TTU125: Trend Following vs Short Term ft. Michael Pomada, President & CEO at Crabel Capital Management

Today, we are joined by President and CEO of Crabel Capital Management, Michael Pomada, for a talk on their approach to trend following as well as short-term strategies. We discuss the trading philosophy behind Crabel Capital Management and why they choose to primarily be long vol, what role the Sharpe Ratio plays in their trading strategy and how they use data in their research process to understand markets, how being de-siloed helped them to make 2022 their best year in terms of research and how they create the most optimal work environment and culture for their team. How they utilize machine learning in their work and why they spend tens of millions of dollars on execution infra-structure, why they believe replication is like drugs and medication and why ESGs are important for them as a firm, how they manage drawdown control and mitigate risk. Lastly, we discuss why Pomada has found peace with fees going down and why being innovative is key in maintaining a solid income, why they are not concern about competition in the industry and much more.

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Episode Timestamps:

02:20 - Introduction to Crabel Capital Management

03:41 - The philosophy behind their work

08:46 - Their trading objectives

11:21 - Too concerned about the sharpe?

14:28 - Better alternatives to sharpe?

16:43 - Unearthing the anomalies

22:49 - Creating the perfect environment

26:34 - Machine Learning - a magical unicorn?

31:17 - Getting the execution right

35:01 - The feeling of being replicated

39:28 - Their approach to trading markets

42:55 - The ESGs?

47:43 - Managing risk

58:42 - Are fees on the rise?

01:03:44 - Getting the execution right

01:07:22 - The role of their product

01:10:51 - Which bucket do they belong to?

01:12:18 - Crazy times for liquidity

01:16:24 - Being controversial

01:20:14 - Thanks for listening

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