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Resolve Riffs Investment Podcast

Latest episodes

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Mar 30, 2021 • 1h 2min

Black Swans and Gray Rhinos with Michele Wucker

In this episode, we are joined by Michele Wucker, author of the international bestseller “The Gray Rhino” and the new book “You Are What You Risk”. She coined the term “gray rhino” for obvious, probable, impactful risks, which we are surprisingly likely but not condemned to neglect. The gray rhino has moved markets, influenced central banks, guided risk managers and business strategy, and made headlines as an important frame for the ignored warnings that let the Covid-19 pandemic get out of control. The metaphor was inspired by work early in her career when she sounded a warning about Argentina’s debt crisis, then reprised that warning with an early and successful argument for a pre-emptive haircut in the Greek debt crisis. She is founder of the Chicago-based strategy firm Gray Rhino & Company, speaks frequently to high-level global audiences, and is cited often in leading global media which recently have included The Wall Street Journal, The Economist, and the Washington Post.   We discussed: Five reasons decision-makers have for not addressing problems Making the “devil’s advocate” more prominent in the decision-making process Individual biases and how they define your “risk fingerprint” The “risk compass” and how it can help manage client risk tolerance The “Glass Cliff Phenomenon” and corporate crises The balance of left tail and right tail risk in group/family dynamics Thinking less deterministically and more probabilistically to get better outcomes Little “hacks” to help manage risk   Michele also shared real-life anecdotes of how using these methods have helped corporations/boards and families manage risk tolerance differences. She stresses repeatedly the usefulness of knowing the “risk fingerprint” of every member of the group, leading to significantly better outcomes.   We hope you enjoy this far-reaching and entertaining discussion. 
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Mar 23, 2021 • 2h 13min

ReSolve Riffs 0n the Crypto Melting Pot & Energy Consumption with Greg Foss and Magdalena Gronowska

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day.   Interest in cryptoassets, and specifically Bitcoin, has skyrocketed in the last few years. From it’s humble beginnings Bitcoin has grown into a behemoth, leading some to wonder if it will eventually become a contender for the role of global reserve currency. Our guests for this episode were Greg Foss and Magdalena Gronowska, early adopters of Bitcoin and part of the team that launched the very first Canadian crypto ETF on the Toronto Stock Exchange. Our conversation covered:   How the bond market wags the equity tail Why Bitcoin can become default protection on a basket of sovereign credit as national debts explode What Bitcoin is currently disrupting, from energy usage to gold, from the FED to the banking system What is money The “Honey Pot” Why now is a better time to invest in Bitcoin than 2016 Spinoffs from Bitcoin mining, from energy to technology The solution for “Fiat Ponzi”   The discussion was enthusiastic, thorough and sometimes downright funny. We hope you enjoy this episode and look forward to you joining us again next week.
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Mar 16, 2021 • 1h 35min

ReSolve Riffs on Hedging Inflation with Optimal Commodity Portfolios to Maximize Diversity & Growth

This is ReSolve Riffs – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day.   As governments in the U.S, Europe, Japan and elsewhere embrace aggressive fiscal stimulus measures in the wake of the global Coronavirus pandemic, investors are growing concerned that this may unleash a sustained inflationary impulse. As investors dust off their inflationary market playbooks, many are realizing portfolios may need to be significantly restructured.   This week ReSolve’s own Portfolio Managers, Mike, Rodrigo, Richard and Adam, wrestle with the underlying macro dynamics that might pave the way for inflation, and discuss how to position portfolios to manage these risks. In particular, the team focuses on how commodities are designed to preserve real wealth in inflationary environments, and how to build optimal commodity portfolios to address these risks:   The many paths to inflation, and the role of MMT and debt monetization Importance of diversity and balance (or heterogeneity) in the design of commodity portfolios Why existing commodity indices and products are designed for capacity, but sacrifice heterogeneity and balance How optimal commodity portfolios may be expected to deliver a rebalancing premium to rival the equity risk premium, duration premium, and credit risk premium   This jovial discussion complements the whitepaper, “Optimal Commodities” and listeners are encouraged to download and read the paper as well.   Thank you for watching and listening. See you next week.  
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Mar 9, 2021 • 1h 33min

ReSolve Riffs: Macro with Julian Brigden, on Inflation, Bubbles and the Dollar (EP.67)

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day. In 1971, US president Nixon suspended the convertibility of the dollar to gold bullion, terminating what was known as the Bretton Woods system, which also kept other major currencies pegged to the greenback at a fixed exchange rate. Since then, the US dollar has experienced three major cycles of appreciation followed by weakening, all of which have greatly impacted asset prices around the world. Our guest this week is Julian Brigden (‎Co-Founder & President: ‎Macro Intelligence 2 Partners), a macro strategist who is particularly focused on secular USD trend and their ramifications across global markets. Our conversation included: His general framework, favorite macroeconomic indicators and putting the pieces together Why the ISM is a fantastic metric to gauge activity (Portfolio) size matters – tactical vs strategic calls Parallels with the 1960s, financial repression and how this may impact the US dollar Central banks’ independence in check, and the growing role of fiscal policies Inflation – expectations of the coming commodity bonanza and knock-on effects across the globe Rates, bubbles and the outlook for equities Gold vs silver vs copper – portfolio hedges under secular inflation We also discussed liquidity crunches, the role of the Fed, the wealth gap and alternative paths to overcoming the current enormous debt overhang. As long-time followers of Julian’s work, we had been looking forward to this episode for some time, and it exceeded our expectations. Thank you for watching and listening. See you next week.
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Mar 2, 2021 • 1h 52min

