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Why Diversification is Key | Robert Carver, Author & Trader | #90

“Diversification is the only free lunch in finance.” – Robert Carver (Tweet)

In the second part of our conversation with Robert Carver, we dive into the specifics of his trading strategy, why he doesn’t trade full time, and what he thinks about the trend-following space in general.

You’ll hear his thoughts on drawdowns, research teams, risk, and more. You won’t want to miss his insight and clear explanations of some of finance’s most complicated topics.

Thanks for listening and please welcome back Robert Carver.

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In This Episode, You’ll Learn:

  • The two components of risk, and all about unpredictable risk
  • What sets one manager apart from the other
  • His view on stop-losses
  • How target volatility works for a lot of CTA managers
  • How he would put together a research team for a fund manager

    “Once the system is working, you aren’t going to need 50 people.” – Robert Carver (Tweet)

  • The problem with hiring a lot of people with the same background
  • How investors should read the track records of firms

    “It would be much more of a qualitative judgement for me rather than just looking at the track record.” – Robert Carver (Tweet)

  • The concerns and misconceptions about systematized and trend-following strategies
  • Why he is so keen on looking at sharp ratio
  • The issues with skew but why he keeps an eye on it
  • What his own trading system looks like today
  • The style of trader that he ended up becoming

    “The thing about trend following is that the more people follow it, it becomes self-reinforcing.” – Robert Carver (Tweet)

  • How to find out what to expect when a drawdown happens
  • What investors should ask but they never do
  • How he got over the failures that he has had in business

    “There’s not enough evidence to say that different systems work much better in different asset classes than others.” – Robert Carver (Tweet)

Resources & Links Mentioned in this Episode:

This episode was sponsored by Eurex Exchange:

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Connect with Robert Carver:

Buy his book on Amazon.

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“Completely forget about your real data and run experiments with artificial data to see your potential drawdowns.” – Robert Carver (Tweet)

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