Resolve Riffs Investment Podcast

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.

This week we were joined by Lawrence Hamtil, founder and principal at Fortune Financial Advisors, author of their popular blog, as well as an active member of the FinTwit community. His power lifting hobby and contrarian nature permeate his writing and investment philosophy, which made for a great conversation that included:

• Why you can’t fire a cannon from a canoe – the importance of building a solid foundation
• Discipline, preventing major injuries/drawdowns and proper benchmarking – investment wisdom drawn from weight-lifting
• “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons” – Jim Rohn
• Investment approach shaped by the turmoil of the Great Financial Crisis
• Tobacco, defense contractors, and other “less desirable” sectors– benefiting from narrative-induced externalities
• Low beta, minimum variance and inflation risks

We also delved into his barbell approach for equities, sector allocations and their cyclical natural, ESG, regulatory moats, and how to avoid value traps.

Thank you for watching and listening. See you next week.

Investors are often prone to “home-country” equity bias and other heuristics that leave them under-exposed to the world’s many diverse opportunities.

We discuss:

• The importance of global asset class diversity
• Ray Dalio and the “All Weather Portfolio”
• Making portfolios resistant to inflation and growth shocks

Hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global.

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.

Although most of us like to think that we will rise to the occasion when the moment comes, various studies show that the vast majority of people will sink to the level of their training in the heat of battle. A systematic response to dynamic scenarios, removing one’s emotions from the equation, has been the standard approach in the military for millennia. In the world of investing, rules-based methodologies remain a contentious topic, even though a majority of the most successful asset managers are quants. Rob Carver (Independent Systematic Researcher and Author) knew early on that his investment career could only take the ‘systematic path’. He joined us for a great conversation that covered:

• His early days on a trading floor, which felt like trying to solve Sudoku puzzles with a dozen angry men screaming at him
• Drawing inspiration from Thomas Bass, author of The Predictors
• Nuances across different rules-based methodologies
• Allowing intuition to seep in – when and how to sin
• The chasm between managing 3rd party capital versus your own money
• The evolution of his systematic thinking – the humility and beauty of ensembles
• Model fitting, automation and optimization – going down a quant rabbit hole

Rob also detailed some of his experiences during major market selloffs, particularly in the Great Financial Crisis and more recently in the Covid Crash. We also established that systematic investing just isn’t sexy enough for Hollywood, and we’ll likely never see Keanu Reeves starring in “The Covariance Matrix” (h/t Breaking the Market).

Thank you for watching and listening. See you next week

Philip Tetlock’s research on the qualities of Super-forecasters explains why forecasting is hard and how diverse models and systematic thinking can help close the gap.

We discuss:

• Improving predictions by regularly updating data
• The Brier Score and why it really matters
• Why larger samples permit more accurate short term predictions
• The difficulties with the “Long Now” narrative

Hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global.

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.

Our guest this week was none other than Ted Seides, host of the popular Capital Allocators podcast. Ted began his career under the tutelage of endowment legend David Swensen at Yale University Investments, then went on to found Protégé Partners, investing and seeding small hedge funds. This career arc gave him a unique perspective into the decision-making processes of multi-billion-dollar institutions, as well as the portfolio managers on the receiving end of their allocations.

After almost 200 podcast episodes and a recently released book – Capital Allocators, How the world’s elite money managers lead and invest – it’s hard to overstate the breadth and depth of Ted’s institutional “inside baseball”. We covered:

• The range of disciplines that are leveraged by some of the world’s most successful investors
• Why capital allocators are essentially interviewers (and can make for good podcast hosts)
• Repetition, pattern recognition, and separating the wheat from the chaff
• Governance and the constant tussle between CIOs and investment committees
• Negative screening, triangulation and reference checks – above and beyond due diligence
• Performance chasing, familiarity and other biases – why institutions often resemble retail investors
• Leveraging the work of Annie Duke, Gary Klein and Michael Mauboussin

We also discussed the difficulties of high information asymmetry, behavioral fortitude, and cognitive diversity. Ted even shared a few interesting anecdotes from his time working with Swensen.

Thank you for watching and listening. See you next week.

Anyone who is responsible for stewarding wealth, from a high net worth person, to a family office, to an investment firm, to a pension plan.

We discuss:

• Long term preservation of wealth for 30, 50, 100 years
• Building an investment “house” to weather all storms
• The difference between earning wealth and protecting it long term
• Clearing the “high confidence” bar

Hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global.

Interest in crypto assets continues to accelerate, attracting investors from all walks of life and from all over the world. In this episode, we are joined by Raoul Pal, CEO and Founder of Real Vision Group, and Global Macro Investor, and one of the earliest and most enthusiastic exponents of the crypto-asset space.

