Modeling the Macro Trades That Matter

Published on
April 27th, 2020
Duration
28 minutes


Modeling the Macro Trades That Matter

The Expert View ·
Featuring Mahmood Noorani

Published on: April 27th, 2020 • Duration: 28 minutes

So you finally have a macro view and you put on your trade. Time goes by and the macro driver of your thesis plays out exactly as you predicted, but the asset class you chose goes the other way. It’s the classic pitfall of “right view, wrong trade.” Mahmood Noorani founded Quant Insights to tackle this problem, using models to determine the important macro factors driving markets and the asset classes best aligned to trade those factors. His models are pointing towards macro as a huge driving force over the next few years. The question is, “will you have the right trade?” Filmed on April 23, 2020.

Comments

Transcript

  • CS
    Connor S.
    6 June 2020 @ 14:07
    why so many downvotes, i thought this was a short and sweet talk.
  • MB
    Matthew B.
    11 May 2020 @ 21:56
    Seems to be saying the total opposite of everyone else in relation to shorting the USD
  • JW
    JAAP W.
    10 May 2020 @ 02:26
    I thought this was very interesting.
  • NR
    Nelson R.
    30 April 2020 @ 23:41
    The downvote ratio in this video is ridiculous, the insights delivered don't deserve such high number of downvotes. The devolution of the RV audience is accelerating.
    • NG
      Nelly G.
      4 May 2020 @ 20:59
      What insights? Give me my 28 minutes back.
  • MF
    M F.
    3 May 2020 @ 16:21
    I thought it was a good interview. Yes, it was a view and selling a product, but I think that is fine. In fact, RV should have a section where products (research, quant, etc) are explained and offered. That is actually an added value to have exposure to additional products. Provided its indicated upfront, no harm no foul. I thought it was interesting and I think product sales are fine..just indicate that ex-ante (and even encourage it with a specific category that RV subscribers can click into).
  • AK
    Ado K.
    30 April 2020 @ 09:13
    I do not understand the criticism here. I like the insight from Mahmood a lot. I also think a lot of people need to understand the difference between a guest wishing to show how their product works and paid content. Mahmood obviously is keen to show that hey have a great product/service, if he was not interested in this it would be outright wired. To assume that a seller oriented guests equals paid appearances by Real Vision is just kind of lackluster in intelligence.
    • JH
      Jason H.
      3 May 2020 @ 06:47
      agreed. The discussion helped me as a quant practitioner evaluate the use case for this kind of methodology. Maybe the critics should improve their domain knowledge of the topic before questioning the integrity of the content.
  • JH
    Jason H.
    28 April 2020 @ 03:23
    Interesting video, this shows value of using data in a well understood and structured way. Busy earning my stripes in statistics and data science, so when I see or hear 'r squared' in a finance setting I first think 'spurious regression' or 'p hacking.' This method seems to be quite effective at identifying regime shifts, which are known to notoriously destroy inferences quite quickly. Would be interesting to hear more about users of this kind of methodology and their findings so far.
    • FD
      Fausto D.
      28 April 2020 @ 04:28
      Or just simple squared correlation.
    • JH
      Jason H.
      3 May 2020 @ 06:44
      True Fausto, or in the multivariate context simply acknowledging when their models don't work! in my opinion is an honest and pragmatic approach. The vid helps to shed some light on the practical side of a heavily theoretical/abstract topic.
  • MW
    Max W. | Real Vision
    27 April 2020 @ 13:35
