TTU32: The Most Misunderstood Stats That You Can Use ft. Marc Malek of Conquest Capital Group – 2of2
09/18/14 • 65 min
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.
In This Episode, You’ll Learn:
- About the four strategies inside Conquest Capital’s Macro program.
- 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.
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.
Why Marc is motivated to keep pushing through this period and why he loves what he does.
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.
The hobbies Marc has and why he likes seemingly dangerous sports.
Resources & Links Mentioned in this Episode:
Learn more about Backtesting.
Learn about Downside Deviation.
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
Follow Marc Malek on Linkedin.
IT’s TRUE 👀 – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “The Many Flavors of Trend Following” here.
Learn more about the Trend Barometer here.
Send your questions to [email protected]
And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast.
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.
In This Episode, You’ll Learn:
- About the four strategies inside Conquest Capital’s Macro program.
- 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.
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.
Why Marc is motivated to keep pushing through this period and why he loves what he does.
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.
The hobbies Marc has and why he likes seemingly dangerous sports.
Resources & Links Mentioned in this Episode:
Learn more about Backtesting.
Learn about Downside Deviation.
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
Follow Marc Malek on Linkedin.
IT’s TRUE 👀 – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “The Many Flavors of Trend Following” here.
Learn more about the Trend Barometer here.
Send your questions to [email protected]
And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast.
Previous Episode
TTU31: Why Investors Should Not be Worried ft. Marc Malek of Conquest Capital Group – 1of2
This guest had a different path that eventually led to owning a hedgefund in New York. Marc Malek got a grant from NASA to study how different armored tank positions would lead to winning results on the battlefield. Traveling to Wisconsin to begin his research, his advisor steered him to do a similar project on stocks, bonds, and equities instead. He went on to work for UBS and finally founded his own firm, Conquest Capital Group. His story will fascinate and inspire you.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In This Episode, You’ll Learn:
- The story of how Marc became interested in the financial markets after a university project, a bit unexpectedly.
- About Marc’s upbringing in Beirut, Lebanon.
- How his studies at Caltech in neural networks and decision support systems eventually led him to the stock market.
- About his grant from NASA to research the position of tanks.
- His job offer from Oracle that he turned down.
- About his first job out of university at Salomon Brothers and why he left after one year.
- How Marc got hired at UBS and moved to Europe and then Asia during his time with the company.
- Marc’s departure from UBS and how he started Conquest Capital Group.
- How trader’s thought processes are turned into trading models.
- Why models are not black boxes and why investors should not be worried.
- The history of trend following and the old systematic approach.
- How markets move for alpha and beta reasons.
- About “turtle strategies” vs “trend following 2.0”.
- How Marc’s strategies and models have evolved over time.
- About his product Conquest Macro and the two mandates that the product has.
- How his product makes the bulk of its return during periods of risk aversion and high volatility.
- How his firm developed a risk index in a time before anyone was doing them.
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Resources & Links Mentioned in this Episode:
- See Episodes 13 and 14 for more discussion on “Turtle Strategies”.
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to [email protected]
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Marc Malek on Linkedin.
Copyright © 2024 – CMC AG – All Rights Reserved
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PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:
1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Follow...
Next Episode
TTU33: Options Trading: A Dangerous Animal? ft. Luc Van Hof of Capital Hedge – 1of2
Our next guest worked for the European Commission before starting his own firm. In an unusual career twist, he sold his company to a larger firm only to buy it back from them a few years later and had to start from scratch. Learn about his aversion to risk, his short term trading strategies, and his interesting past as one of the fastest readers in the world.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In This Episode, You’ll Learn:
- About Luc’s time working for the treasuring of the European Commission starting in 1985.
- How he learned about Options trading before many people were doing.
- About his years working for Bankers Trust in London and Morgan Stanley as a trader and how those experiences influenced his career later.
- How he started Analytic Investment Management (AIM), doing options trading.
- How he acquired his first clients.
- Why he got started trading currencies.
- About the early days of trading and the physically demanding work before computers took over.
- How his attendance at conferences, getting invited to speak on panels, and other speaking engagement led to the sale of his company.
- About the selling of AIM to Trobico in 2006 and why trobico bought his firm.
- How he ended up buying his company back from Trobico in 2010 after management changes caused them to shut down everything in the alternative investment space.
- About the different products that Capital Hedge provides.
- How he had to start from scratch, getting all new investments after buying his firm back.
- Where he is now – advising $200 Million US dollars, mainly in his DPI program.
- How he is one of the fasted readers in the world, and how he learned to speed-read from a class he took in the Netherlands.
- How he convinces institutional investors that a 2-3 person company is enough to manage the investments they have, and how technology has changed the game from needing a staff of 25 to needing just 2.
- How small managers need to describe what they do, and why they might not want a multibillion-under-management hedge fund.
- How investors should look at a track record of a firm and why that doesn’t necessarily mean good returns in the future.
- Why investors should see the latest test of what the firm is currently running rather than worry too much about the historic model results.
- How Luc trades and develops his systems, and how he looks for patters in the market.
- How to avoid model decay and avoid the risk when the model will stop working in the future.
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Resources & Links Mentioned in this Episode:
- Learn about the European Commission.
- More about Bankers Trust.
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to [email protected]
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or
Top Traders Unplugged - TTU32: The Most Misunderstood Stats That You Can Use ft. Marc Malek of Conquest Capital Group – 2of2
Transcript
Marc
...allocate within the different risk environments and so on.
Niels
So you have these four strategies within the Macro program, are you able to visualize and talk just briefly about how each of them implement what they do, just to make it simplified a little bit?
Marc
Well, like I said, in looking at our long vol component... all trades that we do are, in the case of Conquest Macro, we have about 35 different markets or so. In each one of those risk bu
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