SI352: Trend Systems Under Strain ft. Nick Baltas

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Jun 14, 2025

Nick Baltas, a systematic investor, dives deep into the intersection of technology and trading challenges. He discusses the overwhelming influence of AI on data and signals, revealing how market reversals are complicating strategy design. The conversation highlights the struggle of adapting volatility targets while maintaining conviction amidst uncertainty. Baltas reflects on the performance of trend-following strategies during volatile markets and the constraints institutional investors face, urging a rethinking of traditional investment practices in an evolving landscape.

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INSIGHT

AI's Double-Edged Impact

The proliferation of AI-generated data creates both opportunities and challenges for systematic investing.
A key question is discerning valuable signals from overwhelming noise in investment data.

ANECDOTE

Global AI in Education Contrast

In China, AI tools were disabled during university entry exams to prevent misuse.
Conversely, UAE plans to grant free ChatGPT+ access, highlighting varied global approaches to AI in education.

INSIGHT

V-Shaped Reversals Challenge Trends

Market V-shaped reversals deliver two consecutive hits to trend followers.
This pattern challenges the effectiveness of rapid trend-following strategies during volatile regime shifts.

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Nick Baltas is back with Niels for a conversation that sits at the intersection of technology, uncertainty, and discipline. As AI-generated data floods the system and market reversals grow sharper, the challenge isn’t just strategy design — it’s deciding what still counts as signal. They explore how systematic managers are rethinking volatility targets, why certain constraints persist in institutional portfolios, and what recent underperformance may actually be revealing. This episode is less about solutions than about orientation: how to stay aligned when the tools evolve faster than the terrain, and when conviction must coexist with doubt.

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Episode TimeStamps:

00:01 - Introduction to Systematic Investing

02:11 - The Impact of AI and Machine Learning on Data Analysis

07:05 - The Impact of AI on Education and Examination Policies

12:06 - Transitioning Perspectives on Democracy and Markets

21:49 - Dynamic Volatility Targeting in Portfolio Management

24:24 - Exploring Volatility and Leverage

29:50 - Understanding Investor Behavior and Market Dynamics

36:29 - Exploring Investment Constraints and Strategies

45:04 - Rethinking Investment Constraints

49:36 - Strategic Allocations and Market Timing

56:11 - Market Dynamics and Trend Following

01:00:09 - The Evolution of Systematic Investing

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