Resolve Riffs Investment Podcast

This is “ReSolve’s Riffs” – live on Youtube every Friday afternoon to debate the most relevant investment topics of the day. We were joined this week by our friends Wes Gray (Alpha Architect) and Tobias Carlisle (Acquirers Funds) to discuss value investing, its prolonged winter and how it has fared in the current environment. This broad conversation includes: How value has historically outperformed growth, despite appearing to lag most of the time The mental – and emotional – fortitude required to stick with it during tough periods Active share – disaggregating value from broad equity beta Difference between harvesting Value in Long-Only vs Long-Short strategies Raw yields vs Excess yields Separating Value from Quality The group also compared different value metrics against portfolio turnover and capacity, their relative cheapness with respect to the market as well as versus themselves over time. Please enjoy this episode and join us live next week!

In this wide-ranging discussion, Logica's Mike Green describes a mosaic of ways to "seek out a straddle", and reveals new data and analysis to help flesh-out his thesis on the growing importance of systematic passive flows to U.S. stocks. Mike makes a persuasive and disturbing case for how a series of regulatory changes driven by economic and political objectives have corrupted the equilibrium and signaling mechanisms of modern markets, and offers a framework, with specific examples, on how to position for a market environment that few currently expect. Adam challenges Mike on a number of conjectures but Mike rises to the occasion with novel analysis and counter-intuitive interpretations bolstered by a variety of charts, tables, and illustrations. Trust us – this episode will challenge almost everyone's beliefs and is not to be missed.

This is “ReSolve’s Riffs” – live on Youtube every Friday afternoon to debate the most relevant investment topics of the day. On our second episode, we invited our good friend Corey Hoffstein (Newfound Research) to analyze the roller-coaster experienced by equity investors in the past 3 months and discussed: the disconnect between the equity rally and the pain in the broader economy the companies and sectors that have led the charge how Trend signals in equities have evolved in the recent period how investors might position themselves going forward We also address the big question in most investors’ minds: should they jump back into the stock market and avoid additional FOMO or take this second chance to embrace a more diversified and adaptive approach? Watch – or listen – below and join us live next Friday!

Join us for our inaugural episode of the “ReSolve Riffs” series where the team will go live on Youtube every Friday at 3pm over cocktails to discuss topics that are in the immediate zeitgeist of the investment world. In this episode we cover the very heated tail protection debate. The team discusses the challenges with different types of tail protection implementations including: the difficulty in sourcing the right strategy the challenges of different fund structures, whether diversification alone is enough to manage tail risk and, the benefits of tail ensembles. We also cover the behavioural challenges at all levels of investor sophistication that make it so difficult to stick with tail protection as a strategic long-term allocation, and make a case for the type of investor that might benefit from these approaches. We hope you enjoy the episode and that you’ll join us to riff live with the team!

The podcast discusses the impact of COVID-19 on portfolio construction and strategy, the challenges of predicting economic outcomes, the importance of diversification and asset class performance, analyzing market volatility, the implications of maintaining exposure to risk without de-risking, the consequences of not reducing risk and attempting to time the market bottom, the implications of the equity risk premium, valuations, and retirement challenges, exploring benefits of defined benefit pension plans and asset allocation in extreme markets.

The idea that mainstream media could, to some degree, pursue the agenda of powerful groups might have been dismissed as conspiracy theory in the past. But over the years much has changed in how we perceive and interpret the flood of news and data-bits that compete for our attention each day, forcing us to seek out ways to distill the noise in search of something closer to the truth. Gestalt University’s latest guest has emerged as one of these trusted sources. His Epsilon Theory portal is one of the most respected and widely read information outlets in financial media. A prolific writer with a background in applied statistics and game theory, his acute understanding of history and behavioral analysis have equipped him the right tools to shed light onto the real forces that guide The Narrative Machine. He is, of course, Dr Ben Hunt. A departure from our usual conversations, Adam, Rodrigo and Ben discuss how information is shaped, delivered, and ultimately drives the narrative that underpins capital markets and the global zeitgeist. They discuss how this has led the current political and financial climate to deviate from the dominant paradigm of recent decades, and how this affects portfolios and risk management. Please enjoy our latest episode with Ben Hunt.

