Eric Crittenden - "It's Not Fear and Greed that Drives the Investment World; It's Envy" | #14
Episode 14 is easily one of our most interesting so far. While there’s great content about trend following, Eric and Meb also delve into the psychological side of investing. There’s a fascinating tension between what people say they want from investing, versus what they actually do. For instance, investors say that want diversification, but very few, in practice, are willing to implement a truly diversified portfolio. Why? The psychological trauma that people experience when they diversify (and watch parts of their portfolio draw down) is simply too painful.
Key Points
- Trend following is an investment approach that aims to invest in markets that are going up and either be out or sell markets that are going down.
- Managed Futures is a strategy that applies trend following across a wide range of asset classes, aiming for diversification by being both long and short in various global markets.
- The Capitalism distribution study revealed that a small percentage of stocks account for the majority of stock market gains, highlighting the importance of avoiding underperforming stocks to enhance compounded returns.
Resources: Longboard Mutual Funds “The Capitalism Distribution” – BlackStar “Defense Wins Championships” – Eric Crittenden “Bump the Bell Curve” – Cole Wilcox “Discipline Trumps IQ” – Eric Crittenden “Lesson in Risk Management from the Valeant Investment Saga” – Ross Hendricks
Chapters
| 0:00 | |
| 8:46 | |
| 15:15 | |
| 23:10 | |
| 27:55 | |
| 32:10 | |
| 38:24 | |
| 41:49 | |
| 44:42 | |
| 51:02 | |
| 53:31 |
Transcript
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