TTU11: Lessons From a Highly Educated Founder & Fund Manager ft. Mathias Bucher of AllMountainCapital – 1of2

Our next guest worked for the European Commission before starting his own firm. In an unusual career twist, he sold his company to a larger firm only to buy it back from them a few years later and had to start from scratch. Learn about his aversion to risk, his short term trading strategies, and his interesting past as one of the fastest readers in the world.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:About Luc’s time working for the treasuring of the European Commission starting in 1985.How he learned about Options trading before many people were doing.About his years working for Bankers Trust in London and Morgan Stanley as a trader and how those experiences influenced his career later.How he started Analytic Investment Management (AIM), doing options trading.How he acquired his first clients.Why he got started trading currencies.About the early days of trading and the physically demanding work before computers took over.How his attendance at conferences, getting invited to speak on panels, and other speaking engagement led to the sale of his company.About the selling of AIM to Trobico in 2006 and why trobico bought his firm.How he ended up buying his company back from Trobico in 2010 after management changes caused them to shut down everything in the alternative investment space.About the different products that Capital Hedge provides.How he had to start from scratch, getting all new investments after buying his firm back.Where he is now – advising $200 Million US dollars, mainly in his DPI program.How he is one of the fasted readers in the world, and how he learned to speed-read from a class he took in the Netherlands.How he convinces institutional investors that a 2-3 person company is enough to manage the investments they have, and how technology has changed the game from needing a staff of 25 to needing just 2.How small managers need to describe what they do, and why they might not want a multibillion-under-management hedge fund.How investors should look at a track record of a firm and why that doesn’t necessarily mean good returns in the future.Why investors should see the latest test of what the firm is currently running rather than worry too much about the historic model results.How Luc trades and develops his systems, and how he looks for patters in the market.How to avoid model decay and avoid the risk when the model will stop working in the future.-----Resources & Links Mentioned in this Episode:Learn about the European Commission.More about Bankers Trust.Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written <a...

22 Sep 20141h 19min

In the second part of our conversation with Marc Malek, we explore the strategies that he uses to build his models and how he explains them in simple terms. We go in depth about drawdowns and what investors should know about them. We also discuss what keeps Marc inspired, what he does for fun, and how he couldn’t imagine having any other job.Welcome back to Part 2 of our conversation with Marc Malek.In This Episode, You’ll Learn:About the four strategies inside Conquest Capital’s Macro program.How the technological revolution has changed the market and trend following, now that everyone gets the same information at the same time.Marc’s approach to building trading models.Defining risk in terms of upside deviation vs. downside deviation in the portfolio.Why correlation is one of the most misunderstood stats that you can use.How Marc deals with drawdowns and why he thinks nothing new is happening now that did not happen before.His view on backtesting.The challenges hedge fund owners face in the current business climate and why Marc is lucky to have investors that have stuck by him.Why Marc is motivated to keep pushing through this period and why he loves what he does.The story of how Conquest Capital got its first investor, and how in the early days investors cared more about managers and interacting with them personally.Marc’s biggest failures, and how he overcame them.The hobbies Marc has and why he likes seemingly dangerous sports.Resources & Links Mentioned in this Episode:Learn more about Backtesting.Learn about Downside Deviation.Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.Follow Marc Malek on Linkedin.IT’s TRUE 👀 – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “The Many Flavors of Trend Following” here.Learn more about the Trend Barometer here.Send your questions to info@toptradersunplugged.comAnd please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast.

18 Sep 20141h 5min

This guest had a different path that eventually led to owning a hedgefund in New York. Marc Malek got a grant from NASA to study how different armored tank positions would lead to winning results on the battlefield. Traveling to Wisconsin to begin his research, his advisor steered him to do a similar project on stocks, bonds, and equities instead. He went on to work for UBS and finally founded his own firm, Conquest Capital Group. His story will fascinate and inspire you.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:The story of how Marc became interested in the financial markets after a university project, a bit unexpectedly.About Marc’s upbringing in Beirut, Lebanon.How his studies at Caltech in neural networks and decision support systems eventually led him to the stock market.About his grant from NASA to research the position of tanks.His job offer from Oracle that he turned down.About his first job out of university at Salomon Brothers and why he left after one year.How Marc got hired at UBS and moved to Europe and then Asia during his time with the company.Marc’s departure from UBS and how he started Conquest Capital Group.How trader’s thought processes are turned into trading models.Why models are not black boxes and why investors should not be worried.The history of trend following and the old systematic approach.How markets move for alpha and beta reasons.About “turtle strategies” vs “trend following 2.0”.How Marc’s strategies and models have evolved over time.About his product Conquest Macro and the two mandates that the product has.How his product makes the bulk of its return during periods of risk aversion and high volatility.How his firm developed a risk index in a time before anyone was doing them.-----Resources & Links Mentioned in this Episode:See Episodes 13 and 14 for more discussion on “Turtle Strategies”.Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend Barometer here.Send your questions to <a href="mailto:info@toptradersunplugged.com%22%20%5Ct%20%22_blank" rel="noopener noreferrer"...

