YouSaid · the spoken record

Dr. Ben Hunt

lines on the record: 74
first: 2018-01-23
most recent: 2018-01-23
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“They're kind of easy answers like when my wife said yes, you know, you know, that was very kind of her. You know, I can also think of things like the tough love kindnesses. But frankly, I've had these, I think we've all lived with these situations in both business and in our personal lives. And again, there are a couple of these moments. The kindest moments, the most human moments are when you are forgiven. And those are very special and very human. And it's important, I think, to remember in our actions towards others that that's the greatest grace we can give is to forgive.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Not just intellectually aware of that, but come to grips with that emotionally. So the hardest stays on the farm are always when one of the animals dies. And there have been a couple that have been particularly unpleasant because that's how life is. It's messy. But you have to own it, right? And you have to deal with it and treat the animal as well in death as you did in life. So that's the artist days on the farm. And it's the hardest days in our investments also. But we've got to own it and we've got to take grips, come to grips when things don't work as well as when things do.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Frankly, it was a sad day because that is one of the things that you think you know intellectually that animals live and they die, but you don't know it emotionally. And I wrote about it in a piece because it's similarly with our investments. I mean, we have a hard time saying goodbye to our investments, but investments have a life cycle also, and we've got to be.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm just going to give up. I do think we have these tools and these technologies to see how is it playing out and be adaptive enough to react to that.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“What the outcome is going to be. It's not part of the game, but what it can tell you is how is the dynamics of the game? It is a tool for looking forward, not way forward, but tomorrow or next week for understanding the human dynamics of a system. So it's never going to give me that I now have the answer where I'm going to invest in X, Y, and Z and six months I'll knock down these profits, right? It is going to make me a better investor, though, because I'm going to understand as it unfolds, and I'm able to talk to my clients and the people I care about about the process and the dynamics of what's happening. Again, it's part of being adaptive and agnostic, but that doesn't mean that I'm going to just stick my head in the sand and say, well,”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's what I'm not after. What I'm not going to come up with is a formula. I'm not going to build a regression analysis of structured data out of this. That's not how it works. That's not how game theory works. It's frustrating. It's really frustrating about game theory because most games have multiple equilibria, multiple outcomes. And if you give me a game and there are a couple of equilibria and you say, okay, what's going to be the outcome, what's going to happen in markets tomorrow, I have to say, I don't know. I know it's going to be one of these multiple equilibrium, but I don't know which one. And game theory cannot tell you.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Allows us to see these oceans that we swim in, oceans of words and communications, and lets us visualize that and make sense of it really for the first time. That's what I'm excited about.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“And actually trying to understand them. Not for crunching through structured data, not from finding patterns in historical price or volume or series, but for finding forward-looking behavioral patterns. Again, that's where I think alpha can still exist that's driven by the way we are impacted by, the way we are hardwired to respond to the things that people say and tell us. I've written a good bit about this, but that's where I'm really excited about the new technologies that are available. It's like when they, Leovin Hook, you know, invented the microscope and put a slide of dirty river water underneath it for the first time and saw this whole new world, this microscopic world, or applying a telescope and looking at the sky, I think that what artificial intelligence does is”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And in game theory, we talk about missionaries, about a famous investor like Warren Buffett and how what he says, how that narrative or that story, how it rolls through markets or how what Janet Yellen says, the latest Fed governor comes out, what they say, how it rolls through markets. So what I'm saying where there's not trusting the algorithms in my head, I don't mean that there aren't patterns to the world into nature. I think that we've got, though, at this new technology through artificial intelligence and natural language processing to actually start seeing some of these patterns that we've kind of waved our hands at in the past.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Stuff. So when you take these vast computational arrays and you try to apply it, this gets back to the three-body problem, when you try to apply it to historical data to look for the answer or the pattern or the algorithm, you're going to be disappointed. You're not going to find it. But artificial intelligence, where it is useful, is usefulness, and it's in looking at unstructured data, like the ocean of words that we have, all the things that they're going to say on CNBC today, all the things that are going to be printed in the Wall Street Journal today.