Mike Melissinos is back from a long podcasting break to review the markets - stocks, bonds, commodities and currencies. There's a lot happening right now with a possible looming recession, government bond yields going back to all-time lows and the recent Coronavirus outbreak in China. Mike gives a 30,000ft view of each of the major asset classes, his favorite markets and stocks. In the episode, he discloses a number of his current positions so as to not "talk his book" without being transparent.

Whipsawed

66: Review of the Markets - Coronavirus Curveball Edition

We see pickiness permeating across society today. We don't like being wrong or feeling dumb. We think we can prepare for every little thing that comes our way. MLB teams are experiencing the pitfalls of over-optimization. Instead of giving batters as many at-bats as possible, they optimize for how each batter does versus the opposing pitcher while also considering the game is home or away, day or night, recent performance, and so on. When you consider all of these factors, the sample size decreases. This makes the decision less robust and you more likely to experience something "unexpected". Well, yea you didn't expect it because your sample size is five! How can you possibly gain any reasonable expectation from such a small sample size?

65: Over-Optimizing Your Investing Approach Leads to Death

Over-Optimizing Your Investing Approach Leads to Death

Ask questions to learn how your manager and his or her strategy makes decisions each day. It's important to learn about how the strategy is going to behave before you invest in it. You cannot expect to know how it will perform since that is largely up to the markets, and we cannot control them. But we can learn about how the strategy makes decisions in its initial design and in a variety of different situations.

Hold Your Investment Manager Accountable

Bearishness across the board in a number of sentiment surveys and indicators.

63: Current Sentiment of the Stock Market

Communicate well, especially the value proposition and generate performance. Done.

62: Priorities of a Fund Manager

...concentrated risk in one asset class and poor loss-control tactics.

61: Two Major Risks of Index Funds

Some get the result they want, and stop working. Those in for the love, never stop regardless of the results they get - but they tend to get the best results.

60: For the Love

“Improving” the strategy typically serves as a self-correcting mechanism to remind the manager to stick to his/her philosophy and strategy, not to change it or “adapt” it every time s/he runs into some losses.

59: Improvements Don't Always Work

A blind taste test between two investments.

58: Do You Care What We Call Ourselves?

There’s a tremendous amount of inconsistency and streakiness that occurs in the markets. Great investors do their best to survive and focus between big kills and have the ability to take the shot when they come along.

57: Streakiness and Big Kills

All it takes is missing one big winner and/or holding a loser just a little too long to derail our investing results.

56: Don't Hit the Snooze

One seed = one opportunity. Many seeds = many opportunities.

55: From Seed to Yield

Having skin in the game makes for a better fund manager.

54: In the Foxhole

Two things investors are always going to want: to make more money and suffer less drawdowns.

53: "Hey Man, Whatever Works."

The podcast of macro fund manager Michael Melissinos

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Whipsawed

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