This week on Weighing the Risks we are joined by Chris Davis, Chairman and Portfolio Manager at Davis Funds. Chris C. Davis joined Davis Advisors in 1989. He has more than 37 years experience in investment management and securities research. Mr. Davis is a Portfolio Manager for the Davis Large Cap and Financial Portfolios. He is a member of the research team for other Portfolios. Mr. Davis received his M.A. from the University of St. Andrews in Scotland.

Key Takeaways

• [04:16] - Chris’ professional background and more on his work at Davis’ Advisors
• [08:03] - How does Chris define risk and how does he think advisors and investors should think about it?
• [11:30] - Given the backdrop of enhanced volatility, how should investors weigh and think about the headlines versus the fundamentals of a company?
• [18:27] - What are some key indicators that Chris monitors for the health of the financial sector, as well as the broader economy? Also, the yield curve recently inverted. Is that a warning sign or another false signal?
• [24:16] - Might cryptocurrencies and stable coins disrupt credit card companies and how they generate fees?
• [34:47] - What does Chris think is in store for the financial sector for the rest of the year, as well as the years ahead?
• [39:55] - Does Chris have any advice that he thinks advisors and investors should really think about right now?
• [47:01] - Base case economic outlook and how probable Chris thinks this is
• [50:35] - Bad case economic outlook and how probable Chris thinks this is
• [55:43] - Good case economic outlook and how probable Chris thinks this is
• [62:37] - Are there any other risks that Chris thinks investors and advisors should be considering right now?
• [66:45] - Does Chris have a book recommendation for this particular time in the markets and economy?

 Quotes

[09:33] ~ “If I was to put it purely in financial terms, to me risk is the permanent loss of purchasing power over the contemplated investment time horizon. So, it’s that permanent, and substantial, loss of capital. We measure that not just in terms of the dollar amount that we start with, but the purchasing power of that. That’s not been a relevant distinction in the last twenty or thirty years of low inflation, but I came of age in the 70s where your purchasing power might have been degrading 13-15% a year. So, we really think about that idea of the degradation of purchasing power, overtime, as really sort of the central tenant when we make an investment decision…” ~ Chris Davis

[33:41] ~ “I think this march of technology in financial services is super exciting. My prediction in the short-term, and I’ll say short to mid-term - in the next five years, is that it makes the largest companies more valuable and more profitable. It increases scale advantages, which didn’t exist in financial services for most of the last fifty years, there’s real scale advantages now…longer term I think there may be bigger risk [though].” ~ Chris Davis

Links

• Davis Advisors on LinkedIn
• “Gotta Serve Somebody” (Cover) - Muscle Shoals Fundraiser
• Davis Funds

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s)

Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 1200-R-25114

This week on Weighing the Risks we are joined by Grant Engelbart, Vice President, Investment Strategist at Carson Group. Grant Engelbart serves as Vice President, Investment Strategist for Carson Group. In this role, Grant is part of the team responsible for the management of the Carson Investment platform, In-house Carson model portfolios, and contribution to the overall asset allocation viewpoints of the investment team. Before joining Carson, Grant was the Deputy CIO of ETFs and SMAs at Brinker Capital Investments (part of Orion Advisor Solutions). At Brinker, Grant was part of the discretionary investment team responsible for many assets across investment vehicles, and managed accounts ranging from individual 401ks to large university endowments. Prior to joining Brinker Capital Investments, Grant held positions at CLS Investments (which has since rebranded to Brinker Capital Investments), TD Ameritrade, and State Street Corporation. Grant received his Bachelor of Science in finance from the University of Nebraska at Lincoln. He is a CFA® Charter holder, holds the Chartered Alternative Investment Analyst (CAIA) designation, DACFP Certificate in Blockchain and Digital Assets, Candriam Certificate in Sustainable and Responsible Investing and Series 65 registration. He is a member of the CFA® Society of Nebraska and the CAIA Chicago chapter. He has contributed to numerous publications and is an active contributor to commentary related to the ETF industry. Grant has three young children with his wife Jessica. He’s passionate about any University of Nebraska sports team, golf, basketball and most outside activities. He is actively involved in his local church and other Omaha-based organizations. Grant Engelbart is not registered with Cetera Advisor Networks LLC.

