TTU110: The Opportunity of Volatility ft. Alan Sheen of Dalton Street Capital – 1of2
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 25 September 2019
⏱️ 40 minutes
🧾️ Download transcript
Summary
Today on Top Traders Unplugged, I’m speaking with Alan Sheen, Founder and CIO of Dalton Street Capital. Alan has an interesting background in science and engineering, and also spent time in the military, which allowed him to later thrive in rules-based investing. He’s also the first Australian manager to be on the podcast. Listen in to today’s episode to learn about Alan’s journey from the Australian military to starting his own investment firm, why investors should look at volatility not as risk but as an opportunity, and what an investor’s own personal car says about their investment strategies.
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In This Episode, You’ll Learn:
- What Alan’s childhood was like in Australia
- Why Alan studied aeronautical engineering
- How Alan equates gas-turbine engines with robust investing
- How Alan’s experience in the military helps him as an investor
- How Alan was influenced by Darwin’s “The Origin of the Species”
- Quantitative investment’s prevalence in Australia in the early ’90s
- The influence the VIX Index had on Alan’s career
- How Alan’s hedging strategy turned into a managed futures strategy
- Why Alan use an equity portfolio as collateral instead of cash
- How volatility can be opportunity and a friend
- How Berkshire Hathaway has benefited from a volatile market
- The importance of an investment manager to personalize their hedge funds
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Transcript
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| 0:00.0 | I learnt all I ever needed to know about systematic and quantitative investing even before I set foot in the field. |
| 0:12.0 | Because systematic and quantitative investing at the end of the day is about discipline. |
| 0:17.0 | Imagine spending an hour with the world's greatest traders. Imagine learning from their |
| 0:22.5 | experiences, their successes, and their failures. Imagine no more. Welcome to Top Traders Unplugged, |
| 0:30.2 | the place where you can learn from the best hedge fund managers in the world so you can take your |
| 0:34.8 | manager due diligence or investment career to the next level. |
| 0:38.5 | Before we begin today's conversation, remember to keep two things in mind. |
| 0:42.5 | All the discussion we'll have about investment performance is about the past, and past |
| 0:46.7 | performance does not guarantee or even infer anything about future performance. |
| 0:51.2 | Also understand that there's a significant risk of financial loss with all |
| 0:54.6 | investment strategies, and you need to request and understand the specific risks from the investment |
| 0:59.7 | manager about their product before you make investment decisions. Here's your host, veteran hedge fund |
| 1:05.3 | manager, Nealz Kostrup Larson. |
| 1:22.5 | Hey, everyone, and welcome back to another edition of Top Traders Unplocked, where today I'm joined by Alan Sheen, who is the founder and CIO at Dalton Street Capital, based in Sydney, Australia. |
| 1:26.5 | And I'm pretty sure the first Australian manager on the podcast. |
| 1:29.6 | So first of Al, thanks so much for coming on the podcast with me today. I'm very excited to being able to speak to you today and our conversation |
| 1:36.0 | in general. Thank you very much, Neil. The feeling is mutual. Good stuff. Now, I want to kick off |
| 1:42.3 | as usual by framing what we're going to talk about today |
| 1:46.0 | by getting a better understanding of your journey into the rules-based world of investing, |
| 1:51.4 | which even today I think is not fully appreciated by enough investors. So why don't you take us |
| 1:57.4 | back to how it all began and how you kind of got to where you are today? |
| 2:02.1 | Well, I'd probably have to go back to almost childhood just to give a bit of an understanding |
... |
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