SI324: Embracing Uncertainty using Adaptive Models ft. Richard Brennan

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 30 November 2024

⏱️ 69 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Today, we dive deep into the complex dynamics of global markets and the often overlooked risks that can accumulate during periods of apparent stability. Together with Richard Brennan, we discuss the rising concerns over declining fertility rates worldwide, highlighting how economic pressures, environmental challenges, and cultural shifts contribute to this seismic change. We draw parallels between these demographic trends and the unpredictability of financial markets, emphasizing the importance of adaptive strategies in navigating uncertainty. The conversation also touches on the limitations of traditional risk management models, advocating for a shift towards frameworks that prioritize resilience and adaptability. In this episode you will gain valuable insights into how both personal and economic landscapes can evolve and respond to changing conditions.

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Episode TimeStamps:

01:37 - What has caught our attention recently?

07:20 - Is now the best time to allocate to alternatives?

12:14 - Industry performance update

17:58 - How we manage uncertainty in "chaotic systems"

25:55 - How to translate ensemble models to trend following

28:25 - The benefits of adding more trend following models

34:10 - It takes guts to be a greedy pig

37:04 - The hidden risks of financial markets

48:47 - Why Value at Risk (VaR) models makes more sense than having stops

56:35 - The inevitable outcome of...

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
0:07.2	and learn about the most dependable and consistent yet often overlooked investment strategy.
0:13.2	Welcome to the Systematic Investor Series.
0:33.2	Welcome, welcome back to this week's edition of the systematic investor series with Richard Brennan and I, Niels Castro-Blaston, where each week we take the pulse of the global market through the lens of a rules-based investor.
0:44.6	Richard is wonderful to be back with you this week. How things down on, I guess you're getting close to peak summer temperature while we're freezing up here.
0:46.3	Or at least it's a bit cold. Yes, things are warming up down here, Newell.
0:49.1	So, yes, we're getting ready.
0:51.3	We're getting our togs out and our towels ready to go to the beaches
0:54.9	and things are getting warm.
0:57.3	I know it's so cold over there, but this is the time as we approach Christmas, you know,
1:03.0	our traditional Christmas meal is sort of a few cold salads and a bit of cold turkey meat, you know.
1:09.7	We don't sort of go down the traditional
1:11.9	path at all. It's all hot down here. Yeah, no, that makes sense. It's odd, you know, in the last
1:17.8	week, so about a week ago, I think we had the biggest one-day dump of snow that I can remember
1:25.3	in the 20 years I've been here.
1:32.2	And now, you know, a few days after, it's like 14 degrees Celsius outside.
1:34.9	It's like, it's really crazy.
1:37.4	But anyways, we're not here to talk about the weather.
1:43.2	But we are here to talk about something initially that is often used when thinking about the weather, which is the radar. So my question is, of course, as you probably guessed, since we last spoke,
1:48.8	what's been on your radar recently? I suppose the thing that's popped up most recently is this
1:54.3	collapse of the ruble and the suspension of the ruble on the trading market. So, you know,
2:00.7	you know how I always think in terms of complex adaptive systems.
	...

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