15 Sep 20141h 13min

Welcome back to the second part of our discussion with Aref Karim. In this episode, Aref discusses his firm’s strategies and the broader philosophies that drives what he does. He also talks about market volatility, the need to innovate while keeping models intact, his perspective on drawdowns, and what investors should be asking their managers. You’ll learn something about the art galleries and music that fuels his inspiration, and what he thinks it takes to become a successful hedge fund manager.You will be amazed by the candid truthfulness of Aref at the end of the episode as he speaks about his personal life and the current state of his business. Thanks for listening to Part 2 of the conversation, I hope you enjoy it.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:What strategies his firm uses regarding commodities and currencies.How Aref explains his investment strategy in a concise and understandable way.Why volatility is an important source of information when making investment decisions.How to make the best of the current market environment and innovate.Why his firm evolves their model on a macro level and does not change the model every time the markets change.How QCM manages risk.Aref’s perspective on drawdowns and how to make investors comfortable with drawdowns and see them as an opportunity.How investors should be evaluating the track records of managers given that some firms’ models have changed over time.How growth and technology have effected the relationship managers have with potential investors and why it is still best to meet the manager in person.When investors ask questions of potential managers, the economic alignment question often gets left out.What it takes to be a successful fund manager: treating it like a business even if you are investing for yourself.Aref’s personal appreciation for the arts, art galleries, opera, and jazz. How it inspires him.How Aref sees the current state of QCM and why he believes in its future.-----Resources & Links Mentioned in this Episode:Learn about Long Volatility vs Short Volatility, mentioned as “Long Vol” by Aref in the episode.Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend Barometer <a href="https://www.toptradersunplugged.com/resources/market-trends/" rel="noopener noreferrer"...

11 Sep 20141h 8min

How do you transition from working alongside the capital management industry to starting your own hedge fund? Our next guest grew up in Bangladesh but fled to London during the Bangladesh Liberation War in 1971. He worked as an accountant and then went on to join the Abu Dhabi Investment Authority (ADIA) where he pioneered the organization’s futures investment department. Learn about his personal setbacks and successes, his innovative investment strategies, and how he founded Quality Capital Management in the UK.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:About Aref’s childhood in Bangladesh.How his father wanted all 10 of his children to attend university and instilled in them the belief system that made them successful.Why Aref decided to study English and Literature even though his background was in the sciences.The story of Aref’s escape to the United Kingdom because of war and social upheaval in Bangladesh.How he went from being an accountant in England to working for the largest sovereign wealth fund in the world, ADIA.Aref’s perspective on the history of the hedge fund industry and the alternative investment industry.About the beginnings of ADIA’s futures department that Aref helped to start.The early days of the futures industry and Aref’s perspective on trend-following.How he overcame personal setbacks when his wife unexpectedly passed away, leaving him with three young children.About Aref’s return to the UK and his decision to start his own CTA and start trading in futures.About the genesis of Quality Capital Management.How Aref’s investment strategy evolved and the specifics of his current trading strategy.How he measures the “Flow” of the market.Why his strategy looks at changes in volatility and doesn’t care whether it is a bond or an equity.How QCM went from using a few indicators to no indicators at all.-----Resources & Links Mentioned in this Episode:Learn about Aref Karim on his Wikipedia page.Learn about the Bangladesh Liberation War that displaced Aref from his country of birth to the UK.Learn more about the Abu Dhabi Investment Authority (ADIA).Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” <a href="https://www.toptradersunplugged.com/10-reasons-shownotes" rel="noopener...

