Originally Posted by gettoasty
His partner is the statistician.
Question, something my firm manager brought up, but do you think your strategy will play more on the offensive or defense side?
It seems around "inner circles" that many funds similar (Black Rock comes to mind) are allocating their funds based on defense strategies so to fair best when the market turns sour. It isn't so much about the gains nowadays and it seems into the future, or at least going into 2012, but how respectable managed funds can make allocations that best defend against another downturn.
I think after 2008, investors who think toward the future are more aware of what can happen and prep for that possible drop rather than taking larger risks for a "meager" return.
So, is your strategy, based on emotionless algorithm--self-sustained management--more catered towards "smart" investors who acknowledge what happened in the past, or more on the aggressive side, looking to expose and take advantage of trends?
I'm not really sure how I would qualify it between those two options. I mean, it does very well in crashes, so in that sense it's "defensive." However, it's certainly capable of making money in good times too, and it's definitely all about aggressively exploiting trends. It's high risk, high reward, so in that sense it's aggressive. I feel like it's hard for me to say; our beta is 0.08, so the idea of our fund being a hedge, or a trend-follower kind of doesn't fit, I think. We do well or poorly based on things like volatility and the size of market oscillation, not bull or bear.
Also, for those who are interested, the fund is up about 6% since its inception roughly a month ago.