, the Nobel Prize winner, died this week. And so for those who don't remember, |
| 1:43.0 | Daniel Kaineman won the Nobel Prize in economics |
| 1:45.7 | for all of his work on behavioral psychology. |
| 1:49.3 | So he really isn't an economist, but he won it in economics for all of what he did |
... |
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