SI324: Embracing Uncertainty using Adaptive Models ft. Richard Brennan

Today, we dive deep into the complex dynamics of global markets and the often overlooked risks that can accumulate during periods of apparent stability. Together with Richard Brennan, we discuss the rising concerns over declining fertility rates worldwide, highlighting how economic pressures, environmental challenges, and cultural shifts contribute to this seismic change. We draw parallels between these demographic trends and the unpredictability of financial markets, emphasizing the importance of adaptive strategies in navigating uncertainty. The conversation also touches on the limitations of traditional risk management models, advocating for a shift towards frameworks that prioritize resilience and adaptability. In this episode you will gain valuable insights into how both personal and economic landscapes can evolve and respond to changing conditions.

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Episode TimeStamps:

01:37 - What has caught our attention recently?

07:20 - Is now the best time to allocate to alternatives?

12:14 - Industry performance update

17:58 - How we manage uncertainty in "chaotic systems"

25:55 - How to translate ensemble models to trend following

28:25 - The benefits of adding more trend following models

34:10 - It takes guts to be a greedy pig

37:04 - The hidden risks of financial markets

48:47 - Why Value at Risk (VaR) models makes more sense than having stops

56:35 - The inevitable outcome of cycles

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