SI322: Market Narratives and the Unpredictable Alpha ft. Mark Rzepczynski
Top Traders Unplugged
Shownotes Transcript
In this episode, Mark Rzepczynski joins Alan Dunne to explore narratives, rationality, and behavioral uncertainty, particularly in the context of trend following. They discuss recent market trends in the wake of the election, with a focus on bond market movements. Mark shares insights on the current stage of the risk cycle and whether we’re witnessing an excessive buildup of leverage in the financial system. The conversation also delves into two fascinating studies: one on the significance of having access to the news and accurate information in trading, and another on how equity analysts forecast earnings—both with implications for trend following strategies. Finally, they examine the narratives currently shaping markets and debate whether trend following can be considered a source of “unpredictable alpha.”
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Episode TimeStamps:
**00:39 - **What has been on our radar recently?
**05:43 - **Industry performance update
**10:17 - **New times for bonds
**14:37 - **The issue is always in the details
**19:02 - **What is driving markets at the moment?
**22:36 - **The perspective on treasuries is changing
**26:34 - **Trend followers are going crypto
**29:22 - **Does crypto make sense in trend following?
**30:47 - **Where are we in the risk cycle?
**34:57 - **How spikes in credit spreads have impacted leverage
**38:16 - **Does "perfect information" exist?
**43:27 - **A kind and a wicked environment
**45:56 - **Why Mark tries to avoid causal influence in economics
**48:50 - **Get your position size right or go bankrupt
**50:31 - **Trailing PE - the secret sauce of successful analysts?
**55:18 - **How narrative impacts the stock market
**58:37 - **Discussing recent market action through the narrative lens
01:01:26 - Trend following - an unpredictable alpha?
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