SI57: Why investors confuse volatility & noise with risk & instability

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 13 October 2019

⏱️ 65 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

On this week’s episode, we discuss the tendency for investors to confuse volatility & noise with risk and instability, the benefits of great mentorship, why the best investments are those that have survived calamitous periods, why risk from any single market shouldn’t be able to ruin your portfolio, and Larry Hite’s observation that there is very little magic in Trend Following. Questions we answer this week include: can a 10-year track record can be considered as anything more than noise? Is there a way to achieve exceptionally high returns with minimal risk & volatility? What really is a ‘fat tail’? Can Trend Followers make money in rising interest-rate environments? Can you apply Trend Following to the VIX index?

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Episode TimeStamps:

00:00 - Intro

01:15 - Macro recap from Niels

08:15 - Top tweets

45:45 - Question 1: Gaetano; Is it reasonable to TF volatility/VIX futures?

50:00 - Debate: Can TF make money in a rising rate environment?

01:01:20 - Benchmark performance update

01:03:30 - Live event update 10/26/19-10/27/19; Special Guest: Denise Shull

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PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:

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.

Transcript

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0:00.0	You're about to join Jerry Parker, Maritz Siebert, and Nealz Kastrup Larson on their raw and honest
0:07.2	journey into the world of systematic investing and learn about the most dependable and consistent
0:12.3	yet often overlooked investment strategy. Welcome to the Systematic Investor podcast series.
0:19.6	Jerry Parker, Moritz Siebert, I in the Elskarst,
0:22.0	Blaston, are back with this week's edition of the Systematic Investor series,
0:25.7	where each week we give you a raw and honest account of what it's like to be a
0:30.4	rules-based investor, what news and articles caught our attention, and of course, where
0:35.1	we also attempt to answer your questions.
0:38.9	As usual, let me start by saying good morning to you, Jerry, and good afternoon to you, Moritz.
0:44.3	Hello, guys. How are you doing? Great. Good morning. Good afternoon.
0:48.1	Yeah, doing great. For me, this 13th of October is actually quite a special day because it's the quote-unquote anniversary of my son surviving a certain cardiac arrest a number of years ago.
1:00.5	So it's always a very special day to wake up to.
1:03.9	So, yeah, an important landmark.
1:08.3	But that is not what we're here to talk about right now.
1:11.5	We are, of course, here to review some of the events during this week.
1:17.5	And then we'll see how that all panned out for the different ways we do trend falling among
1:25.3	ourselves.
1:26.0	And of course, this week was, how should I put it,
1:30.2	a little bit of a different week
1:31.6	because suddenly we had quite a lot of optimism
1:34.6	over here in Europe,
1:37.2	pertaining a possible Brexit deal suddenly.
	...

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