Ep. 596: Rob Arnott Interview with Michael Covel on Trend Following Radio

Rob Arnott
Rob Arnott

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Rob Arnott is an entrepreneur, author, investor, and writer. He serves as Chairman and CEO of Research Affiliates LLC. advising on over $160 billion dollars in institutional investment assets. Rob is one of the world’s preeminent voices on investment strategy.

What was Rob like as a young man? At age 16 he was extremely mathematically inclined with an avid interest in both the stock market and astronomy. He wasn’t sure which path he wanted, but he knew his mathematical skills were good enough for a top tier job in finance, but not in astronomy. So he took his math skills and entered the world of finance.

Rob has been with quantitative investing since its inception in the 70’s. With the rise in computer capabilities, quant traders were able to start to make a name for themselves in the trading community. What is one of the biggest failings of the quant community? Traders have fallen into a trap of making systems so complex that the average investor can no longer understand them. He is a big fan of keeping things simple.

What is one rule Rob always sticks by? If you have an idea you think is a good, always try. There will be others that came before you, but that doesn’t mean your idea won’t be just as successful or more successful. However, if you never try, you will never know. When it comes to investing what is another rule? Diversification is key.

In this episode of Trend Following Radio:

  • An addiction to complexity
  • Fundamental indexing
  • Momentum trading
  • How to use valuation
  • Benchmarks
  • Diversification
  • Modern finance
  • Weighting your portfolio

“I think the quant community has a lot of issues. Some of them relate to an addiction to complexity and some of it relates to a willingness to obfuscate. If you make your ideas complex enough so that nobody can understand it, that creates a seduction attraction to some, but people shouldn’t buy something they don’t understand.” – Rob Arnott

“We are in a business where you win by making fewer errors.” – Rob Arnott

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