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Animal Spirits Podcast

Talk Your Book: Compounding Machine

Oct 2, 2023
Eric Crittenden, CIO of Standpoint Asset Management, discusses trend following, understanding investor needs vs. wants, benefits of mutual fund wrapper vs. ETF, and the performance and drawdown numbers of an all-weather portfolio.
37:24

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Trend following involves tracking diversified assets with long positions in rising markets and short positions in falling markets, collecting risk premiums from hedgers who use futures markets.
  • An all-weather portfolio combines managed futures, global equities, and treasury bills to provide stability, diversification, and risk management for long-term investors seeking a compounding machine.

Deep dives

Trend following and all-weather investing strategy

The podcast episode discusses systematic trend following and all-weather investing strategy. The guest, Eric Quintetton, shares his background and experience in the field, highlighting the benefits of trend following and the importance of having a systematic approach to investing. He explains that trend following involves tracking a diversified basket of uncorrelated assets and making sure to hold long positions in rising markets and short positions in falling markets. Quintetton also emphasizes the value of the risk premiums that trend followers collect from hedgers who use futures markets as insurance. Moreover, he introduces the concept of all-weather portfolios, which combine managed futures, global equities, and treasury bills to provide stability, diversification, and risk management to investors.

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