Key Takeaways

• [03:00] - Grant’s professional background and more on his current role at Carson Group
• [06:07] - Many of the “Bro Bubble” members are meaningfully off their highs. Why has sentiment shifted so drastically in just one quarter? Are these meme stocks a pump and dumb type scheme fueled by the second coming of Wall Street Bets?
• [07:50] - Will the “Bro Bubble” popping kick off a broader market shift or is it just an example of the air coming out of some of the bad momentum names?
• [09:25] - Does Grant think the bubble did pop for the “Bro Bubble” names or did it just lose a little layer? Could these potentially re-inflate and, if so, what are the catalysts needed for this re-inflation to occur?
• [11:20] - What are some of the catalysts encouraging the outflow from the “Bro Bubble” stocks into international markets and might this trend continue?
• [13:47] - How should advisors think about positioning their portfolios in light of the Trump administration's commitment to sweeping policy changes?
• [18:37] - Base case market scenario, it’s impacts on the Bro Bubble and how probable Grant thinks this outcome is
• [20:57] - Bad case market scenario, it’s impacts on the Bro Bubble and how probable Grant thinks this outcome is
• [23:07] - Good case market scenario, it’s impacts on the Bro Bubble and how probable Grant thinks this outcome is
• [25:32] - Are there any other risks our listeners should be considering?

 Quotes

[09:29] ~ “At a certain point because of Deepseek, which is one the early catalysts for this  in some ways, the vulnerability to AI names, which not all these Bro Bubble names are not AI plays per se, but there's involvement there. Then the relationship with the Trump White House, and whatever was happening post election for these names, I think both of those have created an environment where you can’t price Palantir at 240x earnings….I wouldn’t say [there has been]...a complete, utter, ridiculous pop, but there’s an adjustment to a more realistic expectation for these companies going forward. ” ~ Grant Engelbart

[12:22] ~ “The trend reversal in international stocks is really important, emerging markets is part of that as well, and we have brought our emerging market and international stock weights back to neutral, it was underweight for a period of time, mostly due to the dollar strength. They have potentially fiscal tailwinds behind them now, inflation is in a better place in many cases and then there’s a valuation tailwind for international stocks in a big way as well, so…that’s definitely an area to keep, at a minimum, at neutral weight in your portfolios.” ~ Grant Engelbart

Links

• Grant Engelbart on LinkedIn
• Carson Group
• Economic Outlook
• Insights
• “Sirius” by The Alan Parsons Project

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s)

Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 0950-R-25091

This week on Weighing the Risks we are joined by Dan Davidowitz, lead Portfolio Manager of Polen Capital's Focus Growth strategy. Dan is lead Portfolio Manager of Polen Capital's Focus Growth strategy. Prior to joining Polen Capital in 2005, Dan spent five years as Vice President and Research Analyst at Osprey Partners Investment Management. Previously, Dan spent one year as a Research Analyst at Value Line, Inc. and five years in the health care sector, holding various analytical positions at Memorial Sloan-Kettering Cancer Center. Dan received a B.S. with high honors in Public Health from Rutgers University and an M.B.A. from the City University of New York, Baruch College Zicklin School of Business. Dan is a CFA® charterholder and a member of the CFA Institute and the CFA Society of South Florida.

