Flirting with Models Clayton Gillespie - A Fundamental View of Quant Equity (S7E5)
82 snips
Feb 5, 2024 Clayton Gillespie, VP at Deutsche Bank, talks about reconciling quant and fundamental perspectives in investing, incorporating survey insights into strategies, understanding regime changes, trade-offs between fundamental and statistical factors, managing risk and improving alpha signals, sticking with the factor premium, and the intersection of philanthropy and quantitative analysis.
AI Snips
Chapters
Transcript
Episode notes
Fundamental Background
- Clayton Gillespie started in fundamental research, analyzing financial statements.
- This experience shaped his view on integrating fundamentals into quant strategies.
Growth Stocks and Expected Returns
- High-multiple growth stocks, like Amazon, can be viewed as having low expected returns, similar to low-yield bonds.
- Their high valuations imply low future return expectations, despite potential volatility.
Profitability and Cost of Capital
- As companies like Amazon mature and become more profitable, their cost of capital increases.
- This is because their growth potential diminishes, similar to selling a covered call.