TTU82: Simplicity vs. Complexity in Trading Models ft. Oliver Steinki of Evolutiqz – 2of2
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 8 June 2015
⏱️ 60 minutes
🧾️ Download transcript
Summary
In the second part of our conversation with the cofounder of Evolutiq, we dive into the firm’s trading strategy, how they manage risk, and what kinds of investors they seek. He also discusses tips for budding entrepreneurs and firm managers, and how he deals with explaining the complexity of his trading models.
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In This Episode, You’ll Learn:
- The details of Oliver’s portfolio.
- What types of markets have more success for their models.
- Their unique allocation process.
- How to explain these scientific terms to potential investors.
- The question of simplicity vs. complexity.
- How they managed intra-day forecasting.
- How he manages risk.
- The way that market correlations play into the portfolio.
- Oliver’s thoughts on drawdowns and the worst ones that he is expecting.
- How do you know when a model has stopped working.
- What Oliver’s experience has been as the world has become more divergent.
- What keeps him up at night.
- What he is looking at in his research for the firm right now.
- How models can start decaying.
- Who he is targeting for his firm.
- How he manages the cash portion of his accounts.
- How setting up a company outside the big financial center affects his business.
- What questions investors should be asking him during due diligence meetings.
- The advice he would give to aspiring managers.
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Resources & Links Mentioned in this Episode:
- Oliver recommends reading The Mathematics of Money Management.
- He also recommends Algorithmic Trading.
- Learn more about Harry Markowitz, mentioned in this episode.
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Transcript
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| 0:00.0 | I think it's being honest to other people and being curious. |
| 0:07.0 | Because when you're curious, you will find something, what's your passion? |
| 0:10.0 | And for me, that's really something nice. |
| 0:13.0 | What I have achieved with Evolution, it's basically my, I did the PhD out of passion for that subject. |
| 0:19.0 | And now out of passion for the subject, we are creating an investment management firm out of passion for that subject and now out of passion for the subject I'm we are creating |
| 0:22.6 | an investment management firm out of it which is something really great if you can follow your |
| 0:27.9 | passion because then it doesn't feel like working. I want to mention that today's podcast episode |
| 0:33.5 | is brought to you by the Eurox Exchange, which of course is the home of the European |
| 0:39.5 | yield curve. |
| 0:40.5 | Hi, this is Oliver Steinke, CEO and founder of Evolution and you're listening to TopTraders |
| 0:45.7 | Unplugged. |
| 0:46.7 | Welcome back to Top Traders Unplugged, where the best traders in the world come to share |
| 0:51.7 | their experiences, their successes, and their failures. |
| 0:55.1 | Let's rejoin the conversation with your host, veteran hedge fund manager, Niels Kastrop Larson. |
| 1:09.9 | And the process, regardless of what underlying it is, is the same, so to speak. |
| 1:17.2 | Okay. |
| 1:17.6 | Yeah. |
| 1:18.0 | So we always have the same investment process. |
| 1:21.6 | So in step one, we have the ensemble generation. |
| 1:26.0 | So we generate a lot of levy process based market models and step two |
| 1:30.5 | is always independent of the underlying the ensemble pruning so basically kicking out the bed ones |
| 1:36.5 | step three is the integration those which are left over how do you combine them to get one specific signal. |
... |
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