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a great algorithm That's exactly right. Understanding the role of narrative, figuring out the rules, the computational rules of narrative. And so this goes under that heading of natural language processing. And unfortunately, not unfortunately. I'll back up a second. There's another big buzz phrase in our business today, any business, artificial intelligence. I'm very excited about that. And I think there's a big opportunity here because I think it's largely misunderstood in our business. So I'll put it this way. Artificial intelligence will not make your regressions run any faster, right? If your business model is to find these arbitrage opportunities that are increasingly vanishingly small, either in time or in price behind this data series and that data series, this structured data series and that structured data series. Artificial intelligence doesn't help you. Neither is machine learning or any of this other”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“And it means typically that that's not going to be a multi-billion dollar business, which means it's not going to be a public listed company, but it can be a great private business. And this gets back to this notion of where I think alpha opportunities, quality opportunities are mostly in private markets as opposed to public markets, because you have to have scale To succeed in public markets today, or rather it's just so difficult to survive if you're not. And I think it absolutely goes hand in hand with this notion of quality that quality, at least the way quality like beauty is in the eye of the beholder, so much of what I think about quality, and I think you're the same way, it doesn't scale. It doesn't scale.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hey been, brother Because of behavioral reasons. You know, Patrick, what I think is a hallmark of, I'll call it the modern economy, particularly when we're talking about publicly traded securities, is the need, the absolute requirement of these companies to have enormous scale. And I'm talking about our business too. I'm talking about our business of financial services as well, that it's never been more crucial to have scale. scale for the sake of scale. It's the only way to survive, I think, in so many aspects, even of our business, certainly the asset management business. I think it's different to your point about quality not scaling. There are aspects where quality can be rewarded and where it doesn't scale, like in a direct relationship with a client, with a financial advisor is a very good, close relationship, a quality relationship with their client. That doesn't scale.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“ETFs are an industrially necessary thing. They're convenient is like going to the supermarket and I can buy my carton of wonderful eggs, but an exchange traded fund to put a fund so that it can trade daily like this. This was not invented because it's good for investors. It's invented because it makes money for market participants. My God, right? You know, it's, and again, I use ETFs all the time. They're wonderfully convenient. Like I'll still go to the grocery store. The Hens didn't lay enough. I got to buy some eggs. But we make this mistake all the time, whether we're thinking about our educational system, whether we're talking about our political system, whether we're thinking about our market system, where the things we take for granted and the things we think are natural and correct are merely industrial. Really necessary.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Scrub those eggs and get the dread diseases that you get in a protein factory off of them, and that is required to refrigerate them because that's the only way you're going to keep them from decaying before they're delivered to the supermarket. So this freshly scrubbed refrigerator, cool to the touch egg, it's not there because that's what makes for a good egg. It's because that's what's required for mass-produced industrially sufficient egg production. And so that was my example. You know what else is like that? ETFs.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Get bacteria and other stuff growing on it. Now, I don't want chicken poop on the eggs I've got either. So what you do is, you know, maybe you get a little bit of wet on the most soiled areas, but use your fingernail. Just get it fingernail clean. You scrape it off. And then you keep it on your kitchen counter, and it can stay that way for six weeks. And it's going to be the best egg you ever had. So why do we have refrigerated scrubbed eggs? Because our eggs come to us from factories, from egg factories where you have tens of thousands of chickens that are kept in their one square foot area and never move, never leave. The food comes to them, they lay the eggs there. There are horrible diseases in bacteria there. The temperatures for storing the eggs, for transport later can get really high. So yes, it is industrially required to”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“When eggs are laid, they have a thin antimicrobial film on it called The Bloom. This is how nature works. It's incredible. It's incredible because if the egg were too hatch, you don't want that baby chick coming out into some bacteria-infested shell that it comes through. You don't want the chick to be sick. So nature has that protection. They have an antibacterial film on freshly laid eggs. Well, if you scrub it, you wash it really, really clean, it washes that all off. And then you do have to refrigerate your egg.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“So clean, just scrubbed clean, and they're all nice and cool and refrigerated. And so we think, well, that's what an egg should be. It should be just scrubbed clean and cool to the touch. Of course, that's what a good egg should be. And that's absolutely untrue. Absolutely untrue. A fresh egg, an egg that's laid that morning, it's got some dirt on it. And by dirt, I mean chicken poop on it. And, you know, my kids do all the work so they collect the eggs in the morning, bring them in. And there's nothing better than that fresh egg. There's nothing better. I don't have to describe all that to you. But you don't refrigerate a fresh egg. You keep it out on the counter because you don't need to refrigerate a fresh egg. You also don't need to scrub and wash a fresh egg. In fact, you don't want to do that because”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's true for so many things, but the example I wrote about to try to illustrate this example of how we've come to think of so many things as normal and natural when they're anything but is the notion of the egg. What's a good egg? All of us, or most of you, we buy our eggs at the supermarket, and it's wonderful. They come in these packages. They're all”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sure Oh, thanks. Thanks. Yeah, that comes from our chickens and our eggs. One thing you learn from living in the farm. That you see the way that you've lived in the past. Things you've taken very much for granted. And you think, oh, I took that, that's not where meat comes from. It doesn't just appear magically in a... Cellophane wrapped, you know, little package all neatly, you know, with no blood. No, that's not really where meat comes from. And again, this is part of how I wanted to raise our kids so that they really saw the underpinnings of our world for all, you know, warts and all, right? I'm a meat eater, but I own it. I think that's the most important thing about whether it's raising kids or how you interact with others is do what you're going to do, but own it.