Animal Spirits Podcast Talk Your Book: Managing Risk Like an Actuary
7 snips
Feb 21, 2022 
Julian Koski, Chief Investment Officer and co-founder of New Age Alpha, discusses the innovative H-Factor scoring system for evaluating individual stocks. He emphasizes the importance of risk management, especially in volatile markets. The conversation delves into analyzing company performance against historical trends rather than just market noise, using examples like Cisco and Tesla. Koski also explores strategies for optimizing investment portfolios through the H-Factor, highlighting the need for clear data over emotional trading.
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H-Factor Insight
- The H-Factor measures vague and ambiguous information's influence on stock prices.
- High H-Factor stocks indicate more human 'gambling' and should be avoided.
Tesla's H-Factor
- Michael Batnick expected Tesla's H-Factor to be high due to implied growth rates and options activity.
- Julian Koski reveals Tesla's H-Factor is low, indicating delivered growth.
H-Factor Math
- Julian Koski emphasizes that the H-Factor uses simple math, focusing on stock price and financial statements.
- It calculates implied growth rate and compares it to past performance, unlike models influenced by human behavior.