We focus on the forests and the trees. We look at the world first through a macro lens, and then we sweat the details to make sure that we pick the best and right trees to capture the macro opportunities we seek to capture.
We look at all types of drivers of return. Like other investors, we pay close attention to the fundamental characteristics of the assets we trade – both known and forecasted – but we don’t stop there. Asset prices don’t simply move based on fundamentals, but also based on shifts in investor preferences for those assets. These shifts in investor preferences are precisely what technical models intend to capture – but without insight and after the fact. Our approach is to identify the underlying drivers so that we may anticipate changes in investor behavior in a way that few do.
Risk management plays a key role in both our offense and defense. Risk is what investors are being paid to bear, so we try to understand and avoid those risks that are uncompensated, in exchange for those risks that provide real opportunity. We then layer on an entirely independent view of risk – independent of our process, our own data, and our investment team – that further challenges our own thinking about risk.
These three dimensions give us our competitive edge.