Ep. 758: The Foundation of Good Trading with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
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The Role of Leverage in Portfolio Performance
The volatility of Berkshire Hathaway stock is bigger than the volatility of his publicly traded stocks that certainly is consistent with the idea that the Berkshire applies leverage to the portfolio. If you add leverage to a portfolio then you will tend to increase the risk and so that sort of ranking of the risk is consistent with leverage it's just a tool and he's using the tool wiselythat's right yeah I want to go into this notion of back testing but I think that good quant investment managers can really be thought of as financial economists have codified their beliefs into a repeatable process they were distinguished by diversification sticking to their process with discipline, says Cliff Asness.
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