SI381: Process Over Pain: Trend Following in an Unforgiving Market (Group Conversation Part 2)
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 712 Ratings
🗓️ 3 January 2026
⏱️ 64 minutes
🧾️ Download transcript
Summary
In part two of our year-end roundtable, the Systematic Investor team goes beyond performance to ask harder questions about the path forward. Are today’s drawdowns a signal of structural change? - or just the cost of staying disciplined in a low-volatility regime? As allocators repackage old ideas under new acronyms and model drift tempts even seasoned managers, the conversation turns to what still holds. From AI and capital efficiency to the quiet value of doing less, this is about defending process when the payoff isn’t obvious - and knowing what not to change when pressure mounts. We close off with our 2026 Outrages Predictions... don't miss them!
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Episode TimeStamps:
00:00 - Opening and recap of the year end roundtable format
02:05 - Introducing AI in systematic investing and total portfolio approaches
04:00 - Will TPA meaningfully increase allocations to CTAs or just rebrand 60/40
06:30 - Practical uses of AI in research, coding and client communication
08:50 - Process stability in changing regimes and the temptation to “fix” models after pain
12:00 - When, if ever, model changes are justified versus pure overfitting
16:00 - What really causes CTA drawdowns and why “nothing happening” is so costly
20:00 - Communicating long and shallow drawdowns to committees that want simple villains
24:00 - High volatility and leveraged trend products for the retail and ETF audience
28:00 - Capital efficiency, portable alpha and how higher rates change the game
32:00 - Is dispersion in CTAs healthy diversification or a barrier to broader adoption
36:30 - Outrageous predictions for 2026 in rates, equities, vol and trend following
41:00 - Final reflections, investor takeaways and invitation for listener questions
Copyright © 2025 – CMC AG – All Rights Reserved
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1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here
2. Daily Trend Barometer and Market Score
One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here
3. Other Resources that can help you
And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here
Transcript
Click on a timestamp to play from that location
| 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. |
| 0:27.1 | Welcome, welcome back to this week's edition of the Systematic Investor Series with Katie Kaminsky, Jim Kassang, Rob Carver, Mark Resetsinsky, Rich Brennan, Alan, |
| 0:34.0 | Alan Donn, Nick Bolters, Andrew Beer, You of Git, and I, Niels Kastro Larson. |
| 0:38.5 | As you can tell from this introduction, |
| 0:40.4 | today's and last week's episodes were very special |
| 0:43.4 | because it's the time of the year |
| 0:44.9 | where all 10 of us get together |
| 0:46.5 | for one big conversation and debate. |
| 0:49.5 | So firstly, let me start by thanking all of you |
| 0:51.6 | for making the time for this extended recording today, |
| 0:54.4 | which I really have been looking forward to. And of course, for all the time and energy, |
| 0:59.5 | you have put into making all the amazing weekly episodes that we have published this year. |
| 1:05.1 | It means a lot to me. And based on the feedback that we get, I know it means a lot to our community. |
| 1:11.8 | We've recorded our conversation on December 17th, and last week we published part one of the |
| 1:17.3 | conversation, and today you'll be joining us for part two. We got a great lineup of topics |
| 1:23.4 | across the two episodes, and just to mention some of the themes that we will be covering in this group conversation, |
| 1:30.0 | these are things like the impact of market selection on trend following, |
| 1:35.1 | the massive bull cycle in non-correlated investments, and how three years in, |
| 1:39.7 | it's still in its infancy. |
| 1:41.9 | We're going to be talking about the period 2023 to 2025, which has been characterized by |
| 1:47.6 | large dispersion between trend managers. |
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