Valuewalk's ValueTalks

Good morning listeners,

Today is a very special episode. I am here live with Jared Broad, the founder of Quantconnect. Jared and his team are building a platform for anyone wanting to build quantitative trading strategies and a marketplace for anyone to license their trading strategies using alpha streams. They have done the hard part by building the infrastructure for quantitative traders and a vibrant community to share and learn from each other. We discuss the Quantconnect platform, his story and experiences, and how Quantconnect got started. Below is an excerpt of our conversation about where engineers find inspiration.

“That is the beauty about having a big diverse community. If you understand philosophy and psychology, then you will be using your philosophy and psychology experiences to pull into your trading strategy. Maybe you’re a math grad and you will be using mathematical techniques and thinking about things with hard numbers. Everybody got different inspirations by their experiences. That is kind of the beauty of a community of people is that they all have different experiences and they come together to design it in the Quantconnect ecosystem.”

1:14 – Tell me how it got started. What was your background and what led you to create Quantconnect?

4:38 – Can you tell me more about your experience in Chile?

6:13 – How was the startup culture?

7:20 – What is Quantconnect and how are you guys different from

the others like Quantopian and Numerai?

9:07 – Can you tell me more about the LEAN program?

12:40 – Can you tell me more about the alpha streams and are your competitors doing anything similar to that?

15:36 – What are alpha signals and can you give examples and strategies that have generated alpha?

17:26 – How do you benchmark those signals?

18:30 – Where do engineers find inspiration for their strategies?

23:47 – Can you tell me about the Jupyter notebook?

26:20 – Do you personally subscribe to a particular investment philosophy and how would you characterize it?

28:33 – Do you seek any inspiration from others investors?

29:11 – What is your objective with Quantconnect?

30:03 – What are your favorite books?

You can find more information:

https://www.quantconnect.com/

Enjoy and thanks for the listen!

Good morning listeners,

Today is a very special episode. I have Toby Loftin, managing principal and founder of BP Capital Fund Advisors. We discuss the various parts of the energy sector like the value chain and end users. We also discuss his time with T. Boone Pickens. Below is an excerpt on his time with T. Boone Pickens.

‘I tell you what, the first day I got there, April 1st 2010, I was sitting at my desk and I was nervous and he came walking down the hallway to start the first investment committee meeting. As I heard him coming I popped up out of my seat, he stopped and looked me in the eye and said “are you making any money yet?” I said sir I am getting to it. That is what we are doing, we are preparing. He is constantly thinking about ways to profit and he is extremely committed to winning. In business he is committed to studying the energy markets and knowing it better than anyone else. He calls it being an inch wide and a mile deep. That is sort of what we are. You know his view is to outwork the competition, not necessarily by the amount of hours you work but by deep familiarity by your domain of expertise. Always do your homework. Be a good teammate and partner. Do what you say you are going to do. Trust your teammate and work together. It all comes together. Its like the fruit of the labor when it is genuine and that is how I describe Boone and the firm. He is also a great storyteller. You have probably seen him in different venues and man he can tell a story. He can deliver it with the best of them. He is also a great joke teller which he tells on air sometimes. In the office he is hilarious. He is better than anyone I know in terms of telling a joke. Some of the quotes he said that I love he said over the years. You can be “dead right and dead”. So timing and your level of exposure is crucial. The other one I love is “the best time to plant a tree was 20 years ago but if you didn’t the second best time to plant a tree is now.” So in other words start early and build carefully. That is what we have been doing for the last couple of years at Twinline and the new RIA, called BP Capital Fund Advisors.’

1:36 – How did you get started in the industry and what caught your interest?

3:38 – So you worked alongside T Boone Pickens, how was that experience and what are some key lessons you learned from him?

5:53 – How would you define and characterize your investment philosophy?

8:07 – How would you define and manage risk?

11:35 – What is BOON and how are you guys building a better energy ETF for investors?

15:45 – What is the problem with the other energy ETFs and how does BOON address those issues?

17:47 – Can you describe to me the energy value chain and the misconceptions?

21:40 – Can you talk more about the demand side and the companies you look for in the demand side?

24:40 – What are your favorite books?

25:57 – Closing thoughts

Enjoy and thanks for the listen!

Hello Listeners,

Today is a very special episode with Nassim Nicholas Taleb, author of the INCERTO. The INCERTO is a multivolume essay that includes The Black Swan, Fooled by Randomness, Anitfragile and most recently Skin in the Game. He spent 21 years as a quantitative trader and risk taker. Today is a very short episode about his most recent book, “Skin in the Game”. Below is an excerpt from our conversation.

Raul: What is the main premise of the book?