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“In truth, it was the best thing I did, could have done. Yeah, you give your money back to your clients before they lose money. When you're honest with them and yourself that there's something not right here and it's not working. And so I often try to tell that story to people who are coming in the business or the like, and it gets back to this notion of your reputation is the one thing that if it gets broken, you can't put it back together again. So whatever risks you think you're taking to protect that, It's in a bigger scheme, it's not a risk at all, or it's certainly the smart play.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't want to have physical goals. I want to own bullets and seeds. That's what I want to own. So there was that moment that I talk about kind of. Personal risk and kind of rethinking the bigger picture of what we're all doing here. And the other example I'll give. It seemed like a huge risk at the time, and that's the point where we gave all the money back in the fund because it just wasn't working. And I needed, you know, again, we weren't losing money for clients and the way our business works, if you hit the ball down the middle of the fairway, you can do well in our business. But it wasn't honest. And I thought I was taking an enormous personal risk by winding down a successful business.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“It reminds me of people, you know, who want to own physical gold, which I understand the impulse. I mean, hell, I'll have a farm, right? But if we're at a point where”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Success we were having in our own fund, but kind of stepping back to think that. Pressing that position here was essentially betting that the whole system would collapse. And if the system collapses, well, your fun doing well won't work. We're all adolescents, right?”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Know our fund, I mean, we were absolutely killing it in September of 2008. And I remember thinking one day, you know, it's what you do, you're thinking about what I made the returns a day. And, oh, if this happens, we're going to make this much more money. And, you know, the calculus that all of us go through in our heads in this business because we had taken a big position on this. And that's when it kind of hit me, which is that, well, shit, if the whole system goes down, I'm not going to make any money. I'm not going to collect anything. And this was, you know, I think why, you know, Warren Buffettly famously sold all these naked puts on the S&P 500, right? Which is that, well, they don't bail me out if they don't bail the system out. None of this is going to matter anyway. And I remember what a chastening moment that was because I had gotten so wrapped up in...”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“And what we did, and so in September and I discovered credit default swaps. You know, it was a broken instrument then. It's a broken instrument now. But when you're short something, which is being long accredited default swap, you're shorting the credit of that company. Being short is all about timing. If you're wrong on timing and you're short, you're just wrong. But if you're right on timing, well, you're right. I just nailed it. positions we had taken we were just where everyone else is in crisis around us and you know this is at a big long only shop”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“So I'll give you two, and they're both connected with the business of investing, the business that we find ourselves in. The first would have been in September of 2008. I'm running my long short fund. I say, we killed it in 2008. We're long short. We're actually net long for the whole year and we were up 20 something percent. 20-something percent in 2008.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah, but it's not going to be off a lot. It's a manageable basis risk. So in Connecticut, cold weather is going to start hitting or call it October. And so you've got from June 22nd to October maybe the first freeze comes a week early. Maybe it comes a couple of weeks late. That's basis risk, whether it's a little bit early or a little bit late. But it's manageable basis risk. What we have in investment so much today. An unmanageable basis risk because it's basis uncertainty. We don't know if winter's coming or not, right? We don't know if quality is ever going to matter again. And it's like the game of thrones where winter can last for five years, where the weather patterns are so unpredictable. It'd be really hard for bees to survive in that environment. And that environment, that Game of Thrones weather environment.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Derivative. So I really care about We call the underlying thing, you know, the price of the stock. But I think I've got in my mind that there's a relationship between the price of a stock and something else, a derivative signal. The basis is simply the strength of that relationship. And so basis risk means that, well, shoot, I thought that those things would move hand in hand or hand in glove, but actually, it's a little bit tenuous. That means you're suffering basis risk there.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, sure, sure, sure. That's what I tried to do in the notes. So again, basis risk is one of these $10 phrases that we use in something very simple. We mean something very simple, right? All basis risk means is if you've got something that's related to something else.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Amazing risk managers, and they have other algorithms so that if you get an Indian summer where the summer lasts longer than you expect, or if it comes earlier, they have ways to take account of temperature and wind patterns and stuff like that to adjust their trade because they're making a trade based on the summer solstice. Sure. And they manage the basis risk of that trade.