TTU50: Why Optimism is Important ft. Dave Sanderson of KFL Capital Management – 2of2

Top Traders Unplugged

Niels Kaastrup-Larsen

News, Investing, Business News, Business

4.8 • 715 Ratings

🗓️ 4 December 2014

⏱️ 74 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Welcome to Part 2 of our conversation with Dave Sanderson. In this episode we explore his trading program in detail, from the markets the firm trades to how they describe their program to investors. We also explore the challenges that he goes through as a business leader, dealing with drawdowns, and why optimism is so important to Dave.

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In This Episode, You’ll Learn:

Why Dave believes that QIM is a unique firm in a reasonably similar category as KFL Capital Management.
How to describe Krystal to investors and why it can be a challenge.
About the length of time it takes for Krystal to compute the data and make a decision.Why the breakthroughs in computational power are supporting KFL Capital Management to make their systems faster each year.
The markets KFL trades.
Expected drawdown and volatility Krystal expects.
How Dave expects to deal with drawdown environments.
Research cycles within KFL Capital Management and the potential for a second Krystal.
About the 99.3% match rate between their live trading and back testing results.
The biggest challenge for KFL Capital Management in today’s market.
About the challenge of attracting AUM in the modern financial landscape.
Asymmetry of agency and understanding how to focus on who you’re talking to.
Regarding the difficulties of explaining machine learning and big data ideas.
Commonalities in the highest level due diligence explorers.
Entrepreneurial perspective, great books and an open minded perspective on failures.
Why optimism is such a powerful force in today’s world.

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Resources & Links Mentioned in this Episode:

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Send your questions to info@toptradersunplugged.com

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Disclaimer

Transcript

Click on a timestamp to play from that location

0:00.0	I'm not sure.
0:04.0	I think that's what I would pass along.
0:06.0	I think this world we live in is quite magical.
0:11.0	I think the great deals go to the optimists because they're prone to paying more for them.
0:17.0	The great experiences go to the optimists because in life you probably find what you're looking for.
0:23.8	And the optimists tend to look for great things and expect great things.
0:28.5	If someone came to you and said that they had found a way to predict the future with more than 50% accuracy,
0:37.3	would you believe them? Would you be intrigued to learn more?
0:42.3	What would it take for you to be convinced that this could indeed be done? Big questions in a world
0:49.5	of big data, but in reality the answer should be, tell me more.
0:55.9	Since just because no other investment firm has claimed victory when it comes to predictive
1:02.7	power using machine intelligence to successfully trade the financial markets, we can't
1:09.5	really exclude the possibility of it having been done by a team
1:14.2	of scientists in Ontario, Canada. And that's what we're talking about in today's episode
1:20.5	of Top Traders Unplugged. Welcome back to Top Traders Unplugged, where the best traders in the
1:27.1	world come to share their experiences, their successes, and their failures.
1:31.4	Let's rejoin the conversation with your host, veteran hedge fund manager, Niels Kastrop Larson.
1:49.7	And that's, I think, is quite valid and quite interesting. If you were to mention a couple of names, you know, people like QIM, you know, the Medallion
1:56.5	Fund, Jim Simon's Fund, are those the kind of people you would look at?
2:01.6	Yes, for sure. So QIM is a great example because they are still telling their story to the world.
2:11.6	They haven't just closed down. They don't need to talk about it. So when Q-Ox about it, they do certainly sound like they're in the same category.
2:21.1	Jaffray Woodruff, the principal of that firm, is a self-studied computer science data guy,
	...

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