In partnership with:
CME Group

113 The Systematic Investor Series ft Jack Schwager – November 9th, 2020

Today, we welcome legendary author Jack Schwager onto the show to discuss his new book ‘Unknown Market Wizards’ and a range of topics such as: what timeframe makes the most successful trader, how the best traders seem to have uncorrelated returns to the overall stock market, why elite traders can often have terrible starts to their careers, how embracing risk management can take returns to a much higher level, what investors should look for in a money manger, mean-reversion versus momentum trading, and a lot more.

Find out more about Jack’s work here and here.

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Episode Summary

0:00 - Intro
1:27 - Macro recap from Niels
2:17 - Weekly review of returns
5:01 - Niels: Where do systematic traders tend to rank in your book, compared to discretionary traders?  What is the minimum length of track record you looked at, to be considered for inclusion in your book?
10:50 - Moritz:  To what extent did mean reversion traders feature in your book, versus momentum-orientated traders?
16:47 - Niels: How much do you think luck played a part in the results of the traders in your new book?
23:01 - Moritz: When you were interviewing the traders in your book, did you, at any time, get the feeling that there were tailwinds, outside of their control, that helped their strategies?
27:41 - Niels: Some of the traders in your book blew up their accounts a few times, so can they still be called ‘wizards’ of the market?
34:37 - Moritz: There seems to be opposing views on diversification in your book. What are your thoughts on this?
39:07 - Niels: How do you think about the slight contradiction of discretionary traders being unemotional and not falling in love with their opinions?
41:26 - Moritz: Do you think it’s possible to train random people to be great traders, as in the Turtle Traders, or do you need to be born with certain skills?
45:44 - Niels: Do you believe that earlier market wizards had a different set of skills today’s market wizards?
53:35 - Niels: How do we inform investors to avoid ‘straight-line’ equity returns and embrace inconsistency a little more?
59:10 - Moritz: To what extent can you separate long-term traders & short-term traders in the Unknown Market Wizards book ?
1:02:13 - Niels: Which statistics would you pay most attention to if you had to build a system?
1:06:13 - Niels: If you were an investor, and you had to find a manager, and you could only ask them one question, what would it be?
1:07:43 - Performance recap


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