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“These observations to other bees. But to go from the hive to the water source or from the water source to a clover patch, it's all calculated based on light angles. And so kind of trivially basically for bees, because they can remember this, they've got a simple algorithm for when they need to start preparing for winter. And that algorithm is the sun is at the highest point in the sky northern hemisphere on June 21st. So every day, every bee sees that angle of the sun. And if today the maximum angle that the sun achieves during the day is less than the maximum angle yesterday, we are now past the summer solstice, which means that summer is on the way out, so their entire repertoire of behaviors hardwired behavior. Behaviors to start preparing the hive for winter begins precisely on that day. It's crazy, but that's exactly what they do.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's amazing, but that's exactly what they do. And it goes beyond their preparations for winter, actually the bees brain and its compound eye is designed to do two things really effectively. When it sees motion very effectively, that's what the compound eye is amazing for detecting motion at infinitesimal motion and measuring it really precisely. So whether that's another insect, whether that's the wind, whether that's captures motion really effectively. And the other thing it really does well is measure the angle of light. It's just the, you know, this is how the bee's nervous system and I evolved is to measure angles of light amazingly well. So that's what they use actually to navigate. They have pretty amazing memories. They have the famous bee dance that they use to communicate.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“and to apply that same sort of rigor, intellectual rigor to our own internal conversations. That's the hardest part about being an investor, but it's the most important too. And that's what I think I try to accomplish by talking, by couching these stories about markets in terms of what I see in the animals.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“God, sheep are the weirdest animals in the world, and this is how they act and they behave. Or, man, bees are geniuses in the uses of their algorithms. When I can couch it in those sort of terms, it arms people to have better conversations with their clients. Frankly, it arms people to have better conversations with yourself. Because that's all of us, our real client when we're talking about investments, the person that we have the most difficult conversations with is not someone else, but it's always ourselves. It's always ourselves. Because we've got these ideas in our head, the algorithms, these theories of how market should work. And it's so hard to Think critically About yourself”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Intentionally presented in a daunting way because the person presenting it to you wants to prove to you that they're smarter than you are. They understand, you know, well, if you look at implied Vaul on these asset classes, surely you understand your Markowitz procedures require you to do X, Y, Z. And it's just a lot of BS. The whole notion between risk parity and risk balancing, it's just an old idea. It's an old good idea with a little bit of a new twist because we've got some new tools we can apply to it. That's all it is. And so what I find is that by communicating these ideas in terms of”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so you see how markets and the land actually have so many of the similarities. And what I've, I don't know, I've always had a knack for trying to communicate these observations. And I think that they're important observations about markets, but to express it in a way that connects with people. The real use case for what I write with epsilon theory, most of the audience are financial advisors, professional financial advisors. And I think what I do is useful for them is that it's not teaching them, telling them something they don't know. I'm not there to educate people. I mean, that's a load of hooey. What I think I'm useful in doing is arming financial advisors with a way to communicate with their own clients, with a way to take these ideas like risk parity, which can seem so daunting and often is in”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Locality certainly of nature, as we see in markets with their cyclicality. It gives you such an appreciation. Land, the nature is very forgiving. And so are markets. The thing you can't do is just, and this is one of the early lessons that I got as a cub investor in this business, is you always want to live to fight another day in investing because there always is another day. There always is another day. You never go all in with an investment. Never ever, never. You always want to protect your reputation because that's the thing you can't recreate once that teacup breaks. You can't glue it back together. It's still a broken teacup. So you never go all in with investments. You always have to protect that reputation as your most precious thing. That is exactly what it takes to be a successful, I'll say, farmer, anyone who works with the land.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“So grapes of wrath material. This isn't. But as part of this investment in my family and how I want to raise my wife and I want to raise our children, I think there are so many lessons about life, frankly, that one learns from working with animals. And I do mean working with animals because a lot of these animals like bees or chickens, you know, they're not pets. They're there to, they pay rent. I love animals that pay the rent. So we've got bees, we've got chickens, we've got goats, we've got sheep, we've got horses, dogs, they are part of the family, right? But it's been a magical experience and an important investment for family and the like. But to your point about taking lessons from this for investing, working with animals and the land and farms, it gives you such an appreciation for the six.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, sure, sure. I'd love to start with Well, you know, first of all, we call it a farm. I mean, I've got to put it in air quotes. I mean, this is 44 acres in Fairfield County, Connecticut. Grapes of wrath material this ain't, right? I mean, if I have a bad day, I can go to the local nice tavern and get my artisanal.