Nassim: You cannot look at my books anymore as body parts because they are a continuation of a project called Incerto and that would be volume 5 of the Incerto. A lot of people know Black Swan, Antifragile, and some like Fooled by Randomness. So its part of a project, the idea, and Antifragile is about the symmetry and there was some mental asymmetry at the end of Antifragile. The symmetry means someone has an option, I make money if I am right and lose very little if I am wrong, so volatility would benefit me. And of course, some people abuse that option by inflicting losses onto others, transferring losses unto others. So you make the upside and you transfer the downside unto others. So I thought about it at length and it hits me that there is something beyond the unfairness of the asymmetry. So let me present the idea of skin in the game in general. Skin in the game for a lot of economists is seen as incentives. So if you are incentivized you work harder. That is level one. That is not it. There has to be level 2 which actually presides this notion of incentives. The Hammurabi’s Law, if you cause harm to others, you ought to be penalized and compensate your victims. That is the idea. In others words I shall not hide risk. There is the story of the architect who built a house and of course can cut corners with something weak in the foundation and you immediately make your money. One day the house collapses. Well in the Hammurabi’s Law finds the architect punished. Of course there is various punishment depends on who is injured. So that level two means there is disincentive in the idea of skin in the game. But that is not enough…”

Enjoy and thanks for the listen!

Good Morning Listeners,

Today is a very special episode with Whitney Tilson. We talk about the early days of running a hedge fund with no prior experience, why he shut down Kase Capital, and why he launched Kase Learning. Whitney is a graduate of Harvard College and Harvard Business School. He previously managed T2 Partners and Kase Capital. Whitney also coauthored several books such as “The Art of Value Investing: How the World's Best Investors Beat the Market” and “More Mortgage Meltdown: 6 Ways to Profit in These Bad Times”, “Poor Charlie's Almanack”.

If you would like to attend any of the boot camps, we have a special discount code for Valuewalk readers! Please use Code: VW10 to receive 10% off and follow the link: www.kaselearing.com

Below is an excerpt about how Whitney started his fund.

“It was back in late 1998, late 90s in general, for the first time in my life, I had 10,000 bucks in my bank account. Necessity being the mother of invention, I wanted to know what to do with it. This was a few years after I graduated Harvard Business School, my wife was working in the city as a lawyer and we finally paid off all my debts and had a little bit of money in the bank. I remember calling Bill Ackman, who was a friend of mine from college, and asked him about investing. He said read all of Warren Buffet’s letters and that is everything you need to know. So I did and keep in mind the 90s was a decade long in a very long bull market and was a great time to be in stocks. Every stock I picked one up and said this is great, I am God’s gift to investing. In hindsight I was more of a bull market genius. It is sort of ironic because I see a lot of them today, 9 years into this bull market. After a couple of years making a lot of money, I remember the biggest winner was AOL back in the early days and made 6 times my money in that one year. That really convinced me that I was God’s gift to investing. In late 1998, the idea just struck me that I should follow in my friend, Bill Ackman’s footsteps, and start my own hedge fund. He at that point was managing his original fund, Gotham Partners and Bill and his partner, David Berkowitz, had grown from 3 million to maybe 500 million under management and were doing incredibly well. That was an inspiration for me as well. So I decided to hang out my shingle as the world’s smallest hedge fund about 6 weeks later. So 6 weeks after I decided to start my own fund, I had opened my doors. I had 3 investors and 1.1 million dollars under management of my own money, my parents, and my in-laws and that is how I started almost 20 years ago.“

1:14 – What led you down the hedge fund industry and why did you start your own fund?

3:29 – What were the early days like when you were launching your hedge fund?

10:49 – Did you have any mentors to learn business from in the early days?

12:01 – What lessons did you learn running your own hedge fund?

20:45 – How should you balance your time early on in your career and where should you spend it?

22:54 – What did you enjoy most about running your own fund?

24:27 – You recently closed down your fund, can you tell me what happened?

38:41 – What led to creating Kase Learning?

48:12 – Can you talk about the life lesson aspect of the boot camp?

54:08 – Can you tell me more about your experience with sleep deprivation and rebirth of ideas?

58:18 – If you were to go back in time when you first started your hedge fund, what would you have done differently with what you know now?

1:00:58 – Can you tell me more about the short selling conference and is this a good time to be short selling?

1:06:17 – What are your favorite books?

1:10:56 – What are your hobbies?

Enjoy and thanks for the listen!

Hello Listeners,

Today is a very special episode. I have Julie Nash Phd and Gabriel Thoumi. Both go over the Engage the Chain Case Studies. This is an excellent episode on the key points and key takeaways from these case studies.

2:29 – How did you get started in this industry and what captured your interest?

8:08 – Why did you choose this profession and what do you enjoy most about it?

11:38 – How do you define supply chain agricultural risk?

15:15 – You wrote 4 case studies, can you quickly go over all 4 of them? What were your findings? And which case studies have resonated most with investors?

26:46 – What can investors learn from these case studies? How can they incorporate in their models and investment process?

33:45 – What are the key takeaways from these case studies?

42:49 – Who are your mentors?

46:40 – What are your hobbies and what do you do outside of work?

48:57 – Closing thoughts

Enjoy and thanks for the listen!

Hello Listeners,

Today is a very special episode with John Reese, the founder and CEO of Validea.com. He has created a way to allow anyone to have access to the guru strategies based on some of the most successful investors of all time such as Warren Buffet, Peter Lynch, etc. In this episode, he discusses how the gurus were selected and what inspired him to create Validea.com.

