Curiosity@Intelsense
Multidisciplinary learning is one of the best ways to improve our investment acumen. Here is a summary of some of the best learnings of the week.
Is a quant system completely machine or system driven? Or is there human intervention in it? A quant strategy is essentially a strategy that is written down and is based on quantifiable measures. It codifies a particular investment process and includes all components like time frame, factor for outperformance, position sizing, entry and exit criteria etc.
Jack Forehand, in his article, concludes about when to look at changing the investment process, "As a quant I wish the decision could be made using a purely systematic process, but there is no way of getting around the fact that human judgement has to play a role. For any process that has worked over time, the bar for changing it should be high in my opinion. But that doesn’t mean that bar should never be crossed."
Graham Duncan, in this brilliant article, talks about the fact that the great investors treat investing as a game and know exactly the game they are playing. He says, "One way to relocate your locus of control is to frame investing (and even life more generally) as a game. This allows you to experience luck as luck, to separate the hand you drew from the playing of that hand. As David Milch, the creator of the HBO show Deadwood, put it, he realized late in life that “it’s the way you learn to play the cards you’ve been dealt, rather than the hand itself, that determines the worth of your participation in the game.”
For investors, I’ve come to think of five levels of the game:
Apprentice — learning the game
Expert — mastering the game you were taught
Professional — making the game you were taught fit your own strengths and weaknesses
Master — changing the game you play as part of your own self-expression and operating at scale
Steward — becoming part of the playing field itself and mentoring the next generation"
There is one quote I particularly liked in this article. "An investor’s relationship to time also influences how he or she views periods of recovery or quiet. Good investment management comes from a mindset reflecting the assumption that the manager will be investing for decades, but that investment activity is as a series of sprints and recoveries rather than one extended marathon."
Thought of the Week:
“Nobody survives open heart surgery better than the guy who didn’t need the procedure in the first place.” ~Charlie Munger
Avoid debt. Spend less than you earn. Advocate humility. Learn from your mistakes. If you can manage to not screw up too many times in investing you’ll probably do just fine over time.
Video of the Week: Story of Alibaba & Jack Ma
Insights@Intelsense
Quantamental Q30 is a multicap momentum-based strategy.
It has a 2-year CAGR of 30.61% and has performed well over time, even when momentum strategies have done well.
Smallcase: https://intelsense.smallcase.com/smallcase/INSMO_0003
Direct subscription from intelsense.in includes both Q30 and Q10: intelsense.in