Resolve Riffs Investment Podcast

This week Adam and Rodrigo of ReSolve Global* had the pleasure of speaking with Jason Josephiac of Meketa Investment Group. Our conversation spanned topics including:

• His background in the industry and joining Meketa
• Asset Allocation: label/category diversification vs. risk/functional diversification
• Risk Parity vs. Traditional Asset Allocation
• What Portable Alpha
• Synthetically creating your own “bond” with risk factors not directly tied to spreads and rates
• Risk Mitigating Strategies (RMS)
• Long Volatility – 1st Responders
• Trend Following – 2nd Responders
• Beta Neutral and Uncorrelated (Diversifiers)
• Behavioral/psychological biases of investors
• Why “hedge funds” are not an asset class and many “hedge fund” programs tend not to withstand the test of time
• What is risk?
• Generalists vs. Specialists
• How LDI portfolios could be improved
• Evolution of dissecting returns and understanding factor risks, what is alpha vs. beta
• How can investment managers and investors become better aligned?

Thank you very much for tuning in – please like and share if you find the content valuable!

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

Our guest this week was Rob Van Wielingen, President & CEO of Viewpoint Investment Partners, a boutique investment management firm offering systematic strategies to private and institutional investors. Our conversation included:

• The Van Wielingen family background in the oil and gas industry
• Rob’s decision at an early age to focus on finance and technology
• Learning from his grandfather’s experience: “I know what it’s like to be rich – I’ve been rich three times”
• How the family gradually moved from highly concentrated allocations in energy companies to diversified portfolios
• The logical fallacy of active vs passive as the starting point for rethinking their investment approach
• Why the path to becoming rich is diametrically opposed to that of staying rich
• Trial by fire – launching the business during the Great Financial Crisis
• From rudimentary spreadsheets to ‘full blown quant’
• The trouble with lagged and infrequent data
• Embracing the ideas of Return Stacking
• The differences between Risk Parity and Risk Budgeting
• Recursive Risk Parity – drawing the best ideas from different approaches
• Human nature vs systematic approaches
• Carry, Trend, and how asset allocation can be both relative and absolute
• And more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management Inc.

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc.is a registered person with the Cayman Islands Monetary Authority.

This week we had the pleasure of speaking with Andy Constan (CEO / CIO at Damped Spring Advisors) and prolific member of the FinTwit community under the @dampedspring penname. Our conversation spanned topics including:

• His long and interesting career in the investment world
• Starting with equity derivatives and eventually earning his ‘global macro education’ at Bridgewater Associates
• The constantly evolving challenge of generating alpha
• Trading and managing portfolios at scale and the importance of liquidity
• Separating alpha from beta
• Basis risk vs liquidity risk
• The broad macro picture vs what is priced in
• The unique challenges posed by the current environment
• The front-running of quantitative tightening
• The daily marking to market of risk premia
• The weak link between consumer inflation and the Fed’s balance sheet
• The interplay between the Fed, the Treasury and the bond market
• Interpreting the messages coming from policymakers
• The importance of positioning data and rebalancing flows
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

Vincent Deluard is the Global Macro Strategist for StoneX, where he advises institutional investors on asset allocation and risk management. He joined us for an awesome conversation that covered topics including:

• His early life in France - expectations for public service but ‘saved’ by a scholarship to study abroad
• Bitten by the ‘quantitative bug’ from the very start of his career
• How his macro framework evolved
• Inflection points in the mega trends that have endured for the last 40 years
• Concerns with inflation pre-date the pandemic
• How COVID ‘shrank’ time
• Sample of one – why Japanese stagnation should not be extrapolated as the path for other countries
• The demographic collapse in East Asia
• Views on MMT – analytical tool more than policy framework
• The ‘incestuous’ relationship between central banks and their governments’ treasuries – from the left pocket to the right
• The ‘fairy tale land’ of the Fed’s economic projections
• Inflation as the last painful path to ‘clean up’ excess debt in the system
• US, Europe, China, and Japan – immigration dynamics and long-term prosperity
• Analogues with the post-WW2 and 1970s inflationary periods and why this time is likely different
• The risk that inflation continues to accelerate – the expectation channel
• The ‘kink’ in the Eurodollar curve
• Are there viable alternatives to the US dollar?
• How investors should rethink and broaden their asset allocation approach
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

It had been a while since we riffed with our good friend Meb Faber (co-founder and the Chief Investment Officer of Cambria Investment Management), and as always, he didn’t disappoint. Our thought-provoking conversation covered topics such as:

• Meb’s big announcement – his Idea Farm, which curates investment content from a wide variety of sources, is now free
• Recent equity market dynamics and the pain that historically comes with inflation
• Why dogmatism and inflexibility are two of the worst traits for investors
• Never allowing your ideas to become part of your identity
• Diversification and ensembles are the right way forward, but most investors can’t follow because they are secretly gamblers at heart
• Marc Faber is not Meb’s dad
• Chasing the hot hand is rarely a winning investment strategy for the long run
• The irresistible allure of lottery-ticket stocks vs the Law of Large Numbers
• The incredible round-trip by ARK ETFs and a following that resembles a religion
• Every investment makes you richer or wiser, but never both
• The power of compounding and the most unbelievable investment statistic you’ll ever hear
• Most professional investors have a process for what they buy, but no process for what they sell
• The right time horizon to evaluate a strategy is MUCH longer than most investors can stick with if it doesn’t outperform from the start
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

We were joined this week by Kris Abdelmessih, who spent most of his career as an options trader and now writes about the relationship between money, work and creativity in the Moontower blog and weekly newsletter. Our conversation covered topics that included:

