Guest Jerry Parker, founder of Chesapeake Capital, discusses his trend following approach, problems with the 60-40 portfolio, building a trend following strategy, charitable giving, leaving money to children, and more.
One key takeaway from the podcast is the significance of implementing a rules-based approach in investing, which helps in minimizing emotional decision-making and maintaining consistency in investment strategies.
The speaker highlights the importance of continually increasing wealth and investing in new ideas and products to generate additional income while also preserving wealth for long-term financial success.
The speaker expresses a keen interest in remaining active in the investment industry, fueled by their passion for staying informed, discussing financial decisions, and being part of the trading and trend-following community.
Deep dives
The Importance of Following a Rules-Based Approach to Investing
One key takeaway from the podcast is the significance of implementing a rules-based approach in investing. Having a clear set of rules helps to minimize emotional decision-making and allows for consistency in investment strategies. The speaker emphasizes the importance of developing these rules and adhering to them to achieve long-term success and avoid making impulsive investment decisions.
Balancing the Desire for Wealth Preservation and Growth
The speaker discusses their personal investment goals of preserving wealth and continually increasing it. They emphasize the pride and ego associated with wanting to continually move forward and increase wealth. While preserving wealth is important, the speaker also highlights the need to invest in new ideas and products to generate additional income and support their goals for financial success.
The Desire to Stay Active and Engaged in the Investment Industry
The speaker expresses a keen interest in remaining active in the investment industry, stating that they cannot imagine retiring and not being involved in trading and managing their portfolio. They mention their passion for staying informed, discussing financial decisions, and being part of the trading and trend-following community. While they acknowledge the potential for a change in mentality or circumstances, they currently find great satisfaction and enjoyment in their work.
The Flaws of Traditional Stock and Bond Portfolios
The podcast delves into the weaknesses of traditional stock and bond portfolios, highlighting their long-only nature and lack of diversification. The speaker suggests that the reliance on stocks and bonds alone can limit potential gains and overlook opportunities in other markets such as currencies and commodities. They emphasize the importance of incorporating shorts, different markets, and trend-following strategies to promote diversification, manage risk, and achieve better risk-adjusted returns.
The Benefits and Considerations of Real Estate Investments
The speaker shares their personal experience with real estate investments, noting that while they provide enjoyable experiences and opportunities for family time, they also come with challenges such as real estate taxes, upkeep, insurance, and lack of liquidity. They highlight the importance of careful planning, awareness of the costs of ownership, and the consideration of alternative investment opportunities. They reflect on the potential concerns related to real estate's lack of liquidity and the difficulties of taking small losses compared to trend-following strategies.
In this episode we speak with Chesapeake Capital founder Jerry Parker about how he manages his personal portfolio. We discuss Jerry's trend following based approach and how he uses it to construct a portfolio that balances risk and return. We also discuss the problems with the 60-40 portfolio, the details of building a trend following strategy, charitable giving, leaving money to children and a lot more.
