Robert Carver worked in the City of London for over a decade. For seven years he was a portfolio manager at AHL — one of the world’s largest systematic hedge funds — before, during and after the global financial meltdown of 2008.
In this interview, we talk about many trading topics, mostly around the systematic approach and why it’s so important for most of us to base the decision-making process on rules rather than discretion. Robert also explains why the most important factor to consider when investing is risk.
You can hear how people managing billions of dollars were considering liquidation of market positions during the 2008 crisis, while at the same time, mechanical strategies made over a billion dollars in a single day. The fund’s computer system had stuck to its preprogrammed set of trading rules and mechanically exploited the market moves almost to perfection, while terrified humans had discussed closing it down.
Although we discussed many negative aspects of trading and investing, there’s a positive message to all of us as well. With enough discipline and work, most of us may construct an investing vehicle at home and build our own capital successfully.
Continue reading →