Key Takeaways

• [02:23] - Dan’s professional background and more on his current role at Pollen Capital
• [04:57] - How does Dan define risk and how does he think that advisors and investors should think about it?
• [06:14] - What risks keep Dan up at night and what guardrails, and indicators, does he keep an eye on as signals to protect against a bad market environment?
• [08:53] - What does Dan think about earnings growth for companies going into 2026 and beyond? Would an earnings growth contraction, or just deceleration, hurt the higher flying stocks?
• [11:51] - Have any of the recent developments in AI, and large language models, shifted Polen’s investment thesis in the space?
• [16:34] - Where is Dan seeing opportunities abroad and what does he think of China?
• [18:55] - How does Polen’s quality tilt flavor the opportunities that Dan sees the market presenting? What pockets of the market are getting him really excited at the moment?
• [22:37] - Base case market scenario and how probable Dan thinks this is
• [24:10] - Bad case market scenario and how probable Dan thinks this is
• [27:39] - Good case market scenario and how probable Dan thinks this is
• [32:23] - Are there any other risks that Dan thinks our listeners should be considering?

 Quotes

[09:27] ~ “What’s extraordinarily consistent about corporate America’s earnings growth, is overtime it does tend to kind of smooth out to around 6% or 7% earnings growth through cycles…for the S&P500, and then you put dividends on top of that, and that’s how you get the return of the S&P500 overtime. Our portfolio is not too much different than that, except the levers are a little bit different. So, our companies are growth companies, they don’t really pay out a lot of dividends, so we don’t get much of our returns from dividends, if at all. But, the earnings growth of our portfolio is significantly faster.” ~ Dan Davidowitz

[14:18] ~ “Every time there’s been a big technological transformation, it starts with hardware and then you have services and applications built on top of that hardware that eventually become the real value creating stuff…like the Amazons and Googles that were built on the broadband internet, we’re going to have something similar with generative AI. You’re going to have native Gen AI businesses, and also generative AI add-ons to existing businesses that are going to be value creative. Polen Capital is looking more toward that later group. We want to be part of the services and applications that have long-term, durable recurring revenue that will last a long time…but we are not looking to play the cyclical hardware so to speak.” ~ Dan Davidowitz

Links

• Dan Davidowitz on LinkedIn
• Polen Capital
• “Spoonman” by Soundgarden

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s)

Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 0564-R-25058

This week on Weighing the Risks we are joined by Sam Rines, Macro Strategist at WisdomTree. Samuel Rines is a Macro Strategist at WisdomTree, where he extends the firm's custom model portfolio management capabilities. Before joining WisdomTree in 2024, he was the Managing Director at CORBU, LLC, leading the PolyMacro advisory product. With over a decade of experience in economics and finance, Samuel has held significant roles such as Chief Economist at Avalon Investment & Advisory and Economist and Portfolio Manager at Chilton Capital Management LLC. He is also the author of "After Normal: Making Sense of the Global Economy," and holds a Master’s degree in Economics from the UNH Peter T. Paul College of Business and Economics, as well as having studied Economics at the University of Oxford.

Key Takeaways

• [03:01] - Sam’s professional background and more on his current role at WisdomTree
• [04:39] - How does Sam define risk and how does he think advisors and investors should think about it?
• [06:08] - Should we be most concerned about the frequency or severity of cyber attacks, or some combination of the two? How do they affect the global economy and market stability over all?
• [09:18] - Why do the markets often seem to shrug off seemingly massive cyber attacks (e.g. the Equifax breach)? Would it take a major attack on financial institutions to impact the broader stock market?
• [11:12] - Are there any big trends in cyber security that could affect future risks, as well as investment in this industry going forward?
• [12:27] - In the cyber security space, what are some potential technological breakthroughs or disruptions that might stand out?
• [14:37] - Is investing in cybersecurity stocks an effective hedge against cybersecurity risks?
• [17:17] - Base case market scenario for cybersecurity and how probable Sam thinks this is
• [19:03] - Bad case market scenario for cybersecurity and how probable Sam thinks this is
• [20:58] - Good case market scenario for cybersecurity and how probable Sam thinks this is
• [22:23] - What other geopolitical risks does Sam think listeners should be thinking about and considering? Also, learn more about the geopolitical, risk-aware portfolios his team has built
• [27:23] - How would Sam compare and contrast their three model portfolios?