ReSolve Riffs with Eric Balchunas: Crypto, Active ETFs, ARK Insanity, and the Beta Vortex

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day. Almost three decades since the very first launch, Exchange Traded Funds (ETFs) have grown to a multi-trillion-dollar segment of the market, with more than seven thousand spread across the world. The US market is home to approximately 30 percent of them, spanning the passive/index-tracking, actively managed and thematic categories, not to mention a handful of more exoteric niches. We drew on the expertise of our friend Eric Balchunas (Senior ETF Analyst at Bloomberg) for an update on the current state of the ETF. We discussed: The hottest tickets in town – the ARK family and Cathie Wood Soap opera drama – why haven’t crypto ETFs been allowed yet Why thematic ETFs are actually a closet-momentum play Value as the most intuitive factor – emulating Graham’s ‘Intelligent investor’ The Beta Vortex, how passive distorts price discovery Biases and the narrowing gap between institutional and retail investors The answer to 99 out of 100 questions in markets – blame it on the Fed Eric also gave us the breakdown in AUM for each segment of the market, as well as his estimate for the current size of the entire passive investment complex. This was a wide-ranging and very entertaining conversation, with great input from the audience (especially from our friends Brian Portnoy and Dave Nadig – thanks guys), and we also learned there is such a thing as “conversational alpha”. Thank you for watching and listening. See you next week.
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Feb 26, 2021 • 2h 15min

Métodos cuantitativos para una cartera de inversión de 100 años

In this episode, Rodrigo Gordillo, Rafael Ortega and Ignacio Villalonga from Zona Quant discussed quantitative methods in Spanish.
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Feb 25, 2021 • 1h 27min

ReSolve Riffs on: Struggling Doesn't Make You Less of a Man; It Makes You Human, with Matt Zerker

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day. Over the last few years, the topic of mental health, once taboo, has been recognized as a crucial component of our general well-being. Yet depression, anxiety and other ailments of the mind remain largely a silent epidemic, and the last twelve months have been particularly hard because of the loneliness many have endured due to the lockdowns. Our guest this week was Matt Zerker, former Portfolio Manager at ReSolve and now Founder & CEO of tethr. Our conversation included: Matt’s life journey struggling with depression, losing a close friend, finding a support group and ultimately landing on a path towards his true calling No man is island – we all yearn to belong ABC – always be compassionate Resisting, suppressing, blocking – it’s much healthier to let go Why men find it harder to admit they are struggling, especially in finance Physiological responses, emotional interpretations and feedback loops How to shorten the reaction times of negative responses and build new (and more positive) neural paths We also discussed the role of psychedelics, Jason’s experience with Trading Tribe, and how to detach one’s ego from destructive narratives. This was a deeply personal conversation and a true homecoming for Matt, and we hope it can help to spread the word on the importance of mental health in our community. Thank you for watching and listening. See you next week.
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Feb 22, 2021 • 1h 45min

