Excess Returns

Conservative investing has a reputation for being boring. But our guest this week deploys a conservative approach that is far from that. We speak to Dave Wright of Sierra Investment Management. Sierra uses a unique trend following approach to manage its portfolios and mitigate risk. We discuss the current state of markets and the outlook for stocks and bonds as well as unique methods to manage risk in different market environments.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

Michael Mauboussin is one of the most insightful long-term thinkers in the investing world. For decades, his research has taken deep dives into markets, valuation and how we can all become better long-term investors. He is currently Head of Consilient Research at Counterpoint Global.  We talk to Michael about a wide range of topics, including factor investing, the dangers of simple valuation multiples, the importance of intangible assets, the proper application of base rates and the process of expectations investing.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

There is a perception many have that the market is rigged in favor of corporate insiders. And there is certainly justification for that perception. In this episode we take an in depth look at the issue with Wharton professor and insider trading expert Daniel Taylor. We start with the basics, including how insider trading is defined and the laws that govern it. Then we dig deep into his research and what it tells us about the behavior of insiders and whether they have an unfair advantage.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

In this episode, we speak with O'Shaughnessy Asset Management's Ehren Stanhope about his excellent research paper "The Great Inflation, Factors, and Stock Returns." We discuss the history of inflation and the major regime changes that have occurred throughout history and what we can learn from them to help evaluate the current inflationary picture. And we look at how different factors and assets have performed in high inflation environments.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

In this episode we take a deep dive into technical analysis with Andrew Thrasher, founder of Thrasher Analytics and portfolio manager at the Financial Enhancement Group. We look at the major tools that technicians use and the methods they utilize to apply them. We go through a real world example using the S&P 500 to see how these tools are put into practice. We also cover his excellent paper "Forecasting Volatility Tsunamis" and discuss the conditions that he found were typically present prior to significant spikes in market volatility.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

Asset pricing models have evolved significantly over the past several decades. From the Capital Asset Pricing Model to Fama and French's 3 Factor Model to their more recent 5 and 6 Factor Models, academic research has continued to work to improve our understanding of what drives stock prices.  But our guest this week thinks asset pricing models might need a revolution more than evolution.  We speak with Lu Zhang, who is the John W. Galbreath Chair and Professor of Finance at the Fisher College of Business at Ohio State University. He is also the creator of the Q factor model, which takes a first principles approach to asset pricing that starts with economic theory rather than adopting the framework of previous models.  We discuss the evolution of asset pricing models over time and take a detailed look at the major models that have come along the way. We then look at the philosophical arguments for why traditional asset pricing models may be taking the wrong approach and look at the details of the Q factor model.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

We are currently in a very interesting time for investors. We have experienced a run in equities following the 2020 decline that many did not think was possible. We have seen unprecedented fiscal stimulus and many are worried about inflation. And despite all of that, bond yields remain very low. This week we take a look at all the major asset classes and how we can make sense of the current situation with Westwood's Adrian Helfert. We discuss the future of stocks and bonds, as well as the outlook for alternative assets like commodities and gold. We also discuss the lessons he learned from his experience as a combat medic and how his background in physics has helped him as an investor.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

Momentum was a factor that many academics were very reluctant to embrace. Our guest this week, Sheridan Titman, helped to change that with his 1993 paper "Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency" that he co-wrote with Narasimhan Jegadeesh. In this interview, we discuss both his original work on momentum and what he has learned since. We also cover his research on combining value and momentum and the relationship between location and firm value, and what he thinks practitioners get wrong about academic research.  We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

Inflation is probably the most talked about topic in investing today. Some think it has become a major problem. Others (including the Fed) think it is transitory. While still others think we are headed for a repeat of the 1970s or even hyperinflation.  But many of the opinions on both side are not informed by the facts. So we wanted to do an episode where we started with the basics to help us understand what is going on now, and what might happen in the future. To do that, we couldn't think of a better person to talk to than Discipline Funds founder and author of the Pragmatic Capitalism blog Cullen Roche.  We look at inflation from the ground up.   We discuss:  -  the various ways to measure it and how they are different   - the history of inflation in the US  - why quantitative easing didn't cause inflation, but fiscal stimulus did  - the major forces that have kept inflation down   - the differences between now and the 1970s  - what hyperinflation is and why it is very unlikely   We hope you enjoy the discussion.  ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau

This week we talk to Ritholtz Wealth CFO Bill Sweet. Bill has had a very unique career, which started serving our country in the military and also included a stint in his family's tax business prior to his work at Ritholtz. We talk about the lessons Bill has learned in his career and how others can benefit from them. We also take an in depth look at the Biden tax plan and cover the major points investors should be aware of in it. And we discuss what he has learned as an early adopter of direct indexing for clients.  We hope you enjoy the discussion. ABOUT THE PODCAST Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors. SEE LATEST EPISODES https://www.validea.com/excess-returns-podcast FIND OUT MORE ABOUT VALIDEA https://www.validea.com FOLLOW OUR BLOG https://blog.validea.com FIND OUT MORE ABOUT VALIDEA CAPITAL https://www.valideacapital.com FOLLOW JACK Twitter: https://twitter.com/practicalquant LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094 FOLLOW JUSTIN Twitter: https://twitter.com/jjcarbonneau LinkedIn: https://www.linkedin.com/in/jcarbonneau