1:16 – How did you get started in the finance and investment profession? What caught your interest?

7:26 – Do you have a favorite investor from the selection of gurus? Is there a particular approach from any of them that you like?

10:26 – Are there any strategies that surprised you? Are there any strategies that did well or did not as good as you initially thought?

12:38 – How would you describe your personal investment philosophy?

13:59 – With the Validea portfolio, it is pretty concentrated with 10-20 stocks, can you describe why is that?

16:43 – What are your views on portfolio concentration and diversification?

17:16 – What is your view on the value premium?

18:38 – What are your views on the small cap premium?

21:32 – What are your views on the momentum premium?

24:19 – With these factors, are there any attractive and when they would be the most effectively applied?

26:00 – How would you define mean reversion?

30:44 – Can you tell me about the guru ETF?

32:22 – Can you tell me about the Validea Legends? What was your objective and how is it accomplished?

38:25 – How do you define and measure risk?

40:44 – What are your favorite books?

41:25 – What are your hobbies?

42:24 – For angel investing, do you follow a particular philosophy or strategy?

Enjoy and thanks for the listen!

Hello Listeners,

Today is a very special episode. I have Eric Weiss the founder and chief investment officer of Blockchain Investment Group. This episode is packed with great nuggets. One takeaway I loved is “It is a lot easier to write a logical, thoughtful, intelligent white paper than it is to execute and build what it is you have just articulated even if you raised the capital”.

1:27 – How did you get started in finance and investments?

2:08 – What were your previous positions?

3:19 – What led you to blockchain and bitcoin?

4:23 – What is your investment philosophy and investment strategy that you follow?

11:59 –How do you go about selecting the managers and how do you know which strategies will perform the best?

15:13 – What are your thoughts and views on cryptocurrencies?

17:21 – What are your views on diversification and portfolio concentration?

24:52 – What excites you about this space?

27:18 – How do you manage the amount of new information in this space and how do you vet your informational sources?

34:42 – How would you define risk and is it defined differently in the crypto space?

42:53 – Can you briefly talk about that issue of scalability?

43:45 – What trends do you see in crytpocurrencies and what do you expect from this space?

49:36 – What are the most interesting ideas that you have found in this space?

52:27 – What are your favorite books?

54:18 – Where can people find more information on you and your work?

Enjoy and thanks for the listen!

Hello Listeners,

Today is a very special episode. I have both Daniel Bresler and Anthony Jew, members of Seward and Kissel's Blockchain and Crytpocurrency group, and we will be discussing about the various issues surrounding bitcoin futures.

1:31 – How did you guys get started in this field? What interested you in pursuing cryptocurrencies?

2:53 – What are bitcoin futures? How are they different from other futures?

5:19 – Are bitcoins commodities?

5:34 – Is there a need for bitcoin custodians?

6:44 – How is the CFTC regulating the bitcoin futures?

7:43 – What are the limits to the CFTC’s enforcement on bitcoin futures?

9:03 – Can you describe the valuation methodologies of the CME and CBOE bitcoin futures and how they differ?

12:45 – How do they affect different types of investors?

17:19 – What should institutional and retail investors be aware of?

19:14 – What are the potential headwinds for regulations of bitcoin futures?

20:17 – What are your favorite books?

21:32 – Are there any papers or online articles that you found useful understanding of blockchain that you would recommend?

Enjoy and thanks for the listen!

Hello Listeners,

Today is a very special episode with Kip Meadows. We discuss various topics about ETFs and more.

1:24 – How did you get started and why did you choose this industry and profession?

2:10 – What drew you to the industry?

2:47 – What is your role specifically and what is a typical day like?

4:57 – What is the white label ETF space?

6:57 – Why did you want to get involved with the ETFs?

7:58 – What opportunities lie ahead and what challenges do they face?

10:03 – What trends do you see in the ETF industry?

12:16 – What do you look for when you help launch an ETF?

15:23 – If someone has an idea for an active ETF, how best should they prepare?

17:23 – What is your investment philosophy and strategy?

20:20 – How do you define risk and manage it?

22:03 – What are your favorite books?

23:51 – What are your hobbies and what do you like to do in your spare time?

Enjoy and thanks for listen!

Hello Listeners,

Today is a very special episode. I have Kevin Quigg who is the chief strategist at ACSI funds and Exponential ETFs. Today we cover a wide variety of topics in the ETF industry.

What I learned:

- It is easy to become complacent during times of conventional wisdom

- It is more than alpha, you should strive to help investors meet their goals

- Customer satisfaction and the utilization to see which companies will outperform

1:20 – How did you get started in this career and what inspired you to pursue it?

2:46 – What drove you towards the ETF space?

5:32 – How do you educate investors now?

7:19 – How do you describe the customer satisfaction?

13:18 – Can you go more into the history

18:59 – How do you know if you are capturing trend versus phenomena?

26:39 – What is your investment philosophy?

30:32 – What are your favorite books?

32:20 – What are your hobbies outside of work?

Enjoy and thanks for the listen!