    One of our core principles here at Real Vision is to give viewers a peak behind the curtain. QI is something that your counterparty may have access too. This video is meant to make viewers think about whether they incorporate similar analysis into their own trade construction and to give a chance to see how professional macro investors and traders combine quantitative analysis with their macro outlook. My takeaway is that QI and tools like it are being used by hedge funds and asset allocators as an extra level of due diligence and as a risk management tool. This is just one example the level of rigor that is going into their portfolio and trade construction. I know I'm not testing all of my trades for their macro exposure, but it is nice to know that this is what I'm up against and what I can aspire to add to my process.
    • AB
      Ash B. | Real Vision
      27 April 2020 @ 23:37
      Well said, Max.
    • MC
      Mark C.
      1 May 2020 @ 11:17
      Please keep more of these videos coming, Max, in addition to the talking head experts. Thank you!
  • MC
    Michael C.
    30 April 2020 @ 06:01
    Interesting peek under the hood. AUDJPY 97% model confidence. Very telling. Thanks Max and Mahmood.
  • HH
    HODL H.
    30 April 2020 @ 04:51
    lol this video was great, lots of haters
  • sp
    spencer p.
    29 April 2020 @ 15:33
    the guy asking the questions is incredibly annoying.
  • JL
    James L.
    28 April 2020 @ 18:30
    Wow I sure want to pay for Macro Insights now-
  • JC
    Jack C.
    28 April 2020 @ 05:56
    Did we just watch the result of a custom video shot by RV for QI to help them get 100k organic views with no kitten in sight??
    • MW
      Max W. | Real Vision
      28 April 2020 @ 11:52
      No. We do not serve paid promotional content to subscribers.
  • Am
    Alex m.
    28 April 2020 @ 05:41
    Was this a paid promotion?
    • MW
      Max W. | Real Vision
      28 April 2020 @ 11:52
      No. We do not serve paid promotional content to subscribers.
  • BF
    Billy F.
    28 April 2020 @ 02:29
    Thank you Sir!! Very Interesting insight! I'm definitely learning!!! GREAT JOB AGAIN MR NOORANI AND REAL VISION!!
  • MB
    Mark B.
    28 April 2020 @ 01:07
    Guys, Please don’t regurgitate second hand news read from other people and then get it wrong through a lack of primary effort. RV is way better than that, you have built a fabulous reputation but this is how to destroy it in an instant, plus as concerned as you maybe about keeping your respective hair styles “tight” I would prefer some “tight financial analysis”. For your information the release from lock down and related optimism in Europe means so far for the most part that you can now go to the Park, or visit small shops one person at a time..... If either of you think that this represent a return to Economic growth with a mass return to work and a resumption of normal economic activity then try limiting that to a figure of perhaps a 15 – 20% improvement from the absolute worst position but so far NOTHING more.... Sorry you did nothing more than spread misinformation today and it needs to be pointed out... Lets have real information.. In depth analysis on the Credit Card defaults and how that plays out historically looking forward 6 12 months. How car payments and Auto loan defaults are going through the roof with the impact on new autos due to lost residuals, crash in used car values... Impacts on auto parts companies...... Apologies but todays briefing wasn’t a briefing it was a ramble.... and in many respects a shambles.... Sorry to be harsh but I really like what you do when its good because its great but that also highlights the contrast when its not.... Better tomorrow please.
    • MB
      Mark B.
      28 April 2020 @ 01:18
      Please ignore I accidentally posted this against the wrong RV Interview.... For the record I found this one interesting and informative.... Apologies for mis-positing. Much humility... a case of deserved excess sangroif and carelessness on my part.
  • NG
    Neil G.
    27 April 2020 @ 21:33
    Really appreciate you guys putting the interview dates back in the descriptions! Love it and huge help!
  • IL
    ISAAC L.
    27 April 2020 @ 14:07
    Please bring back my time!!! Worst “expert” ever. Worst Expert View ever!
    • NG
      Nelly G.
      27 April 2020 @ 19:53
      Agreed. Such a waste of time, just shilling his stupid service.
  • DP
    Duane P.
    27 April 2020 @ 18:32
    "Central banks are not involved in direct FX intervention." The Fed has $60 billion dollar FX swap lines open to central banks all over the world. They've already issued over $400 billion worth. https://fred.stlouisfed.org/series/SWPT
