Asif Noor, a quant with over two decades of experience, discusses his journey, the impact of the GFC on global macro forecasting, and the role of AI in this field. He emphasizes the importance of testing hypotheses with data and using appropriate tools to do so. Other topics include risk management, macro strategies in hedge funds, market timing, navigating market environments, macro RV strategies, quantitative investing with limited data, making investment decisions in uncertainty, backtesting, survivorship bias, and the use of machine learning in investment strategies.
Takeaways
• Trust and effective communication are crucial in financial conversations, especially with investors.
• Risk management and diversification are key aspects of hedge funds, especially after the 2008 financial crisis.
• Factor timing involves adjusting exposure to different factors based on predictions of the market environment.
• Diversification is essential in timing strategies, even with accurate timing.
• The use of alternative data, machine learning, and AI in global macro has the potential to revitalize macro models.
• Quantitative investing requires strong rationales and hypotheses behind investment ideas and selective choice of data sets.
• Intellectual humility, avoiding overselling the narrative, and having disagreeable colleagues are important for making investment decisions in uncertainty.
• Backtests and survivorship bias can lead to unrealistic expectations and a distorted view of investment risks and rewards.
• Embracing the uses of AI has ethical implications such as profiling, predictive analytics and responsible implementation.
