TTU12: The Philosophy, Habits and Personal Traits Required to Excel in the Hedge Fund Industry ft. Mathias Bucher of AllMountainCapital – 2of2

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 10 July 2014

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

"I think we are in a major, industrialization of the finance industry. The CTA industry is no exception" Welcome back to Top Traders Unplugged. In this episode we continue our conversation with Dr. Mathias Bucher the Co-Founder of AllMountainCapital. In this episode we go deep in the philosophy, habits and personal traits required to excel in the hedge fund industry. It's a pleasure to have you here and we hope you enjoy the episode. In This Episode, You'll Learn: About Stop Loss, Risk Management and overall Exit Strategies How the current drawdown is effecting current testing and research at AllMountainCapital How Mathias takes the stress of drawdowns and turns it into creative power "I always try to channel potentially negative emotion into some positive action. I think that is my personal way of dealing with the distress of drawdowns" The research cycles in the program and the company as a whole at AllMountain An example of a research idea developed and how it was implemented Current research interests in business development and market positioning as a CTA Why Dr. Mathias Bucher and Dr. Tilman Keese base their business in Wollerau rather than a major financial hub The threats and challenges involved in growing a young CTA firm "I strongly feel that there is a natural boundary to a reasonable leverage that you should take, as a manager, if you don't want to gamble your business" Dr. Mathias Bucher's perception on why the CTA industry excellence seems to be shifting to Europe Learn about the concept of the Industrialization of the Global Financial System The human traits needed to strive in the CTA industry The vision for the future of AllMountain "Research is a two sided sword. You can do to little and lose your innovation or you can do to much and end up losing the robustness of the model" Resources & Links Mentioned in this Episode: Larry Hite and ISAM Watch another interview with Dr. Mathias Bucher on Opalesque TV. "We want to be invested only in the 10-20 best markets at any time." Sponsored by Swiss Financial Services and Saxo Bank: Connect with AllMountain Capital: Visit the Website: www.allmountaincapital.com Call AllMountain Capital: +41 (0) 55 511 05 85 E-Mail AllMountain Capital: [email protected] Follow AllMountain Capital on Linkedin "Sitting in the countryside for me personally is a very good thing. I get a lot of creativity from nature and doing sports. I think I would feel less comfortable sitting in London, for example"

Transcript

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0:00.0	You're listening to Top Traders Unplugged, episode number 012, where I continue my conversation with
0:07.3	Matthias Boker, co-founder and partner of all Mountain Capital. This episode is sponsored by
0:13.5	Saxo Bank and Swiss Financial Services. Welcome back to Top Traders Unplugged, where the best
0:19.9	traders in the world come to share their experiences, their successes, and their failures.
0:24.8	Let's rejoin the conversation with your host, veteran hedge fund manager, Niels Kastro Flaarson.
0:46.3	Now you've mentioned another subject which I'd like to talk about next risk management.
0:55.8	You've mentioned it and talked about it so that my understanding at least is that this is very important in the way you approach things,
1:04.0	the way you've designed things. So maybe you could tell me how you define risk and what targets of risk you're looking at and, you know, how you've gone about using this approach so we're typically looking at risk as
1:15.4	the volatility the var budget like pretty much in line with the industry here our risk management
1:25.4	consists of three layers.
1:30.8	We have a risk management layer on the portfolio level.
1:38.4	Then with the VOLA target, you know, the bar budget that we want to allocate.
1:48.2	Then we will, on an asset allocation level, make sure that the portfolio is optimally diversified at each time.
1:56.4	And then we have on a single market or single position level, we have this volatility stops, essentially.
2:01.0	We don't use profit targets or these kind of things.
2:08.7	You can think of it like a probability band around the trend.
2:14.8	So the trend is up, for example, in equities right now.
2:23.3	Now, should equities revert the probability that this trend is still up, gets lower and lower until it comes to a point where it tends towards zero and that would be the moment where our stop would
2:30.3	step in and take the position out.
2:33.3	So when you say volatility, it's not purely volatility.
2:37.2	It is also based on a reverse movement in the price.
2:40.8	Absolutely.
	...

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