SI317: From Hurricanes to Hedge Strategies: The Hidden Common Factors ft. Richard Brennan

This episode dives deep into the intricacies of trend following strategies and their connection to complex adaptive systems. Richard Brennan and Niels Kaastrup-Larsen explore how these systems respond to market signals and the importance of boundaries in shaping investor behavior. They discuss the challenges faced by trend followers in the current market environment, particularly in October, where many strategies have encountered difficulties. The conversation touches on significant topics such as risk management, diversification, and the role of outliers in financial markets, emphasizing that these seemingly anomalous events are actually a natural part of the market's fabric. With insights drawn from recent literature, including works by John Holland and Jeffrey West, the episode highlights the necessity of adapting to evolving market signals and the dynamic interplay between agents within these complex systems.-----EXCEPTIONAL RESOURCE: Find Out How to Build a Safer & Better Performing Portfolio using this FREE NEW Portfolio Builder Tool-----Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend Barometer here.Send your questions to [email protected] please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.Follow Rich on Twitter.Episode TimeStamps:00:40 - Our thoughts go to Florida03:39 - A rough time for trend following08:39 - Industry performance update12:14 - Q1, Shahar: Regarding using long only trend following as an overlay to broad market ETFs23:38 - Applying Warren Buffett's philosophy to trend following32:33 - Setting limits in your trade following strategy40:47 - What complex adaptive system can teach us about trend following01:06:22 - What is up for next week?Copyright © 2024 – CMC AG – All Rights...