8 Sep 20141h 9min

Welcome back to the second part of our interview with Scott Foster, President and Founder of Dominion Capital Management.In this episode, we learn the philosophical rules that drive his firm, and how he bridges the gap between the philosophy behind his decisions and the models he creates. We discuss the increased governmental involvement in the markets and the adjustments that Scott has had to make to adapt to new signals. Finally, we learn the personal habits that help Scott succeed. Thank you for listening to Part 2 of our conversation with Scott Foster.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:Why Scott does not worry about model decay due to the principals with which he runs his firm.How to bridge the gap between philosophy and rules.How he created the Sapphire program, his firm’s signature service, and what it took to create it.How increased government involvement in the markets has changed his system and made him adapt to new signals in the markets.Why and how political feedback and involvement are affecting the markets and short term trading.How his firm is able to so expertly predict to potential customers their drawdowns and how they contain them.That investors spend too much time dissecting the drawdowns and not enough time looking at why and how they made money.The principals of behavior finance and the underlying philosophical principals such as self attribution bias and loss aversion.How alone time and contemplation have led to 80% of Scott’s best trading ideas.The hardest part of being the President of a fund and why it is not the trading.-----Resources & Links Mentioned in this Episode: Learn more about illusory superiority, the bias that the Lake Wobegon effect is name after, or Lake Wobegon itself, a fictional town in Minnesota.Learn more about Mean Reversion, which Scott’s firm looks at closely in the models they use.Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend Barometer here.Send your questions to <a...

4 Sep 20141h 26min

Our next guest was a philosophy major and a magician before he ever considered trading in the stock market. In Part 1 of our talk, he describes how philosophy and psychology determine his firm’s decisions and the story of how he started trading in a small town in Pennsylvania.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:On the 20th Anniversary of Scott’s firm, he looks back on how it all started.Scott’s life as a magician and how the principals of magic influences his perspective on trading and the market.How he became a philosophy major and how he applies philosophy to trading and everything his firm does.How he started trading in the market, getting a group of his college friends to take out cash advances on their credit cards and investing it.The Austrian perspective on economics that his college was well known for.How he educated himself in futures trading and invested long before he ever met another trader.Scott’s initial lessons learned from trading in the stock market; how he lost almost all of his capital in one day and had the first sleepless night of his life.How he made the mistake of investing in coffee and cocoa in the late 1980s and what he learned from that experience.How he started his first firm in 1989.How Scott traded while living in rural Western Pennsylvania.How a philosophy major with no connections to the financial world used his network to find a mentor.The story of Scott becoming a principal at one of the biggest short-term CTAs in the world.The story of Dominion Capital Management, which he started in 1994 by moving to Chicago.Why he is based in Traverse City, Michigan.How his firm is a bit different and why they don’t have any mathematicians or scientists on their team.-----Resources & Links Mentioned in this Episode:Learn about the Square of Opposition that Scott explains in the episode.In Scott’s first job at a firm, the company hired people belonging to Mensa.Learn about how trading was conducted and firms operated before the use of personal computers and the Internet. Scott’s firm had a VAX computer.Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend...

1 Sep 20141h 22min

Welcome back to the second part of our interview with Scot Billington of Covenant Capital Management.In this episode, Scot delves into the practice of trend following and why it is a great model to follow. He also discusses tips for beginning traders and investors, and advice for those who wants to start a firm. Thank you for listening to Part 2 of our conversation with Scot Billington.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:The story of Scot’s childhood obsession with mathematically based, but unknown future outcomes.The discipline required to follow a mathematical model.The advantages of trend-following and why the media reports that “Trend Following is Dead” every few years.Scot’s philosophy on position sizing.How every sector in the market is highly correlated.Getting comfortable with taking risks: they exist and it is impossible to avoid them.The Barbell strategy: have very little money at risk, but the money that is at risk is in the most aggressive things that it can be.The biggest mistake that allocators make.How Scot conducts research for Covenant Capital.Why he is based in Nashville and how he overcomes the challenge of asking investors to buy into the long time-frame.Finding your niche as a boutique firm.Advice for managers wanting to start firms today.-----Resources & Links Mentioned in this Episode:Scot mentions how the media often announces the death of trend following. Here’s an article on the subject from Futures Magazine.Learn about the Barbell Trading Strategy.See 10 Fallacies when Selecting CTAs.Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend Barometer here.Send your questions to info@toptradersunplugged.comAnd please share...

28 Aug 20141h 8min