The Outlier Trading Podcast Momentum Masterclass with Wes Grey | The Outlier Podcast
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Sep 3, 2025 Wes Grey, the Founder of Alpha Architect and an authority on momentum investing, shares his insights on the power of momentum systems. He emphasizes that blending momentum with valuation diminishes its effectiveness and stresses the importance of simplicity in research. Wes discusses how adaptive weighting can enhance momentum strategies, while cautioning against noise from short-term trades. He also advises retail traders on leveraging their agility in the momentum space and highlights the ongoing relevance of momentum even as market dynamics evolve.
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Keep Momentum Pure
- Momentum and value are separate religions and mixing them often ruins momentum's returns and correlation benefits.
- For pure momentum, focus solely on price-driven momentum signals and avoid blending in valuation or quality filters.
Momentum Is A Behavioral Factor
- Momentum is fundamentally behavioral and tied to investor actions, so its academic structure hasn't changed much over decades.
- High-frequency or intraday implementations may differ, but intermediate momentum remains behavior-driven.
Use Momentum-Based Risk Controls
- Use momentum-derived rules like trailing stops and trend filters to improve execution without adding fundamental overlays.
- Avoid adding valuation or quality metrics directly into momentum signals because they typically degrade performance.