 Quotes

[04:39] ~ “I define risk as what is the probability of being wrong and how does that effect my portfolio vis-a-vis whatever your benchmark you might have, whether it’s a Nasdaq type benchmark, whether it’s an S&P 500 benchmark…It’s…what’s the downside risk to either not having something in the portfolio or putting it into the portfolio. ” ~ Sam Rines

[07:55] ~ “Cloudflare, and the shutdown that we had for basically half a day or a day…what’s interesting about that is it wasn’t even a hack, right? It was just an update that went wrong, and I think that was really more of a warning to people that if you have a significant hack that affects something that’s a base layer of US, and to a bit of an extent, Global technology, you could have very significant economic effects very quickly across parts of the economy that people probably didn’t think were vulnerable to a cyber attack.” ~ Sam Rines

Links

• Sam Rines on LinkedIn
• WisdomTree
• “We Didn’t Start the Fire” by Billy Joel

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s)

Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 0316-R-25031

This week on Weighing the Risks we are joined by Corey Hoffstein, Chief Executive Officer and Chief Investment Officer at Newfound Research. Newfound Research LLC is a quantitative investment and research firm dedicated to helping investors pro-actively navigate the risks of investing through thought leadership and investment acumen. At Newfound, Corey is responsible for portfolio management, investment research, strategy development and communication of the firm’s views to clients. Corey holds a Master of Science in Computational Finance from Carnegie Mellon University and a Bachelor of Science in Computer Science, cum laude, from Cornell University.

• [03:35] - Corey’s professional background and what led him to his current role?
• [05:12] - How does Corey define risk and how does he think advisors and investors should think about it?
• [07:51] - Has Corey ever seen someone try to measure “human capital risk?”
• [09:53] - How would Corey define a bubble, and what is a bubble more broadly?
• [11:30] - Does the overall growth in ETF assets under management indicate a stock market bubble or an ETF vehicle bubble? If not, are there other indications we could be in a stock market bubble right now?
• [19:58] - Is the recent  popularity of  actively managed ETFs a sign that active management might finally have its day in the sun again?
• [27:33] - What is return stacking and what are its potential benefits, and risks, for investors?
• [34:58] - How can advisors and investors diversify their investment process and timing, in addition to just the assets themselves?
• [43:33] - Base case economic scenario and how probably Corey thinks this scenario is
• [50:22] - Bad case economic scenario and how probably Corey thinks this scenario is
• [53:00] - Good case economic scenario and how probably Corey thinks this scenario is
• [58:17] - What does Corey see for the ETF industry and quant investing in its evolution in the coming years, especially in conjunction with AI?

 Quotes

[05:25] ~ “In the world of finance, where I have ultimately come down on risk, is: it’s not volatility, it’s not drawdown [and] it’s not these other potential statistical measures. I think the risk that’s most relevant to most investors, generically, is just the risk of meeting their financial goals. ” ~ Corey Hoffstein

[09:53] ~ “I think my tongue-in-cheek answer to this would be, a bubble is something we all collectively regret investing in afterwards. In real time, a better answer would just be, [a bubble is] when price far exceeds fundamentals and/or the utility of something.” ~ Corey Hoffstein

Links

• Corey Hoffstein on LinkedIn
• Newfound Research
• “Money in the Way” by 2 Chainz

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s) - Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 3235-OPS-12/18/2024

