SI40: Is past performance actually indicative of future returns? ft. Corey Hoffstein

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 16 June 2019

⏱️ 100 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

This week, we’re joined by Corey Hoffstein from Newfound Research, who also hosts the Flirting With Models podcast. We discuss his journey into Systematic Investing, why the year you enter the markets will likely impact how you invest in the future, and why random returns can actually be worse for your system than bad returns. Corey explains the term ‘Sequence Risk’, why investors should avoid being too short-term, why risk can only be transformed and not destroyed, and if past performance is actually indicative of future returns. We also get Corey’s views on simplicity versus complexity, how he approaches diversification, and how he invests personally.

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Episode TimeStamps:

00:00 – Intro including discussion of weekly events and the latest news from the FED

05:35 – Weekly review of performance

08:50 - Corey's journey

22:00 – Corey breaks down the 3 components of diversification: What, How and When

35:10 – Question: How do you know when your model is broken?

42:15 – Question: Do you think TF will continue to work?

52:00 – Question: What is sequence risk? & Why we should pay attention to it!

56:50 – Question: What do you mean by risk cannot be destroyed it can only be transformed?

01:01:20 – Question: How do you convince investors to include TF in their portfolio?

01:06:45 – Question: Please discuss simplicity, complexity, model robustness, etc.

01:17:40 – Question: How do you prioritize drawdown management above all else?

01:21:20 –...

Transcript

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0:00.0	You're about to join Jerry Parker, Maritz Siebert, and Nealz Kostrup Larson on their raw and honest journey into the world of systematic investing and learn about the most dependable and consistent yet often overlooked investment strategy.
0:15.0	Welcome to the Systematic Investor podcast series.
0:18.0	Marit Seber and I, Niels Kostruplastin, are back with this week's edition of the
0:24.0	Systematic Investor Series, which is our weekly ongoing raw exploration of the world of
0:28.6	rules-based investing, and of course where we also take some of your questions.
0:32.3	But today we're going to deviate a bit from our usual format. One, because Jerry is out today.
0:38.7	And two, because we are delighted to be joined by a very special guest,
0:42.4	namely Corey Hofstein, who really is someone that we have been looking forward to bringing
0:46.8	on the show for some time.
0:48.5	So let me start by saying good morning to you and welcome to the show, Corey.
0:53.5	Neals, Moritz, Ghost of Jerry.
0:56.0	Thanks for having me.
0:56.7	Really excited to be here.
0:58.1	Hey, Corey.
0:58.4	You know, one thing I noticed was, I mean, if you were here in Switzerland with me, you
1:03.8	would fit right in with your surname.
1:05.6	Are there some European, you know, history there?
1:10.3	Well, you know, like, I think like a lot of American families,
1:13.5	I don't actually know the whole truth as to the name,
1:16.2	the at least family lore.
1:19.2	And as far as we can tell, we have no German in our name despite,
1:23.9	in our background, despite the surname.
	...

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