Cole Wilcox on The Power Law of Investing | #584
Today’s guest is Cole Wilcox, CIO of Longboard Asset Management, a boutique asset manager specializing in alternative investment strategies. In today’s episode, Cole walks through one of my favorite papers of all time, Does Trend-Following Still Work On Stocks? Hint: it does. Cole explains why you have to be a good loser to be a good investor, how power laws dominate the stock market, and the set up for trend following going forward.
Key Points
- Trend following on stocks can enhance risk-adjusted returns by capturing large winners and avoiding catastrophic losses, leading to consistent long-term performance.
- The strategy works effectively by dynamically adjusting between equity positions and treasury bills based on market trends, providing both upside potential and downside protection.
- Trend following can be challenging for individual investors to implement due to the emotional difficulty of sticking to systematic rules, highlighting the benefits of professional management for such strategies.
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Resources: Does Trend-Following Still Work on Stocks?
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Chapters
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| 1:46 | |
| 3:19 | |
| 7:43 | |
| 25:26 | |
| 32:14 | |
| 36:24 | |
| 39:01 | |
| 43:26 | |
| 55:03 |
Transcript
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