• Becoming a derivatives and options trader straight out of college
• Defining the difference between trading and investing
• Identifying alpha – understanding your edge and capitalizing on it
• The business of trading
• Not just surviving but thriving during the Dotcom Crash
• Learning under the wings of Reggie Brown
• The high natural rate of attrition in options trading
• A portable skillset – from derivatives to the underlying
• The highly disruptive period of the early 2000s
• The trading pit as the home to misfits and ‘X-men’
• Speed as a quintessential skill
• How the ‘shale boom’ compressed volatility in natural gas
• Trading can be defined as ‘seeing the present clearly’
• Joining FinTwit to learn about the broader investment landscape
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

Our guest this week was Rohan Grey, assistant professor at Willamette University College of Law where he teaches Contracts, Business Associations and Securities Regulation. Rohan is also a prominent advocate of Modern Monetary Theory (MMT) and has also recently been involved in drafting regulations in the digital asset and currency space. Our wide ranging conversation took us through historical periods, current policy debates, and included:

• Why laws have historically been ‘kind to the rich’ and ‘just to the poor’
• The notion of ‘legal realism’
• The fog of legal liability risks
• MMT vs Classical Economics
• Defining money from the MMT vantage point
• Personifying ‘the taxpayer’
• Private credit vs official money
• Why the US actually left the gold standard in the 1930s and not the 1970s
• The greenback and the paper money movement
• Currencies backed by precious metals and ‘Schrodinger’s Gold’
• Governments have monopoly over the use of force, but not the creation of money
• The policy paradigm shift precipitated by the pandemic
• MMT is not just about deficit spending, and other major policy components
• Unemployment as a policy choice
• Biden’s “whatever it takes” moment
• Neoclassical monetary tightening and the ‘shadow of Volcker’
• E-Cash, CBDCs and policy frameworks for the digital realm
• Central Bank vs Treasury – who should have sovereignty over the currency
• Why it can be wrong to be right too soon
• And much, much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

Dr. Antti Ilmanen, Principal and Global Co-head of the Portfolio Solutions Group at AQR Capital Management joins ReSolve Global CIO Adam Butler to discuss the core themes from Antti’s new book, “Investing Amid Low Expected Returns.” In this 100 minute conversation we explore the following themes at length:

• The pros and cons of several models for forecasting stock returns
• The role of bonds in portfolios when yields are low.
• How to measure and optimize the credit risk premium
• The sources of return for commodity portfolios and the critical role of inflation sensitive assets for optimal portfolio diversification
• Why the illiquidity premium is probably an illiquidity discount
• Why PE returns are probably overstated and can be mostly replicated with public market portfolios
• Style premia as distinct from academic factor models
• A lengthy discussion on the role and character of global carry strategies, and myth-busting
• Is global carry the ultimate risk premia strategy?
• The many benefits of trend and macro trading strategies, especially during inflationary regimes
• Why Carry and Trend work so well together in portfolios
• The origins of ‘Defensive Premia’
• Which style premia are most overlooked relative to their potential value in a portfolio
• Which style premia have historically offered the highest sensitivity to inflation
• Why global risk parity allocations across risk premia and style premia represents the most efficient portfolio
• The regulatory imperative to maximize diversification
• Why most investors can’t or won’t invest this way

There is not one wasted moment in this conversation, and it is chock-full of practical take-aways for investors of every type. If you listen to one podcast this week, and are motivated to make the most of your invested capital, make it this one!

You can find Antti’s book on Amazon here: 

https://www.amazon.com/gp/product/1119860199/ref=dbs_a_def_rwt_bibl_vppi_i2

Additional book-related content; including “deleted scenes” that didn’t make the final book:

Aqr.com/Serenity

Hosted by Adam Butler of ReSolve Global*

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

Our guest this week was Stuart Barton, co-founder and Chief Investment Officer at Volatility Shares. Our conversation ranged across topics that included:

• Early career as a vol trader and how the space has changed over time
• Volatility Shares’ investment approach – probability-weighting and active trading
• ETNs, ETFs and other ‘packaging’ models – benefits and drawbacks
• Settlement as a crucial variable – matching vehicles and their underlying assets
• A post-mortem on the ‘Volmageddon’ episode in February 2018
• Volatility strategies – wide variety of flavors for investors of all stripes and sizes
• ‘Picking up pennies in front of a steamroller’ and other vol strategies to avoid
• Asymmetric risks and rewards
• Term-structures, curves, expirations and roll-yields
• The ‘boring’ 3-month VIX futures contracts
• Multiple sources of signal in the VIX curve, including its shape and how it moves vs the S&P 500 (aka skew delta)
• The relationship between spot and future volatility at different points along the curve
• The various ‘800-pound gorillas in the room’ and their techniques for minimizing market impact
• Why attempts at front-running these larger players sometimes go awry
• The reflexive and ever-evolving race towards alpha
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.

This week we had the pleasure of welcoming Bilal Hafeez, founder, CEO and Head of Research at Macro Hive, and the host of the Macro Hive Conversations podcast. We had a broad global macro conversation that included:

• Bilal’s journey in the finance industry through North America, Asia and back to Europe
• Retiring from corporate life and founding a ‘hive-mind’ research firm
• A top-down approach with an eye for structural trends and a cyclical view
• Interest rates as the main concern for both retail and institutional clients
• Central Banking dichotomy – austere in developing nations, creative across the G7
• The US Dollar as the ‘cleanest dirty shirt’
• Does the US dollar system still serve the best interest of the US?
• The gravity-defying paradox of equity markets (especially in recent weeks)
• The Ukrainian war and a global commodity shock
• The prospects of an energy crisis
• An upcoming US recession and the possibility of yet another policy blunder by the Fed
• Navigating the spike in uncertainty with a large cash position
• Digital assets – a multitude of use cases, evolving regulations, and long-term bullishness
• The podcast guests that have changed his views over time
• And much more

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.

*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.