    • NG
      Nelly G.
      27 April 2020 @ 19:47
      This guy is just strongly shilling his QI platform lol.
  • PJ
    Paul J.
    27 April 2020 @ 19:40
    Who's the guy with the camp voice at the end of the video?
  • GL
    G L.
    27 April 2020 @ 15:47
    Interesting insight. The problem with these multi-factor models is that they do great in less volatile and trending markets when people don't really need to rely on them to know what is going on and how to place trades and/or make money. They tend not to do particularly well at all in volatile markets like these where 'regimes' and correlations are shifting all the time and tend to converge - giving nonsensical signals - just when investors are desperate for clarity from a quant tool such as this. I would even argue that in a world of greater CB intervention (i.e. more zombie markets), these type of factor models are going to become significantly less useful. And on the long EURUSD trade - not sure about that at all and would probably ignore all conventional modelling on that particular cross...
    • JN
      Jamal N.
      27 April 2020 @ 17:46
      The tool is for portfolio managers, not traders. So it’s not designed for short term volatility trading, it’s designed for the opposite style of trading with longer timeframes
  • AW
    Andrew W.
    27 April 2020 @ 16:18
    So far, ECB has monetized about a quarter of what the Fed has, and yet we've seen no big dislocation of the DXY. However, Europe is as screwed as the rest of the world. So dollar shortages have thus far compensated for the Fed doing more than the ECB. What happens when the ECB finally catches up? Have to make a choice based on believability and logic, and I think RP has it.
  • TE
    Tito E.
    27 April 2020 @ 15:55
    So Mahmood, you are short GBP/EUR?
  • RM
    Russell M.
    27 April 2020 @ 15:07
    His approach is similar to Hedgeye. Could have used some more specific stocks and how affected by the macro factors.
  • dd
    david d.
    27 April 2020 @ 10:41
    THIS IS NOTHING BUT AN INFOMERCIAL, USELESS
    • PL
      Paul L.
      27 April 2020 @ 15:04
      Agreed. Minimal content commingled with blatant self-promotion.
  • Am
    Abdul m.
    27 April 2020 @ 13:42
    Please bring back Daniel oliver of myrmican capital if possible. His insights brings me and many others tremendous value.
  • SS
    Steve S.
    27 April 2020 @ 12:33
    Honestly - this was the worst interview I've seen on RV this year and possibly, ever.
    • Am
      Abdul m.
      27 April 2020 @ 13:40
      These macro guys are getting more and more confusing. It's like they go around circles using big words but talk about nothing of substance. His whole talk could of been summarized in one paragraph.
  • ns
    niall s.
    27 April 2020 @ 13:14
    Right view , wrong trade , nuff said.
  • AK
    Adam K.
    27 April 2020 @ 09:51
    Raoul says long USDEUR, this bloke says long EURUSD. So basically we're all F**ked lol
    • WG
      Warren G.
      27 April 2020 @ 11:40
      Yeah,what the heck.
  • tc
    thomas c.
    27 April 2020 @ 10:27
    does he have the answer to the question “will you have the right trade?”
  • RA
    Renaud A.
    27 April 2020 @ 10:21
    This is advertising....not an expert view!
  • BF
    Benjamin F.
    27 April 2020 @ 10:08
    are they saying that teh GBP will likely Fall against the Euro? i would think the opposite considering the Euro crisis unfolding?
  • EO
    Elena O.
    27 April 2020 @ 07:03
    Sounds a bit like a promo of the speaker's tool. :))) On that note, do they offer any free trial for RealVision users?
    • WW
      William W.
      27 April 2020 @ 08:17
      100%. A 28 minute infomercial.
  • DN
    D N.
    27 April 2020 @ 06:16
    Kinda gets to the theme from MG saying that CERTAIN prices are not set via fundamentals, and more via "something else" (be it market structure, spot flows, hedging flows, systematic strategies etc). I guess running this tool gives you some sense of which prices in the market are driven by the "something else" - giving you a way to screen what is still fundamental driven vs what is increasingly not.