Raoul has many years of hands-on experience in both global macro and crypto assets, and offers critical insights on where investors should focus to maximize profits in both the near and long term.

• The top three investment themes for the next five to ten years
• Globalization, technology, aging demographics and the ‘Attention Economy’
• The miracle of the “India Stack”
• ‘Network Effects’ and behavioral incentives
• A new parallel financial system
• Fractional ownership of almost everything
• Incorporating Crypto into portfolios

Raoul shares in detail why he is so confident that crypto-assets and parallel financial systems will revolutionize our ability to conduct commerce safely and efficiently in the near future. In the end, he leaves listeners with a much-needed feeling of optimism about the road ahead.

Hosted by Adam Butler and Mike Philbrick of ReSolve Global.

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day.

“Drink once every time someone says "rebalancing", twice for "geometric", thrice for "ergodicity". Leverage these amounts by 2.7x for the full Kelly experience”. This was the opening salvo from our guest, the once anonymous author of the popular Breaking the Market Blog, now revealed as Matt Hollerbach (founder of Pronghorn Analytics).

With a background in mechanical engineering, he has applied his analytical and mathematical background to challenge a variety of once-sacred investment beliefs, generating thought-provoking articles that have prompted wide-spread discussion.

Our conversation included:

• Disillusionment after the Great Financial Crisis and delving deeper into the entropy of markets
• Geometric returns and rebalancing metrics, and why they matter
• The case for a faster and more frequent update of a portfolio’s underlying assumptions
• Efficient Frontier versus Geometric Frontier
• Similarities and Differences between Risk Parity and Matt’s Geometric Rebalancing approach
• Ole Peters, ergodicity and why stock markets should be “stochastically efficient”
• Adapting to the vol of vol
• Stress versus Strain
• Margin of safety and Kelly-optimal bet-sizing

Matt also explained the underlying mechanics of his strategy, and shared some of his favorite return metrics and other insightful concepts borrowed from various disciplines. If you’re planning on grabbing a drink to play along, make sure it’s not too strong.

Thank you for watching and listening. See you next week.

In this episode, we are joined by Michele Wucker, author of the international bestseller “The Gray Rhino” and the new book “You Are What You Risk”. She coined the term “gray rhino” for obvious, probable, impactful risks, which we are surprisingly likely but not condemned to neglect. The gray rhino has moved markets, influenced central banks, guided risk managers and business strategy, and made headlines as an important frame for the ignored warnings that let the Covid-19 pandemic get out of control. The metaphor was inspired by work early in her career when she sounded a warning about Argentina’s debt crisis, then reprised that warning with an early and successful argument for a pre-emptive haircut in the Greek debt crisis. She is founder of the Chicago-based strategy firm Gray Rhino & Company, speaks frequently to high-level global audiences, and is cited often in leading global media which recently have included The Wall Street Journal, The Economist, and the Washington Post.

We discussed:

• Five reasons decision-makers have for not addressing problems
• Making the “devil’s advocate” more prominent in the decision-making process
• Individual biases and how they define your “risk fingerprint”
• The “risk compass” and how it can help manage client risk tolerance
• The “Glass Cliff Phenomenon” and corporate crises
• The balance of left tail and right tail risk in group/family dynamics
• Thinking less deterministically and more probabilistically to get better outcomes
• Little “hacks” to help manage risk

Michele also shared real-life anecdotes of how using these methods have helped corporations/boards and families manage risk tolerance differences. She stresses repeatedly the usefulness of knowing the “risk fingerprint” of every member of the group, leading to significantly better outcomes.

We hope you enjoy this far-reaching and entertaining discussion. 

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day.

Interest in cryptoassets, and specifically Bitcoin, has skyrocketed in the last few years. From it’s humble beginnings Bitcoin has grown into a behemoth, leading some to wonder if it will eventually become a contender for the role of global reserve currency. Our guests for this episode were Greg Foss and Magdalena Gronowska, early adopters of Bitcoin and part of the team that launched the very first Canadian crypto ETF on the Toronto Stock Exchange. Our conversation covered:

• How the bond market wags the equity tail
• Why Bitcoin can become default protection on a basket of sovereign credit as national debts explode
• What Bitcoin is currently disrupting, from energy usage to gold, from the FED to the banking system
• What is money
• The “Honey Pot”
• Why now is a better time to invest in Bitcoin than 2016
• Spinoffs from Bitcoin mining, from energy to technology
• The solution for “Fiat Ponzi”

The discussion was enthusiastic, thorough and sometimes downright funny. We hope you enjoy this episode and look forward to you joining us again next week.