This week on Weighing the Risks we are joined by Jan van Eck, Chief Executive Officer at VanEck. Mr. van Eck joined the Firm in 1991 and was added to the Executive Management Team in 1998.  In 2010, he was named President and Chief Executive Officer of Van Eck Associates Corporation. Additionally, he is the President and CEO of Van Eck Securities Corporation. Mr. van Eck is a Trustee and the President and Chief Executive Officer of VanEck ETF Trust, VanEck Funds and VanEck VIP Trust. Mr. van Eck has spearheaded the launch of multiple innovative mutual funds, ETFs, and institutional vehicles spanning asset classes and strategies. Mr. van Eck founded the Firm’s ETF business in 2006.   Through a series of business acquisitions, partnerships, and global product development over the last decade, the ETF business is one of the largest globally with offerings domiciled in the U.S., Europe, and Australia. Mr. van Eck holds a JD from Stanford University and graduated Phi Beta Kappa from Williams College with a major in Economics. Mr. van Eck is a member of the USC Marshall School of Business Board of Councilors and the Board of Trustees of Williams College. He is a former member of the National Committee on United States-China Relations. He routinely appears in the media, including CNBC and Bloomberg Television. Mr. van Eck was a 2013 Finalist for Institutional Investor's Fund Leader of the Year and was the recipient of ETF.com’s 2024 Lifetime Achievement Award. The firm was named 2020 ETF Provider of the Year by Fund Intelligence.

Key Takeaways

• [02:16] - Jan’s professional background and more on the history of VanEck.
• [03:32] - How does Jan define risk and how does he think investors and advisors should think about it?
• [04:01] - An overview of what tariffs are, how they are implemented and how they effect prices and consumption.
• [07:20] - What might these new tariffs mean for the US economy?
• [08:47] - If tariffs lead to inflation and are sticky, how should investors prepare? Should we consider diversifying our portfolio set?
• [11:08] - Are there any areas in the US market that could benefit from tariffs?
• [12:31] - More broadly, how does Jan think these tariffs will impact the US Dollar, as well as investments both domestically and internationally?
• [15:30] - Base case for tariffs and how these policies will affect the greater economy. How probable does Jan think this scenario is?
• [29:57] - Good case scenario, from a pro-tariff perspective, and how probable Jan thinks this scenario is.
• [33:48] - Are there any other risks, opportunities or key themes our listeners should be considering?

 Quotes

[04:17] ~ “What [tariffs] are is a tax that’s applied to either commodities, or finished goods, that come into the United States…because the [Smoot-Hawley Tariff Act] happened right before The Great Depression, people think very bad things about tariffs…[but] the volume of trade actually didn’t change that much, it’s just that we were going through a significant period of disenflation or deflation.” ~ Jan van Eck

[15:53] ~ “To me  the big elephant in the room, when it comes to talking about markets these days, is the fact that the US…Federal spending is absolutely out of control…I know many people talk about this, but it’s sort of the elephant that’s invisible because the US economy and the markets have been doing so well, but that does not mean that it’s not an elephant and it’s really going to effect things.” ~ Jan van Eck

Links

• Jan van Eck on LinkedIn
• Jan van Eck on Twitter
• “Walking on Sunshine” by Katrina & the Waves
• VanEck

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s) - Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 3105-OPS-12/4/2024

This week on Weighing the Risks we are joined by Matt Osowiecki, Co-Chief Investment Officer at Water Island Capital. Mr. Osowiecki joined Water Island Capital 2007 and currently serves as Co-Chief Investment Officer of the firm. Prior to being elevated to Co-CIO in 2024, he served as a Portfolio Manager on the merger arbitrage strategy, and he continues to serve as a named Portfolio Manager on several of the firm’s funds. He has been a Portfolio Manager for the Arbitrage Fund since June 2016 and a Portfolio Manager for the Water Island Event-Driven Fund since September 2023. Prior to being promoted to Portfolio Manager, Mr. Osowiecki worked as a Senior Research Analyst on the merger arbitrage team at the firm. Prior to joining the firm, Mr. Osowiecki worked in the Investment Product Division of The Hartford and as a project manager in commercial real estate development. Mr. Osowiecki received a BS from the University of Connecticut.

