OI11: Avoiding the Herd: A Different Path to Alpha ft. Jerome Callut

In today’s episode Moritz Seibert is joined by Jerome Callut, one of the founders of DCM Systematic, a quantitative hedge fund based in Geneva, Switzerland. DCM Systematic aims to produce returns that are uncorrelated to trend following CTAs by pursuing a different path to alpha. In fact, the team around Jerome is very much focused on avoiding getting into trend following trades. Instead, they emphasize strategies which anticipate the flows of other traders and use several behavior-based models to distinguish themselves from the SG CTA index and other industry benchmarks. Jerome and Moritz speak discuss generic trade examples and Jerome explains why pro-active and re-active risk management is very important for them. ----- EXCEPTIONAL RESOURCE: Find Out How to Build a Safer & Better Performing Portfolio using this FREE NEW Portfolio Builder Tool ----- Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website. IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here. And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here. Learn more about the Trend Barometer here. Send your questions to info@toptradersunplugged.com And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast. Follow Moritz on Linkedin. Follow Jerome on LinkedIn. Episode TimeStamps: 02:21 - Introduction to Jerome Callut 03:52 - Why they use non-trend following models 08:42 - What would happen if they added a trend following component to their model? 09:57 - The 3 categories of their trading system 11:11 - Category 1, Behavioural: Anticipating the flows and trades of other traders 15:35 - An example of how they handle flow 18:35 - Did Callut anticipate the unwind of the Japanese Yen carry trade? 21:51 - Exploiting the skid marks in the markets 23:53...