Short Term Trend Following Strategies
A fascinating discussion with Marc Malek of Conquest Capital Partners that covers: short term trend following; diversified strategies; regime based dynamic strategy allocation; building behavioral & logic driven models; being an early adopter of new ideas; the mathematics of positioning tanks on a battlefield; breaking the HKD peg; replication & much, much more. "If you can't explain your models in plain English to a reasonably intelligent person in 5 minutes or less then we don't want it."
From Beirut to Wall Street: An Unforeseen Beginning
Marc’s journey into the world of trading was anything but ordinary. Growing up in war-torn Beirut, Lebanon, his life took a dramatic turn following a youthful accident involving a firearm. This incident led his family to send him to the United States, where he initially planned to study civil engineering. However, his fascination with artificial intelligence and neural networks at college steered him towards a path he had never imagined - finance and trading. This pivot marked the beginning of an illustrious career that would eventually see him making waves on Wall Street.
A Stint at Solomon Brothers: The First Major Breakthrough
Marc’s entry into Wall Street came through an unexpected opportunity with Solomon Brothers. His academic work caught the attention of the firm, leading to an offer he couldn’t refuse. Marc’s description of his early days in Solomon Brothers painted a picture of a young, ambitious trader captivated by the dynamism of Wall Street. This experience laid the groundwork for his future endeavours.
The UBS Chapter: Innovations in Exotic Derivatives
At UBS, Marc took on the challenge of managing the Global Group in exotic derivatives – a remarkable responsibility for someone in their mid-20s. His tenure here was marked by significant achievements, including an audacious and successful move to break the peg in the dollar-Hong Kong market during the Asian financial crisis. This bold strategy exemplified Marc’s innovative approach to trading and risk management.
The Birth of Conquest Capital Partners
Disenchanted with the banking system, Marc embarked on his entrepreneurial journey, establishing Conquest Capital Partners. Here, he implemented short-term trading strategies, emphasizing a systematic and quantitative approach. His frustration with traditional diversification strategies in risk-off environments led to the development of a unique approach that aimed to perform well during market downturns without sacrificing gains in risk-on scenarios.
The Conquest Risk Index: A Game-Changer
A significant innovation at Conquest was the development of the Conquest Risk Index, which played a pivotal role in dynamic risk allocation. This index assessed various market risks and informed their trading strategy, adapting to changing market environments. Marc’s detailed explanation of the index’s construction and application revealed a deep understanding of market dynamics and the importance of agility in trading.
Championing Simplicity and Transparency in Trading Models
Marc’s philosophy emphasized simplicity in model design. He believed that if a model couldn't be explained simply and clearly, it wasn't worth pursuing. This principle guided the development of models based on microeconomic, behavioural, and psychological theories, ensuring an underlying rationale behind each trading decision.
Looking Ahead: New Ventures and Continuous Innovation
The episode concluded with Marc discussing future prospects, including exploring Bitcoin integration into their models and considering individual equities. His story is a testament to the power of innovation, adaptability, and the continuous pursuit of knowledge in the ever-evolving world of finance.
Get in touch with Marc:
w: www.conquestcp.com.
The research papers mentioned on the show are all on the Conquest website.