Episode 237 of the Systematic Investor Series was recorded in early April 2023 under improvised circumstances, which Richard has described as turning unforeseen logistical constraints into one of the more enjoyable episodes of the run. Sometimes the conversations that are least planned produce the clearest thinking, and this one is a case in point.
The discussion covers a range of foundational topics in systematic trend following: how complex adaptive systems behave differently from mechanistic models, why standard mathematics struggles with the non-linear, path-dependent nature of financial markets, what makes trend following structurally robust rather than merely empirically observed, and how the Outlier Hunter approach positions itself in relation to those properties.
Richard and Niels also engage with the question of what an outlier actually is in market terms: not simply a large return, but an emergent structure that arises from the collective behaviour of market participants, amplified through feedback, and ultimately producing a trend that no individual agent intended or predicted. That framing is central to why diversification across a wide universe is not just prudent but architecturally necessary. You cannot know in advance which markets will produce the next outlier. You can only ensure your net is wide enough to catch it when it comes.
The episode is a useful companion to the ATS research series, bringing some of those ideas into a live conversational format where they are stress-tested in real time.
Related reading: Read: Why Feedback Beats Forecasts: Why Markets Move Even When No One Is Right
237 Systematic Investor Series ft. Richard Brennan – April 2nd, 2023