Key Takeaways

• [02:03] - Learn more about Matt’s professional background and his work at Water Island Capital.
• [03:21] - How does Matt define risk and how does he think advisors and investors should think about it?
• [04:22] - What are some of the various Event Driven Strategies? How do Event Driven Strategies differ from Merger Arbitrage strategies?
• [08:42] - What are the main risks of Event Driven Strategies. Also, has a more aggressive FTC made those risks work? Lastly, what are the implications of her, or a new head of the FTC, for the Event Driven space?
• [15:32] - What are some of the drivers for the strong Q4, and specifically December, returns that Event Driven Strategies seem to foster.
• [16:24] - It is difficult to put Event Driven Strategies into an ETF strategy - how did they accomplish this at Water Island Capital?
• [18:41] - How do Event Driven Strategies dampen volatility in a conventional stock/bond portfolio?
• [20:40] - Base case market scenario and how probably Matt thinks this is.
• [21:40] - Good case market scenario and how probably Matt thinks this is.
• [22:37] - Bad case market scenario and how probably Matt thinks this is.

 Quote

[08:42] ~ “The main risk [for] Event Driven Strategies, the obvious one, is that the event doesn’t play out the way the investor anticipates. I don’t want to say it just doesn’t occur, because it is always possible to bet against an event occurring, but the main risk again is that the investor is positioned the wrong way for the outcome of the event.” ~ Matt Osowiecki

Links

• Matt Osowiecki on Linked In
• “Enter Sandman” by Metallica
• Water Island Capital

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s) - Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 2897-OPS-11/12/2024

This week on Weighing the Risks we are joined by Fritz Folts from 3EDGE Asset Management. Fritz has over 20 years of experience at the investment committee level in the investment management industry. He was one of the co-founders of 3EDGE Asset Management, where he serves as the Chief Investment Strategist and Member of the Investment Committee.

Prior to 3EDGE, Fritz was one of the first team members at Windward Investment Management, a pioneer in constructing globally diversified portfolios utilizing index Exchange Traded Funds (ETFs). After the acquisition of Windward by Charles Schwab in 2010, the name of the firm was changed to Windhaven Investment Management. Fritz became responsible for distribution of Windhaven's investment solutions throughout the entire Charles Schwab nationwide retail branch network. He and his team raised over $15 billion in new assets under management. Later, Fritz was named Chief Investment Strategist at Windhaven. He began his career at The Boston Company, where he ultimately served as Vice President, and Director of Global Funding for the then-newly-formed Boston Safe Deposit & Trust Co. (U.K.) Ltd., in London, England. Fritz received his B.A. with a major in Political Science from Connecticut College and his MBA from IESE (Instituto Estudios Superiores de la Empresa), a bilingual Spanish - English MBA program in Barcelona, Spain. He is the former Chair of the Board of Trustees at Connecticut College and now serves as an Emeritus Trustee. In addition, Fritz currently serves on the Investment Committee for the Connecticut College endowment fund and the Investment Committee for the Umbrella Center for the Arts in Concord, MA. Fritz and his wife Cathy live in Concord, Massachusetts.

Key Takeaways

• [02:44] - Learn more about Fritz’s background and his work at 3EDGE.
• [05:48] - How does Fritz define risk and how does he think advisors and investors should think about it?
• [09:47] - Does Fritz think we should anticipate any more election cycle surprises or does he think we’ve likely already seen all the surprises?
• [11:35] - Are “internal” or “external” October surprises more destabilizing for the market in Fritz’s opinion?
• [13:03] - Might October surprises be more damaging to newer candidates, as opposed to more established candidates?
• [15:50] - What kind of cognitive biases do October surprises build upon?
• [17:27] - How might the parties prepare for an October surprise? Also, have October surprises lost some of their power because they are expected?
• [21:28] - Base case market and election scenario and how probable Fritz thinks this is.
• [23:52] - Good case market and election scenario and how probable Fritz thinks this is.
• [27:05] - Bad case market and election scenario and how probable Fritz thinks this is.

