TTU121: Trend Following... from Optional to Essential ft. Nick Baltas
Today, Niels and Rob are joined by Nick Baltas, Managing Director at Goldman Sachs, for a conversation on systematic investment strategies. We discuss the difference between a number of systematic trading strategies and the pros and cons of each, how crowding impacts systematic investing and how the narrative created by media affects the systematic investment space, the capacity constraints for CTAs and the impact of costs. We also discuss how big an impact the trend following community has on the markets and the strength and weaknesses of different alternative markets, selective hedging and how skew can be used as a predictor of future returns. Lastly, we discuss the challenging environment of 2022 and why Trend is performing so well this year, why Trend Following is becoming an essential part of every portfolio and much more.
----
----
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 “The Many Flavors of Trend Following” here.
Learn more about the Trend Barometer here.
Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Rob on Twitter.
Follow Nick on LinkedIn.
Episode Timestamps:
00:00 - Intro
03:16 - Introduction to Nick Baltas
05:59 - Baltas’ findings from comparing different systematic trading strategies
12:10 - Is the CTA industry too small to have an impact?
16:44 - Blame it on the trend following people
21:42 - Baltas’ research on capacity
30:03 - The impact of trend
37:54 - Pros and cons between different alternative markets
46:10 - Using skew in your strategy
52:57 - Nick's article in Financial Times
01:05:47 - Is Trend Following becoming Essential for all investors?
01:11:55 - Thanks for listening