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32 “One of the Most Misunderstood Stats That You Can Use…” with Marc Malek of Conquest Capital Group – 2of2

“If you can’t explain it in English to a reasonably intelligent person why it really works, then we don’t want it.” – Marc Malek (Tweet)

In the second part of our conversation with Marc Malek, we explore the strategies that he uses to build his models and how he explains them in simple terms. We go in depth about drawdowns and what investors should know about them. We also discuss what keeps Marc inspired, what he does for fun, and how he couldn’t imagine having any other job.

Welcome back to Part 2 of our conversation with Marc Malek.

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In This Episode, You’ll Learn:

  • Four strategies inside Conquest Capital’s Macro program.

    “What we start with is what we believe is the blueprint of how markets move, and then we try to create different models that take advantage of the different parts of that movement.” – Marc Malek (Tweet)

  • How the technological revolution has changed the market and trend following, now that everyone gets the same information at the same time.
  • Marc’s approach to building trading models.
  • Defining risk in terms of upside deviation vs. downside deviation in the portfolio.
  • Why correlation is one of the most misunderstood stats that you can use.
  • How Marc deals with drawdowns and why he thinks nothing new is happening now that did not happen before.

    “Drawdowns are a very emotional issue and that’s really the one time where I think managers, including us, do something that feels better for the investor, but is probably not in the investor’s best interest.” – Marc Malek (Tweet)

  • His view on backtesting.
  • The challenges hedge fund owners face in the current business climate and why Marc is lucky to have investors that have stuck by him.

    “We benefit from those sudden events that keep people awake at night; and the way we lose money is not from any fireworks, but from a lack thereof.” – Marc Malek (Tweet)

  • Why Marc is motivated to keep pushing through this period and why he loves what he does.

    “For each additional parameter that you’re putting into your model, you are lowering the number of the degrees of freedom that your model can have to react in different market conditions.” – Marc Malek (Tweet)

  • The story of how Conquest Capital got its first investor, and how in the early days investors cared more about managers and interacting with them personally.
  • Marc’s biggest failures, and how he overcame them.

    “If I could do it all over again, I’m not sure I would choose to be in a risk averse strategy.” – Marc Malek (Tweet)

  • The hobbies Marc has and why he likes seemingly dangerous sports.

Resources & Links Mentioned in this Episode:

This episode was sponsored by Swiss Financial Services:

Connect with Conquest Capital Group:

Visit the Website:

Call Conquest Capital Group: +01 212.759.8777

E-Mail Conquest Capital Group:

Follow Marc Malek on Linkedin


“Even in its worst days – it’s still the best job in the world. It’s very dynamic, very exciting.” – Marc Malek (Tweet)