Podshops, Prices, and Physical Flows: A Commodity Trading Framework with Stephane Bernhard of CAM/ETG
The Derivative
Strategic Dynamics in Commodity Trading and Investment
This chapter delves into the dynamics of soft commodities, focusing on how investment and technology contribute to yield increases. It examines the motives of diversified groups in commodity trading and the importance of analytics in optimizing returns and managing risks.
In this episode, we dive deep into the world of commodity trading with Stephane Bernhard, CEO/CIO of CAM Multi-Strat Asset Management. Drawing from his 30+ years of experience starting at Louis Dreyfus through commodity trading house ETG, Stephane shares how commodity trading has evolved from pure fundamental analysis to today's complex intersection of physical, financial, and systematic trading.
The conversation explores the world of commodity houses and physical trading of commodities, before diving into CAM's unique approach to building a commodity-focused multi-strategy fund that bridges physical and financial markets. Stephane details their innovative risk management framework that gives commodity traders more flexibility than traditional pod shops while maintaining portfolio stability. You'll hear why VAR doesn't work for commodity risk management and how they've developed an anti-fragile approach to drawdown management.
Throughout the discussion, Stephane weaves in fascinating historical perspective - from his early days in the Madrid sovereign debt crisis to parallels between the end of Bretton Woods and today's shifting monetary landscape. Whether you're interested in commodity markets, multi-strategy fund construction, or the intersection of physical and financial trading, this episode offers unique insights into an increasingly important corner of the investment world – SEND IT!
00:00-01:06 = Intro
01:07-13:42 = Commodity Trading Houses: Bridging Time and Risk in Global Commodity Markets at Louis Dreyfuss and ETG
13:43-29:50 = Commodity Trading Dynamics: Navigating Physical Footprints, Basis Risk, and Market Complexity
29:51-40:51 = Constructing a Multi-Strategy Commodity Trading Platform: Exploring ETG's Strategic Vision
40:52-53:29= Commodity Market Dynamics: Weather, Volatility, and Global Supply Chains
53:30-01:13:51 = Risk Management and Trader Psychology: Mastering the Art of Commodity Trading
01:13:52-01:18:50 = Trading Psychology and Market Excitement: Navigating High-Stress Moments
01:18:51-01:29:34 = Lessons from the 1971 Gold Standard: Adapting to Historical Market Shifts
From the episode: The Secret Club That Runs the World
Follow along with Stephane on X @TCS_Trader and LinkedIn, and be sure to check out ETG and CAM on LinkedIn as well for more information!
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Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visitwww.rcmalternatives.com/disclaimer
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