 Quotes

[06:06] ~ “We [at 3EDGE] look at risk a bit differently, because we believe that incidence of extreme market events occur more often than you might anticipate if you use standard risk management models. [This is] because those models tend to employ normal distribution, or bell curves, to manage risk…We consider the global markets to be a complex system of interrelated variables and if you have that philosophy, or premise, then you would not use a normal distribution.” ~ Fritz Folts

[18:58] ~ “So, in terms of [October surprises] losing their potency, yeah I do think that to the extent the public has become almost numb to extraordinary events in the world…it just seems that the nation and the electorate is so divided, with each side so firmly entrenched in their camps, that [an] October surprise would almost serve to just strengthen each sides commitment to their own candidate…particularly in the presidential election.” ~ Fritz Folts

Links

• Fritz Folts on LinkedIn
• “Suffragette City” by David Bowie
• 3EDGE Asset Management
• Cow in a Boat by Michael John Mariano
• 3EDGE Fact Sheets
• 3EDGE Market Commentary

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s) - Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 2529-OPS-10/1/2024

This week on Weighing the Risks we are joined by Raj Udeshi, Founder of FarmClub and, previously, the founder of Hidden Levers. As a serial entrepreneur, Mr. Udeshi has a history of bootstrapped success. Now fully immersed in a 1,400-acre pistachio farm for the past 4 years, Mr. Udeshi has turned his attention to the things that matter most – security for food, water, and energy. Before entering the agriculture sector, Mr. Udeshi was Founder and CRO of a HiddenLevers, a fintech platform which was acquired after 11 years in business (acquired by Orion in 2021). Mr. Udeshi stayed on as Chief Innovation Officer and then transitioned into farming. He is now the Founder and Managing Member of FarmClub, a nascent agriculture innovation incubator in Central Valley, California. Mr. Udeshi received a JD from Pepperdine School of Law and a BA from Northwestern University, with work experience in appellate law, sales + trading, fintech, new media, and visual arts. 

Key Takeaways

• [03:16] - More on Raj’s background and his work at Hidden Levers.
• [11:56] - Learn more about FarmClub, the new agriculture company that Raj founded.
• [16:16] - Learn more about the Hidden Levers’ war room webinars. How did Raj create these and what were they designed to do?
• [22:47] - How does Raj define risk and how does he think advisors and investors should think about it?
• [26:14] - What about a potential civil war is so compelling to Raj?
• [29:51] - How would Raj define civil war, in all its potential permutations, in current times?
• [38:00] - Might the US debt be the powder keg or catalyst for a “civil war” type event?
• [45:47] - What would it take for the US to lose its status as the reserve currency?
• [49:37] - Could all of the political unrest be a potential way of deleveraging and growing our way out of debt?
• [65:21] - Base case market scenario for the election year and how probable Raj thinks this is.
• [71:12] - Good case market scenario for the election year and how probable Raj thinks this is.
• [82:35] - Ugly market scenario for the election year and how probable Raj thinks this is.
• [88:24] - Are there any other risks that advisors and investors should be considering right now?

 Quotes

[23:27] ~ “Now, I’d say we are in a different era, we’re definitely in a stock picker’s era. Fundamentals matter way more. I’ve noticed just how much equities react on the day of earnings, up and down, just way more than the first 20 years of my career. So, maybe it’s a more fundamentals market now and macro matters less, or it’s just quickly put to the side…and I do agree with the comment that is commonly heard in finance, which is, the biggest risk is being out of the market - right? Over a 20 year period, over a long horizon, the biggest risk is being out of the market, not having something at risk. ” ~ Raj Udeshi

[35:03] ~ “You know The Fed looks a lot at winter, and non-consumption during winter, because people aren’t driving, people aren’t vacationing, they’re not doing those things. So, if there’s a serious amount…a pervasive or scaled violence, what I’d say is I’d be afraid of societal non-participation…people not going out to the movies, eating dinner [etc].” ~ Raj Udeshi

Links

• Raj Udeshi on LinkedIn
• [email protected]
• “Harvest Moon” by Poolside (Neil Young Cover)

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s):

Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org. 

