Speculating on the Collapse of the System with Ben Hunt

On todays episode of the WTFinance Podcast I had the pleasure of speaking with Ben Hunt, the creator of Epsilon Theory and inspiration behind Second Foundation Partners, which he co-founded with Rusty Guinn in June 2018.

On the podcast we talked about the philosophy behind Epsilon Theory, why investors ignore error, advice Ben received throughout his investment career and greatest investment you can make. I hope you enjoy!

0:00 - Introduction
0:23 - “Burn it the F*ck Down”
2:00 - Why?
4:20 - What is the philosophy behind Epsilon Theory?
8:10 - Why do investors ignore the error/epsilon ?
13:14 - The influence of narratives on markets
20:05 - Do most people see through the narratives?
25:20 - Issues predicting the collapse of the system
26:57 - Systems evolve or adapt
30:45 - Advice Ben received early in his investing career
33:50 - It is not about being right, it is about making money
34:56 - Growth in wealth vs growth in economy
38:25 - Did Paul Volcker take too much credit for drop in inflation?
39:45 - Why demographic explanations are wanting?
41:55 - What does the increase fiscal and monetary support mean for the economy and markets?
46:20 - How has Ben positioned his portfolio?
50:13 - Message to take away from the interview?

Ben Hunt is the creator of Epsilon Theory and inspiration behind Second Foundation Partners, which he co-founded with Rusty Guinn in June 2018.

Epsilon Theory, Second Foundation’s principal publishing brand, is a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators across 180 countries read Epsilon Theory for its fresh perspective and novel insights into market dynamics. As Chief Investment Officer, Ben bears primary responsibility for determining the Company’s investment views and positioning of model portfolios. He is also the primary author of materials distributed through Epsilon Theory.

Ben taught political science for 10 years: at New York University from 1991 until 1997 and (with tenure) at Southern Methodist University from 1997 until 2000. He also wrote two academic books: Getting to War (Univ. of Michigan Press, 1997) and Policy and Party Competition (Routledge, 1992), which he co-authored with Michael Laver. Ben is the founder of two technology companies and the co-founder of SmartEquip, Inc., a software company for the construction equipment industry that provides intelligent schematics and parts diagrams to facilitate e-commerce in spare parts.

He began his investment career in 2003, first in venture capital and subsequently on two long/short equity hedge funds. He worked at Iridian Asset Management from 2006 until 2011 and TIG Advisors from 2012 until 2013. He joined Rusty at Salient in 2013, where he combined his background as a portfolio manager, risk manager, and entrepreneur with academic experience in game theory and econometrics to work with Salient’s own portfolio managers and its financial advisor clients to improve client outcomes.

Ben Hunt - 

Epsilon Theory - https://www.epsilontheory.com/
Twitter - https://twitter.com/EpsilonTheory
LinkedIn - https://www.linkedin.com/in/bhunt/

WTFinance -

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