Top Traders Unplugged

SI279: Prepare for a Bumpy Landing ft. Katy Kaminski

Jan 20, 2024

In this episode, Katy Kaminski discusses momentum trading versus trend following, identifying convergent patterns, and her perspective on the 2023 economic transition. The hosts also touch on the Danish monarchy, industry performance, and the changing correlation between stocks and bonds.

58:46

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Episode guests

Katy Kaminski

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Episode notes

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Quick takeaways

Understanding the philosophy of a trading strategy is crucial for successful momentum trading.

Be prepared for a potentially turbulent economic transition rather than a smooth one.

Pure trend-following strategies tend to perform best during periods of uncertainty and dislocation in financial markets.

Deep dives

The challenges of the fixed income trade and the potential for a stabilization of the yield curve

The author discusses the trend of shorting fixed income and the challenges it presents. They highlight that short-term trends in fixed income have been generally negative but there may be a shift towards long-term trends as the yield curve stabilizes.

Introduction

2min

Danish Monarchy and Market Speculation

7min

Difference Between Momentum and Trend Following in Trading

23min

Observations and Themes from 2023

15min

Factors Driving Signals and the Impact of an Inverted Yield Curve

2min

Examining the Changing Correlation Between Stocks and Bonds, Questioning the Safety of Bonds, and Expecting a Bumpy Landing in the Market

4min

Speculations on Inflation, Data Signals, and Commodities

2min

Trading Behavior, Market Flexibility, and Calls-to-Action

3min

In this episode, I'm joined by Katy Kaminski, who delves into the nuances distinguishing momentum trading from trend following, emphasizing the importance of comprehending the underlying philosophy of a trading strategy. Katy sheds light on the concept of 'pure trend' and offers insights on identifying convergent patterns within a trend following approach. We also reflect on the peculiarities of 2023, with Katy sharing her perspective on why we might be entering 'the final phase' and her expectations of a "bumpy" rather than smooth or abrupt economic transition, among other insightful topics.

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Episode TimeStamps:

00:52 - A funny story from Katy

02:34 - An important shout-out

03:42 - A rare event in Denmark

06:55 - Industry performance update

08:10 - Thoughts on 2024 so far

09:42 - The difference between momentum and trend following

13:53 - Convergent vs. divergent strategies

24:08 - What does "pure trend" mean to Katy?

28:03 - What makes you a pure trend follower?

32:53 - Looking back at 2023

37:48 - An unusual year

43:22 - Discussing Katy's paper on fixed income

47:43 - How were trend models positioned in the 1960's?

51:11 - What does your position mean?

54:40 - Next big bull market in commodities?

56:10 - Thanks for listening

Resources discussed in this Episode:

LINK 279: From Bears to Bulls?

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