SI143: How Decentralised Is Bitcoin? ft. Eric Crittenden
Top Traders Unplugged
Insights on Portfolio Construction and the 60 40 Portfolio
The speaker reflects on the performance of the 60 40 portfolio over the past century, addressing its strengths and weaknesses. They emphasize the need to understand historical trends and caution against overvalued assets in the current market.
Special guest Eric Crittenden returns to the show today to discuss the fallacies of the typical 60/40 portfolio, the Federal Reserve’s recent decision to begin tightening fiscal policy, Eric’s last appearance on the show which was at the March 2020 stock market bottom, different speeds of Trend Following, why stable returns doesn’t always equate to low risk, the difficulty in being comfortable with doing the opposite of what we’re wired to do, how managed futures can help investor’s portfolios, negative interest rates and flight out of fixed income, what could Trend Following bring to the crypto space, and changing the narrative around Trend Following.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In this episode, we discuss:
- The misconceptions around the safety & profitability of a typical 60/40 portfolio
- The recent Federal Reserve decision to tighten fiscal policy
- Eric's last appearance on the show, which was at the exact bottom of the 2020 market crash
- The varying speeds of Trend Following
- Why low-volatility returns may not mean that a strategy isn't risky
- Overcoming behavioural biases
- Managed futures as a great benefit to investor's portfolios
- The flight out of fixed income
- Why crypto investors could benefit from Trend Following
- Changing the narrative around Trend Following
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Episode TimeStamps:
00:00 - Intro
01:59 - Macro recap from Niels
03:22 - Weekly review of returns
10:41 - What could Trend Following bring to the crypto space?
16:36 - How can CTAs change the narrative around investing so that they are included in the picture at all times, instead of just when investors are panicking?
24:50 - Q1; Leonie: What goals can I set as an independent Trend Following trader?
30:13 - Q2, Q3 & Q4; James: How do you size positions across different speeds of systems? How much in percentage terms should a retail investor allocate to Trend Following strategies? Can you recommend a CTA comparison website?
33:16 - Q5; Jacob & Sam: Can Bitcoin futures be traded safely even though you can’t trade them over the weekend?
36:30 - Trend Following reframed for better understanding
48:04 - Trend Following misunderstood
59:48 - Why Trend Following on only a single asset class often leads to failure
01:04:17 - Economic and social similarities between today and the 1960s
01:07:37 - The fallacies of the typical 60/40 portfolio
01:16:54 - How managed futures can help portfolios
01:23:16 - Benchmark performance update
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