What's Your Prior?

Pension fund expert Ken Akoundi , CEO of Cordatius, speaks with me about how such massive portfolios are managed, the challenges they have with technology and their investment strategies. 

We start with a story that should terrify anyone with financial liabilities: the prospect that they might never end...

How can we use all the fascinating lessons about our hidden biases to actually make better investment decisions? What are the most common psychology and bias-based mistakes investors make, and how can behavioral economics help us avoid them?

Join me and Clare Flynn Levy, Founder and CEO of Essentia Analytics, as we discuss how her firm helps traders and portfolio manager identify and then reverse their worst habits. 

Mentioned in the show:

• Thinking Fast and Slow by one of the godfathers of Behavioral Finance, Dan Kahneman
• How to Decide by the amazing Annie Duke
• Think Again by  Adam Grant
• Nudge by Nobel Laureate and author Richard Thaler 
• Ray Dalio
• Michael Mauboussin, former chair of the board of trustees of the Santa Fe Institute

ESG is all about the data. My guests explore what people are doing with ESG data, how the data is sourced, and how investors can beat the market with ESG. My guests for this episode are:

• Lisa Conner, Head of North American Client Services at RIMES,
• Jeremy Baksht, Chief Growth Officer at Gourmet Growth, and
• Bill Haney, Chairperson at Alva  

Data is the lifeblood of investment research and of making investments that beat the market. This episode's guests are all data experts:

• Lisa Conner, Head of North American Client Services at RIMES,
• Jeremy Baksht, Chief Growth Officer at Gourmet Growth, and
• Bill Haney, Chairperson at Alva  

In this episode, I speak with our new Private Equity owner and our new CEO about the plans to bring Style Analytics into Investment Metrics:

• Frank Benford's (counter-intuitive) Law of first digits. Here's a more mathematical treatment of Benford's Law.
• Adi Filipovic, Managing Director of Private Equity Firm Resurgens Technology Partners
• Brent Burns, CEO of Investment Metrics
• Horizon Capital, which sold Style Analytics to Investment Metrics

Markets can be irrational a long time, and we've been witnessing that over the past few years with Value stocks underperforming Growth and Tech stocks. But the tide may have turned, and Kate Mead is here to help us understand why Value is doing well and should do well over the next several years.

Mentioned in the Show:

• My guest Kate Mead - Institutional Equity Portfolio Manager, MFS Investment Management
• John Maynard Keynes - British economist immortalized by his observation that "the market can stay irrational longer than you can stay solvent."
• David Aspell - Portfolio Manager at Mount Lucas Management
• My factor investing research partner Jim Monroe
• Our research on how factor perform in US Elections
• Intangibles and how to measure Value
• Mean Reversion - the most misunderstood and misinterpreted concept in investing.

Figuring out which companies will profit from ESG is all the rage, and my guest, Jacob Gemmel, has a promising approach: start with a fundamental Quality assessment of stocks and disqualify any company that does not have forward motion on improving ESG from both an operational and product perspective. Join me in learning how Swedbank Robur invests for the long term and turns upward ESG momentum into long-term outperformance.

Related links mentioned in the episode:

SwedbankRobur

Jacob Gemmel

UN Sustainable Development Goals

Briant Matthews LinkedIn

Briant Matthews Book

Briant Matthews Research

Morgan Housel LinkedIn

Morgan Housel blog

Morgan Housel book

Michael Mauboussin LinkedIn

Michael Mauboussin Website

Momentum traders make money violating the first principle of investing: previous performance is not indicative of future returns. As it turns out, what did well yesterday and the day before actually IS more likely to do well today. And Momentum traders, also known as Trend Followers, take advantage of that fact. But such trading, en masse, can lead to price bubbles. Join me and renowned Trend Follower Dr. Kathryn Kaminski as we explore how Momentum traders think about markets and when this strategy works the best.

Mentioned in this episode:

• Dutch Tulip Bubble
• Dr. Kaminski's book: Trend Following with Managed Futures
• MIT Professor Andrew Lo
• Stocks and Elections
• Markets' signals pre-Brexit

Pension Funds have to be very careful in picking fund managers - they often invest for the long haul and compounding returns are great if the returns are good, but the lost opportunity is painful if money is left on the table every year. Sweden's AP1, which manages 366B SEK (39B USD), has developed a robust and mature approach to selecting the best managers and I sat down with Majdi Chammas, Head of Equities at their External Partnership and Innovation team, to dig into what matters to them and why.

Mentioned in the show:

• AP1 - AP1's website is here and their LinkedIn profile is here.
• Majdi Chammas - you can find him on LinkedIn here
• TOBAM - you can find there website here and their LinkedIn profile here. 
• Bridgewater - you can find their website here. 
• ESG - here are links to some of Style Analytics' ESG services and our partner firms Sustainalytics, MSCI, ISS ESG and Trucost.
• Style Analytics

Value investing – buying stocks that the markets price below their intrinsic worth – is a time-honored and proven investment strategy. So why has it done some poorly over the past five years and especially now?  Growth investing is relatively newer and has been on a tear. Is there any reason to believe it would slow down?

Mentioned in this episode:

• Mount Lucas Asset Management
• Tim Rudderow and David Aspell
• Value and Growth Factor Investing
• Delta Airlines and Brinker International (trading under 'EAT')