Mike Green: The Fourth Turning and Reimagining the American Dream

“I think there are a lot of people who feel a genuine frustration at how the system has behaved, and more importantly about how there has been this dynamic of privatized gains and socialised losses. The way I would resolve it is, you know that’s wrong. And yet it seems that the models or the tools that are being used give us no option to that. And at the core, what that’s telling you is that the models are a mistake…” Mike Green In this podcast, Mike Green and I discussed political philosophy. Well, I fumbled around trying to articulate my frustrations, objections and questions and Mike managed to read between the lines and carry the show. By way of background, I’ve been frustrated with a few things since the late 1990s. Most of my frustrations relate to how regulators, governments and central banks have repeatedly undermined the capitalist process of creative destruction by bailing out imprudent risk-takers. We got a taste of this in 1998 when the Fed bailed on LTCM, and a belly-full of it in 2008 when they changed the rules on mark-to-market accounting and bailed out the banking sector. Since then central banks have supported asset prices at every turn, with increasingly direct intervention, culminating in direct purchases of corporate credit in March of 2020. For the most part, Mike and I are frustrated about the same things: regulatory capture and a fundamental misalignment of political power and incentives, the compound effect of which is responsible for most of the forces that are tearing America apart from within. However, where my experience has festered and soured, Mike has been diagnosing the problems and seeking solutions. Viewed through the prism of Mike’s philosophical framework, our current situation is a function of decades of policy choices rooted in a misguided faith in Calvanist meritocracy, amplified by a fundamental misapprehension that goes to the very heart of economics. These themes converge as we explore: How treating the economy as an ergodic system inevitably leads to accelerating boom-bust dynamics How central bank policy is largely motivated by a policy choice that has placed the social safety net in the hands of the corporate sector Why a policy of offering guaranteed, non-dischargeable loans to children to pay for higher education is criminally irresponsible, and creates a cascade of corrupt signaling mechanisms and mal-incentives, with obscene repercussions MMT, the Kalecki equation and how policy can be structured to narrow the wealth gap Ergodicity economics, the Farmer’s Fable, and the myth of meritocracy The importance of the Fourth Turning as a time to dismantle corrupt institutions and rebuild in a new image Disentangling skill from luck, and designing a redistribution policy that socializes windfall gains to support distributed entrepreneurship and economic dynamism Creating a system of accounting that recognizes non-monetary contributions and externalities How citizens will think about taxes in a modern monetary world, and whether taxes have only ever been paid at the business end of a gun Whether we can move past the Fourth Turning without a major catalyst, what that catalyst might look like, and how to look across the chasm with optimism about the future This is a two-hour podcast, and I apologize in advance for meandering questions and the occasional non-sequitur. Still, this was a deeply important conversation, and I think it’s worth your time. I think many of us who think about the state of the world know that something is very wrong. Many of us have worked to bury these frustrations and work within the game and the rules as they are. But at root we are mostly checked out. Mike makes the case that the system is broken, but it can be fixed. And he expresses an incredibly coherent framework for a system of values, principles, and policies that just might work. I came away feeling almost hopeful. And I think some of you might too. “Contradictions do not exist. Whenever you think that you are facing a contradiction, check your premises. You will find that one of them is wrong.” Francisco d'Anconia, Atlas Shrugged      
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Feb 17, 2021 • 1h 33min

ReSolve Riffs all things Macro with Lyn Alden MMT YCC BTC

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day. This week we had the great pleasure of hosting none other than Lyn Alden (founder of Lyn Alden Investment Strategy), one of today’s most prominent macro strategists and thinkers. Her background in both engineering and economics endows her with a diverse skillset and unique perspective, which helps her (as well as her readers and clients) make sense of the extremely challenging environment investors are currently facing. This wide-ranging conversation covered topics that included: Her investment framework – the integration of top-down and bottom-up Japanification – the good, the bad, the ugly, and some unexpected diamonds in the rough in the Land of the Rising Sun The weaking US dollar, its multi-year cycles and global investment implications Currency wars, economic tradeoffs and game theory dynamics NASDAQ & Bitcoin – the unbeatable portfolio of late – recency bias, and why it always pays to be diversified in the long run Fiscal and monetary policies, both pre- and post-pandemic, and what an end game might look like Lyn also delved into her views on precious metals, possible inflationary outcomes and effective hedges, and of course, Bitcoin. Her ability to explain complex topics clearly and concisely was on full display, which made for a deeply enlightening and entertaining episode. Thank you for watching and listening. See you next week.
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Feb 10, 2021 • 56min

Razvan Remsing: Inside the Black Box at Aspect Capital

Today’s conversation is with Razvan Remsing, Director of Investment Solutions at Aspect Capital. Aspect is a multi-billion dollar London based systematic investment manager founded by one of the original founders of AHL. Razvan’s role is at the intersection of investment strategy research, product development, and client management, which positions him to comment on themes ranging from client engagement and communications through specific details about the underlying mechanics of Aspect’s strategies. We start by discussing the unique challenge of communicating with clients about what to expect with systematic strategies. Razvan emphasizes the importance of helping clients gain  intuition about what’s happening inside the “black box” so that they know generally what to expect in different market environments. Ideally, clients will be sufficiently informed about the strategy they’ve invested in so that they may be disappointed with results from time to time, but never surprised. The conversation then migrates to an exploration of what happened to Aspect’s strategies in 2020. Razvan observes that 2020 was especially interesting because we basically lived through a full market cycle in just one year (and arguably in the span of just a few weeks). He asserts that the defining factor for success or failure in 2020 was the speed of your strategy. Strategies with short forecast horizons and holding periods had the opportunity to successfully navigate the major reversals in the year, while slower moving strategies were at a major disadvantage. We also discussed the poor performance of liquid alternatives and especially the major Style Premia products over the past few years. Razvan is unpersuaded by the view that poor performance was due to overcrowding. Rather, he attributes poor performance to an over-emphasis on classical “value” and credit type strategies, which are low Sharpe strategies to begin with. Low Sharpe strategies should be expected to endure long painful drawdowns. The conversation also ranged into Machine Learning, the value of alternative data from capital flows, sentiment, options surface, and more esoteric sources, and how strategies informed by some of these series responded more quickly to the seismic shifts experienced in markets in 2020. Razvan shared some rare insights, for example into differences in trading and sizing exposures to commodities versus financials. This was definitely one of our more technical conversations, with the rewards you’d expect from the ability to go deep into topics with a true craftsman.

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