This episode of Gestalt University could not be timelier, having been recorded two weeks prior to the current market correction that began in late February 2020. The discussion of fragile versus robust approaches is especially important given how recent volatility has led simpler tactical strategies to signal a complete shift away from equities and towards cash. This in turn has left practitioners second-guessing the wisdom of their indicators and hesitant to pull the trigger. For this fascinating conversation we bring none other than Corey Hoffstein of Newfound Research. Corey has lived by the “risk cannot be destroyed, only transformed” dictum, which has guided the core of his investment philosophy across three axes of diversification – sources of risk, process and time.  Our similar thinking (including recent warnings of the dangers involving simple DIY tactical heuristics) led to an extensive research collaboration and ultimately to co-launch the Newfound / ReSolve Robust Equity Momentum Index (following requests from our FinTwit brethren). Our discussion with Corey goes deep into the benefits of building strategies based on Ensemble Methods while considering the impacts of cost, the role of timing and luck, and ways to increase one’s confidence in a back-test. We also examine the behavioral benefits of strategy execution using an array of signals as opposed to binary approaches. A plateful for investors of all stripes, especially practitioners.

Chris Schindler, a pioneer in Alternative Risk Premia (ARP), shares his extensive experience from Ontario Teachers’ Pension Plan, where he developed groundbreaking quantitative strategies. He discusses the rise of index investing, emphasizing that there's no such thing as truly passive investing. Schindler also delves into the challenges of recent ARP returns and presents his innovative project aimed at providing uncorrelated alternatives. The conversation highlights the importance of diversification and understanding risk allocation in today's complex investment landscape.

For the quant community, it was arguably the most awaited book of 2019. Finally, a peek behind the curtains into the most successful hedge fund manager in history. The +66% average (gross) returns that Jim Simons and his army of data scientists produced over the last 17 years in their Medallion fund captured the imagination of investors across the globe and their obsessive secrecy just added to the aura of mystique. After much resistance from the protagonists (not least of which Simons himself), our guest today was able to pierce that bubble and tell the story of Renaissance Technologies. A 20 year veteran of The Wall Street Journal, Gregory Zuckerman has authored best sellers such as "The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters", "The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History", and co-authored the award-winning "Rising Above: How 11 Athletes Overcame Challenges in their Youth to Become Stars" with his two sons. Our 30-minute conversation with Zuckerman tracks a different course from his recent interviews, focusing on how the journey to write this book has changed his understanding of the asset management industry and how his relationship with some of the characters has evolved. But most importantly, we discuss a topic that has been at the core of ReSolve's philosophy from the early years: the idea of harvesting sustainable edges from group relationships as opposed to individual trades or securities. Waste no time and dive right into the latest episode of Gestalt University.

As fees across the world of financial services have decreased over the last few years, the former quotas and commission-based model under which investment advisors operated sounds like a relic of a bygone era. Back then, advisors were not in the business of providing services such as estate or tax planning, let alone financial education. Mike Hirthler, of Jacobi Capital, was a pioneer and an innovator. When he left the commissions-based job he got just out of college to launch a fee-based advisory firm, there was no shortage of skeptics telling him he would never make it under this new model. But it didn’t take long for the industry itself to follow suit. After almost 35 years in the business, Mike recounts the difficulties of the early years and how the important decision of remaining independent ultimately contributed to the firm’s success. A student of behavioral finance and the psychology of markets, he remains passionate about financial literacy – both for the younger generations that he supports in local colleges (and mentors at the office), as well as the ‘boomer’ generation (many of whom have been his clients for decades) that are currently dealing with the challenges of retirement. Following the teachings and lectures of Charlie Munger over many years introduced him to the concept of mental models and combining disciplines to improve problem-solving, which led to an interesting “encounter” with his “mentor-at-a-distance”. It was also through one of his lectures that Mike came across the work of German mathematician Carl Jacobi – who inspired his firm’s name – and one of his most important lessons: "Think through your major problems backwards; invert, always invert".