We Study Billionaires - The Investor’s Podcast Network

TIP390: Quantitative Investing Tactics w/ Michael Gayed

Oct 24, 2021

Trey Lockerbie chats with Michael Gayed, a Portfolio Manager at Toroso Asset Management and award-winning author of the Lead Lag Report. They dive into fascinating quantitative investing tactics, discussing when to appropriately use leverage and its relationship with market volatility. Gayed highlights the intriguing correlation between gold and lumber as market indicators. He also shares insights on employing a tactical rotation strategy to potentially outperform the market, emphasizing the importance of data-driven decisions.

57:35

forum

Ask episode

web_stories

AI Snips

view_agenda

Chapters

menu_book

Books

auto_awesome

Transcript

info_circle

Episode notes

question_answer

ANECDOTE

Family History in Finance

Michael Gayed's father worked with Bob Farrell, known for "Farrell's 10 Rules."
His father predicted the 1987 market crash and wrote books on market analysis.

insights

INSIGHT

Contrarianism

True contrarianism involves betting against excessive certainty, not simply being negative.
Focus on what the crowd is sure about, as payouts are higher when betting against consensus.

insights

INSIGHT

Market Nuances

Many stocks haven't performed well since February 2021, making market dips feel worse.
Automatic investments into S&P-linked vehicles create concentrated risk and nervousness.

Get the Snipd Podcast app to discover more snips from this episode

Investing Against the Grain

03:42 • 13min

chevron_right

Simplicity in Trading Strategies: Avoiding Complexity

16:21 • 5min

chevron_right

Understanding Leverage and Volatility in Investing

21:09 • 3min

chevron_right

Navigating Market Dynamics: Lumber, Gold, and Utilities

23:48 • 23min

chevron_right

Understanding Mean Reversion and Diversifying with Gold

46:20 • 5min

chevron_right

Navigating Investment Strategies: Mutual Funds vs. ETFs

50:59 • 8min

chevron_right

Exploring Simplicity in Quantitative Investing

59:00 • 2min

chevron_right

Antifragile

Things That Gain from Disorder

Nassim Nicholas Taleb

Albino Santos Mosquera

Genís Sánchez Barberán

In 'Antifragile', Nassim Nicholas Taleb delves into the concept of antifragility, arguing that some systems not only withstand stress and disorder but actually benefit from them. The book builds on ideas from his previous works, such as 'Fooled by Randomness' and 'The Black Swan', and is part of his five-volume philosophical treatise on uncertainty, 'Incerto'. Taleb provides examples from various fields, including science, economics, and history, to illustrate how antifragility can be achieved and how it contrasts with fragility and robustness. He also discusses strategies like the barbell strategy and optionality, and critiques modern society's attempts to eliminate volatility, which he believes are harmful. The book is praised for its revolutionary ideas and multidisciplinary approach, though it has also received criticism for its style and some of the author's views on mental health and other topics.

The Age of Turbulence

Adventures in a New World

Alan Greenspan

The book is divided into three main parts. The first part is an autobiography, detailing Greenspan's life, his early days in New York, his love of music, and his development as an economic analyst and political entrepreneur. The second part reviews the economic development of key regions such as China, India, Russia, and Latin America. The final part focuses on 'big themes' including education, demographic changes, corporate governance, and energy, while also projecting future economic trends and challenges. Greenspan reflects on major economic events, including the fall of the Berlin Wall, the internet and real estate bubbles, and 9/11, providing a comprehensive view of the global capitalist economy and its evolving nature.

The Black Swan

The Impact of the Highly Improbable

Nassim Nicholas Taleb

David Chandler

Nassim Taleb

The Black Swan is a landmark book by Nassim Nicholas Taleb that investigates the phenomenon of highly improbable events with massive impacts. These events, termed Black Swans, are unpredictable, have a significant impact, and are rationalized after the fact to appear less random. Taleb argues that humans are hardwired to focus on specifics rather than generalities, leading to a failure to consider what we don’t know. The book delves into cognitive biases, the limitations of mathematical models, and the importance of robustness and antifragility in navigating a world filled with uncertainty. The second edition includes a new essay, 'On Robustness and Fragility,' offering tools to navigate and exploit a Black Swan world.

Trey Lockerbie sits down with Michael Gayed. Michael is the Portfolio Manager at Toroso Asset Management and Writer of the Lead Lag Report. Michael’s white papers have won multiple awards, including the Charles H. Dow Award in 2016. Trey and Michael discussed a lot of quantitative tactics that we don’t often explore on the show. So without further ado, please enjoy this episode with Michael Gayed.

IN THIS EPISODE, YOU’LL LEARN:

21:41 - When to use leverage and when not to.
24:16 - The interesting correlation between gold and lumber and how to use it as a key indicator.
28:31 - How a highly active tactical rotation approach can beat the market.
And a whole lot more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Lead Lag's Report Website.
Michael Gayed's Twitter.
Trey Lockerbie's Twitter.
Read the 9 Key Steps to Effective Personal Financial Management.

NEW TO THE SHOW?

Check out our We Study Billionaires Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.

SPONSORS

Support our free podcast by supporting our sponsors:

Bluehost
Fintool
PrizePicks
Vanta
Onramp
SimpleMining
Fundrise
TurboTax

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Learn more about your ad choices. Visit megaphone.fm/adchoices

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Home Top podcasts Popular guests