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If You Believe In Your Models, Never Deviate From Them | Kim Bang, Prolific Capital Markets | #78

“If you really believe in what you’re doing – you should not be de-levering in a drawdown.” – Kim Bang (Tweet)

In our second part of this conversation, we dive into the details of the program that Kim runs. We discuss why it’s important to stick with your models, even in times of severe drawdowns, and how Kim views risk. He also talks about the books and people that have inspired him in his career.

Thanks for listening and please welcome back Kim Bang.

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In This Episode, You’ll Learn:

  • The details behind the program Kim runs.

    “I think there’s a direct correlation between the simpler a model is, the more robust it is.” – Kim Bang (Tweet)

  • What he feels about larger drawdowns.

    “If you believe in your models, never ever deviate from them.” – Kim Bang (Tweet)

  • What kind of indicators goes into the models that he uses.

    “We are probably out of the markets about a third of the time.” – Kim Bang (Tweet)

  • Why he uses a non-cyclical approach to creating trading models.
  • How he looks at volatility.
  • What kind of mean reversion strategies he uses.
  • How he responded to the Swiss Franc move.

    “In general – these are the kinds of events that we live for.” – Kim Bang (Tweet)

  • How Kim quantifies risk.
  • How do you prepare for a drawdown when you haven’t gone through a significant one?
  • How his firm comes up with new ideas and goes about doing research.
  • The positives and challenges with working as a father and son team in the same firm.
  • How he knows when a model has stopped working.
  • What he is doing to launch his first fund.

    “We have an inverse problem, where it’s costing us to keep money in cash.” – Kim Bang (Tweet)

  • What questions investors should be asking in due diligence conversations with him.

    “Most of the conversations we’ve had so far are with these early adopters, and they are very savvy.” – Kim Bang (Tweet)

  • What books have impacted Kim’s career.
  • How he sees the firm in the future.

Resources & Links Mentioned in this Episode:

Books that have influenced Kim include Market Wizards, The Quants, and books by Ralph Vince.

Learn more about people who have inspired Kim, including Roy Niederhoffer, Welles Wilder, and John Henry.

This episode was sponsored by Swiss Financial Services:

Connect with Prolific Capital Markets:

E-Mail Prolific Capital Markets :

Follow Kim Bang on Linkedin

“If you want to be in this space at the cutting edge and you want to compete, you have to be somewhat original. Not completely from scratch, but somewhat original in the way you extract earnings.” – Kim Bang (Tweet)


  1. Sam on 04/08/2015 at 7:25 PM

    I love your podcasts. I was wondering if Jaffray Woodriff and Brad Paskewitz are on your list for interview anytime soon.

    • Niels Kaastrup-Larsen on 04/08/2015 at 8:36 PM

      Would love to speak to Jaffray – I don’t know him personally so feel free to introduce him to me if you know him.

      I’m familiar with Paskewitz’s name – but don’t know much about his firm at this stage – feel free to put him in contact with me as well.

      Take care and thanks for your support



  2. Slav D on 04/23/2015 at 11:25 PM


    Your podcasts are wonderful. You ask very in depth questions and often tackle specific topics related to trading such as strategies employed by your guests, risk management protocols, portfolio construction and money management methods. Niels the industry knowledge and expertise you have reflects in your questions and sets you apart from other investing/trading related podcasts such as ones by Covel, Ritholtz and Joel Nelson. I find myself often coming back to your site to view the transcripts because valuable insights/ideas are revealed by your guests.
    I would love to see you interview R.G. Neiderhoffer’s brother Victor.
    Keep up the good work.

    • Niels Kaastrup-Larsen on 04/24/2015 at 11:40 AM

      Hi Slav,

      Thank you for your kind and constructive feedback. Yes, it would be very interesting to speak with Victor…so Roy, if you read this comment, perhaps you could ask you brother :).

  3. Emilia on 10/07/2015 at 9:49 AM

    Hi Niels,

    Your podcasts are great! I really enjoy listening to the in the morning before I go to work. In this particular podcast you mention a study that suggests that the programs with the largest drawdowns are the most robust ones. I would be very interested in reading more about this. Can you recall who is the author or how I can access the study?

    Greetings from Helsinki!

    • Niels Kaastrup-Larsen on 12/05/2015 at 10:22 AM

      Hi Emilia,
      Sorry for the late reply…
      This is a really important point you bring up…because it’s something most people would not believe. I’ve sent you a copy of the article, which i hope you will enjoy.
      Take care and thank you for your support.
      All the best

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