SI296: Is Trend Following Becoming Too Complicated? ft. Mark Rzepczynski

May 18, 2024

Financial expert Mark Rzepczynski discusses investor sentiment, trend following strategies, the impact of government policies on economies, and the complexity of being a systematic manager. He emphasizes the need to look beyond price, considers the drivers of price, and explores the VUCA framework. The conversation also touches on whether trend following is becoming too complicated.

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INSIGHT

False Consensus Effect

The false consensus effect is a behavioral bias where individuals assume everyone shares their opinions.
This can lead to market surprises when new information contradicts the consensus view.

ANECDOTE

Cryptocurrency Heist

Two MIT graduates allegedly stole $25 million in cryptocurrency in 12 seconds.
They exploited a vulnerability in Ethereum's transaction timing.

INSIGHT

Shift in Investor Interest

Investor interest has shifted towards fixed income relative value strategies.
This is due to increased interest rate volatility and higher overall rates.

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Mark Rzepczynski is back to discuss the latest investor sentiment survey from Societe Generale’s Capital Consulting team, to find out what strategies investors are losing interest in and which are seeing more demand right now. We also dig into how the performance of economies greatly depends on the type of government policies and how going from multilateralism to bilateralism impacts trend following, the complexity of being a systematic manager and the phalacy of consensus. Mark also explains why we need to look beyond price and consider the drivers of price, what the VUCA framework is and how/why to use it, whether trend following is becoming too complicated and much more.

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Episode TimeStamps:

00:39 - What has been on our radar recently?

06:59 - Which Alternative Strategies do Investors Want...latest survey?

12:17 - Discussing the data

18:30 - Industry performance update

21:26 - Is the rise of the Chinese stock market legit?

25:08 - From multilateralism to bilateralism

29:42 - The difference between the ideal vs. reality manager

36:31 - The fallacy of consensus

40:23 - Using economic data as a trend follower

43:14 - Is price truth?

47:38 - VUCA - what, why and how?

54:50 - Applying VUCA to trend following

57:46 - Is trend following becoming too complicated?

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