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Investment in more of my time investment, I absolutely think there's an opportunity to find alpha in public markets by thinking differently and freshly about these behavioral aspects of individual market behavior.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Where I think that I want to have a big chunk of my personal portfolio is what we talked about tapping the beta of global public markets. And there, I'm not trying to kill it. I'm not going to. I'm not going to kill it. I don't believe that there is an algorithm that gives me the answer for where public markets are going to be a year from now. I really don't believe that that exists. What I do think I can do through a philosophy of profound agnosticism, through a risk-balanced portfolio, is that I can efficiently, i.e. cheaply, harvest those global markets. That's all I'm trying to do, just to cheaply and efficiently take whatever the world is going to give me in those public markets. And the third piece, and this is less of a dollar.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Three things. So it is private investments where I do believe that. Interesting smart people can still legally find private information. And look, that can be something like that's why I own the house that I do, you know, the farm that I've got it, right? I've got private information about that. And that's a huge portion of my personal portfolio is where I live and where I've chosen to raise my family and how I've chosen to raise the family. That's the biggest investment I've got. And I feel like I've got private information on that, legal private information, right?”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Again, we're talking now personally and a bit for our firm as well. Where does Alpha exist in public markets? It's in these behavioral aspects. And we do have new technologies now that let us try to capture those and see those in ways that we couldn't before.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think yes. So I believe that momentum or trend is a thing. And that's the first thing you have to decide with someone. Do you think it's a thing or not? I do. I think it's a thing. Why is it a thing? Because of fear and greed, because of human behavior. And that makes it a constant in a way that is separate from the gravitational impulses of central banks or this player or that player in markets. I think that there are so many of these behavioral aspects that we now have technologies like natural language processing and the like to try to see for the first time. So I think the most promising aspects of alpha capture and public markets is looking for these behavioral aspects of markets. That is exactly where”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Information to have about public companies. You cannot have that level of private information about public companies today. So Alpha is private information, period, full stop. That's why it's so rare in public markets today. It's still possible if you get a publicly available and yet not widely disseminated or widely appreciated information source. That source of alpha still absolutely exists in public markets, but is very tiny. So to your question about dealing with uncertainty and trying to overcome uncertainty through gaining private information, you're talking with venture capitalists because they can do that. And it's why I think that in your search for alpha, That is best. Budgeted for your efforts in private markets as opposed to public markets.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, what I loved was you in your introduction there, you said you were talking to venture capitalists. And venture capitalist course operate in private markets as opposed to public markets. I absolutely believe, and this is how we're kind of making this transition from what I think in terms of our industry to the company I work for to me individually, we're kind of jumping to me individually here. There are absolutely still opportunities for private information. legal private information hence alpha in private markets. A venture capitalist can know their companies, the companies that they invest in. They can play a direct role in how those companies are managed. They can see at such a granular level what's really happening in that company's markets, its management and the like, all of which is now essentially illegal.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm pausing in my answer because I have a different answer for me personally, for my company, and for our industry. Well, yeah, I'll try to go, but I'll go in kind of reverse order. I'll go for our world of financial advice, financial services first. And what I would say to you there is that alpha is so rare. It's such a unicorn in public markets today that I think that less effort should be placed there and that more effort should be placed on proper risk allocation, taking the right amount of risk is the most important decision that any investor, institutional, or individual can make in our business. And I think that not enough attention in our industry goes to helping investors make that most crucial decision accurately and well, taking the right amount of risk.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“What you know how to do is how to analyze bottoms up the companies that you care about. And that's what you've told your investors you're going to do. I know how good you are at doing it. Let's go do it. So it's really being a coach and trying to prevent the very natural tendency we have that when our process isn't working as well as we'd like to, we start flailing and we start looking for other answers with the capital A. And so this approach of profound agnosticism is to say, no, no, we believe in you and your process. You've said what you're going to do. Now let's do what you say.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source
“To be a counselor for navigating a world where your internal algorithms, you're the PM of this group or that group, they're not working as well. And so our tendency is to flail out and say, oh, if I'm doing energy infrastructure, I think, well, I'm going to try to predict the price of oil, and that's going to tell me the answer for whether my companies are going to do well. And so I'm there to say I don't know what the price of oil is going to be. You don't know what the price of oil is going to be.”
2018-01-23 · Invest Like the Best · Dr. Ben Hunt - The Three-Body Portfolio - [Invest Like the Best, EP.73] · IDENTIFIED FROM THE TRANSCRIPT · source