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 2129-OAT-8/20/2024

This week on Weighing the Risks we are joined by David Lundgren, Founder and Chief Market Strategist at MOTR Capital Management and Research and Portfolio Manager at Little Harbor. David has more than three decades of investment industry experience, with a focus on technical analysis strategies, particularly momentum and trend following. He is the former Director of Technical Research at Wellington Management, where he was also a Managing Director and portfolio manager with extensive experience managing global long-only and US long-short portfolios. David also held senior analyst positions at Fidelity & Thomson Financial. In addition, he has started several research and investment firms, including hedge fund Lyceum Capital, Breakaway Research, and most recently MOTR Capital Management & Research, Inc. He is also the portfolio manager of a private long short momentum & trend following hedge fund. David taught a graduate level Technical Analysis course at Brandeis International Business School, in Waltham, MA (June 2015-June 2020), where he received the 2015 Excellence in Teaching Award in his first year. He is a Chartered Market Technician (CMT) and Chartered Financial Analyst (CFA) dual charter holder, and a member of CMT Association’s board of directors. He launched and Co-Hosts “Fill the Gap”, CMT Association’s official podcast. David is a graduate of Babson College (1988), with a finance and investments dual major.

Key Takeaways

• [03:41] - David’s professional background and what he is focused on in his current roles.
• [08:23] - How does David define risk and how does he think investors and advisors should think about it?
• [13:07] - What is the momentum factor, how is it classically defined and how does David’s definition differ, if at all, in practice?
• [21:50] - Does momentum work for taxable investors if portfolio turnover is too high?
• [23:18] - How have machine learning and AI algorithmic trading shifted how momentum operates, as well as how it presents itself in the market?
• [26:53] - When you see parabolic moves, they often go a lot longer and higher than people expect but once they stall they often plummet, rather than plateauing. What does David think about this?
• [30:27] - Based on current market conditions, does David think we are in a bit of a momentum bubble and how is he accounting for this in his strategies if so?
• [36:03] - Various market scenarios and how David would adjust them, if at all.
• [39:36] - Bad case scenario for momentum investing and how probable David thinks this is.
• [43:27] - Good case scenario for momentum investing and how probable David thinks this is.
• [45:08] - Are there any other risks that investors should be considering in the current market environment?

 Quotes

[04:40] ~ “It’s the combination of momentum and trend that I think is the real home run, if you will, because momentum is…a very valuable input to the investment process, but it also has a lot of problems with it. Then there’s trend following, which is also a very powerful input to any investment process, but it also has its problems…What I find is when you put them together, they emphasize each other’s strengths, but they also fill the holes of each other’s weaknesses.” ~ David Lundgren

[19:20] ~ “Once you make a decision in a portfolio, there’s only four things that can happen from there. You can either make a little, you can lose a little, you can make a lot or you can lose a lot. The truth is, if we are being honest, the only one of those four things that we can control, is we can prevent ourselves from losing a lot of money and then the rest of it is up to what the market is willing to give us.” ~ David Lundgren

Links

• David Lundgren on LinkedIn
• MOTR Capital Management and Research
• “Not Afraid” by Eminem
• David Lundgren on Twitter
• Fill the Gap Podcast
• Jesse Livermore’s Book
• Nicolas Darvas’ Book
• William O’Neill’s Book
• Vivaldi’s Winter
• “Hate To Say I Told You So” by The Hives

Connect with Us

• Meet Rusty Vanneman, Orion’s Chief Investment Officer
• Check Out All of Orion’s Podcasts
• Power Your Growth with Orion

Disclosure(s) -Wealth Management services are offered by Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor. Orion Portfolio Solutions, LLC is a wholly owned subsidiary of Orion Advisor Solutions, Inc. (“Orion”)

Access to the services presented is provided solely as a service to financial advisors. Orion Risk Intelligence does not make recommendations or determine the suitability of any security or strategy. Past performance of a security or strategy does not guarantee future results. Orion Risk Intelligence research and tools are provided for informational purposes only. While the information is deemed reliable, Orion Risk Intelligence does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use.

Compliance Code: 1891-OAT-7/30/2024