SI371: Trends Don’t Form Randomly. They Form Reflexively ft. Richard Brennan
Rich Brennan returns this week to explore how markets truly move - not through randomness or rationality, but through impact, feedback, and memory. What begins with a single trade builds into structure, not pattern; alignment, not noise. Drawing from neuroscience and fractal geometry, Rich challenges the idea that markets can be understood without understanding interaction. The episode builds toward a pointed exchange on position sizing - closed equity versus dynamic exposure - not as a technical footnote, but as a reflection of first principles. In a system where the path shapes the outcome, how you define risk... often reveals how you think the world works.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
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Episode TimeStamps:
00:00:00 – Welcome to the Systematic Investor Series
00:00:23 – Niels’ intro, show setup, and warm welcome to Rich
00:00:57 – Heatwave down under: context and small talk
00:02:10 – Rich: divided brain, AI vs embodiment, and markets needing rules
00:07:50 – AI’s edge shrinks prediction windows; why that helps trend following
00:10:35 – Gold’s violent selloff; electricity vs oil as the new macro lens
00:14:51 – “Trend heaven”: why the backdrop now looks robust
00:18:12 – Post-GFC compression vs today’s decoupling and trends
00:22:43 – Impact and reflexivity: trades reshape the next trade
00:28:23 – Non-ergodic markets: path dependence beats Gaussian assumptions
00:35:48 – Volatility ≠ risk:
