SI332: Market Turbulence: How to Adapt to Regime Changes in Investing ft. Alan Dunne & Mark Rzepczynski
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 25 January 2025
⏱️ 65 minutes
🧾️ Download transcript
Summary
Today, we explore the complexities of current market dynamics, emphasizing the heightened levels of uncertainty stemming from recent regime changes. Mark Rzepczynski shares insights on how this uncertainty can influence investment behavior and market trends, highlighting the importance for investors to adapt their strategies in response to these shifts. The discussion touches on the implications of fluctuating correlations and volatility, particularly for systematic and trend-following strategies. We also explore how the intricate nature of financial markets as complex systems can lead to nonlinear reactions to shocks, making it crucial for traders to consider both measurable risks and the non-measurable uncertainties that can affect their models. The episode wraps up with reflections on the role of institutional arrangements and how they can impact market outcomes in a rapidly changing environment.
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Episode TimeStamps:
01:16 - A flurry of activities
04:05 - The state of VIX and how newspapers and media measure uncertainty
09:11 - How do trend followers take advantage of the uncertainty in markets?
12:50 - What are the components of the regime shift?
16:04 - The implications of the regime shift
17:57 - Industry performance update
19:21 - The state of bond markets from an uncertainty perspective
21:16 - Do...
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 |
| 0:07.0 | and learn about the most dependable and consistent yet often overlooked investment strategy. |
| 0:13.0 | Welcome to the Systematic Investor Series. |
| 0:26.5 | Welcome back to the latest edition of Top Traders Unplugged, |
| 0:30.6 | where each week we take the pulse of the markets from the perspective of a rule space investor. |
| 0:35.7 | It's Alan here sitting in for Neals, who's away on his travels. |
| 0:39.1 | I'll be joining him in the US soon, but in the meantime, I'm here speaking to Mark today. Mark, how are you doing? Not too bad. How about yourself? Good. Yeah, |
| 0:44.9 | well, I'm in Dublin. We're braced for a big storm here tonight and tomorrow, but hopefully we come |
| 0:50.3 | through that okay. How's everything in the Boston area? Yeah, we're having a little bit of |
| 0:55.9 | a polar vortex. So it's a bit a little bit, a little bit chilly out here. So that doesn't mean that |
| 1:01.5 | while the outdoor temperature is low, I think some of the markets have been heating up, |
| 1:06.0 | or at least with the uncertainty that we're seeing. It's certainly interesting times. And we, you know, obviously you guys had the inauguration this week. |
| 1:14.9 | So, um, uh, what fit on your radar? |
| 1:18.4 | I don't need a radar. |
| 1:20.4 | I guess the big issue is, uh, for any market analyst is what is the elephant in the room. |
| 1:26.5 | And the elephant in a room is the, |
| 1:28.1 | is the regime change that we see. And I think that might be the best way to put it is the |
| 1:33.0 | regime change from Biden to Trump. You know, it's a, there have been such a flurry of activities, |
| 1:39.3 | even in the first 24 hours. It's hard for any one person. Keep up. What has changed from last week to this week? |
| 1:50.3 | Yeah, it's certainly a flurry of activity is absolutely rise in terms of all the executive orders |
| 1:56.6 | and new policy announcements and, yeah, everything that goes with it. |
| 2:01.7 | I mean, you brought a lot of topics with you this week, |
... |
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