SI401: Why Trend Following Wins in Chaos ft. Nick Baltas

**Niels Kaastrup-Larsen** (0:01)
Welcome to Top Traders Unplugged. In markets, success doesn't come from predicting what happens next. It comes from being prepared for what you can't predict.
In each episode, we go deep with some of the world's most thoughtful minds in investing, economics and beyond to understand how they think, how they prepare and how they decide, and the experiences that shaped how they see the world. No noise, no shortcuts, just real conversations to help you think better and invest with confidence.

**Moritz Seibert** (0:36)
Welcome or welcome back to this week's edition of the Systematic Investors series with Nick Baltas from Goldman Sachs and I, Moritz Seibert from TuckA Capital, where each week we take the paws of the global markets through the lens of a rules-based investor. Today, I'm sitting in for my friend Niels Kaastrup-Larsen, who would normally be recording this show with Nick, but Niels is traveling this week and therefore, unable to get in front of the mic.
So, Nick, Niels likes to start this show as usual with his, what's been on your radar lately question. I'd like to pick this up and ask you, well, what's been on your radar lately? What's been keeping you busy? What's top of mind?

**Nick Baltas** (1:18)
Yeah, I know Niels does that and it's good to see you, Moritz. It's been like what, six months we're here together?

**Moritz Seibert** (1:22)
Yeah, six months or so.

**Nick Baltas** (1:23)
Something like that, yeah. So yeah, it's always a pleasure to kind of connect again with you. What's been on my mind, frankly, it's very, very busy. It's very busy with no cloud activity. Obviously, the markets have been keeping us up on our feet for some time now. Complacency and at the same time, eager to get to what the next phase of this micro situation is. Certainly, it takes a good amount of our time. I'm spending a good of my, I guess, quasi-free time on exploring how all this AI frenzy is going to impact both the way that we do things on a day to day, but also how research is going to change from this point onward. So, it's more of an exploration phase at the moment. Kind of ideas and creativity comes into play. Obviously, at the same time, we try to make sure that it's kind of an underlying process, as to how we do things and how we would want to be doing things going forward.
But I would say this is something that I'm spending a good amount of my time. I know coding has always been part of my day in the recent years, a bit less so.
But now there was a chance of kind of going back to it, and it's kind of nice to see how you can start building even tools for your own kind of personal life through the new technology. I think a combination of very busy client activity, some travel, there is nothing that is on top of my mind that I would just flag as one. It's just a very, very busy period. Thankfully, in a few hours, I'll be heading out for a week of a holiday. So that's basically what I have on my mind, baby, that I need this one week to spend with the family and the kids.

**Moritz Seibert** (3:02)
Yeah. Well deserved. You told me. I wish you a great holiday.
Like you, the markets are keeping us busy. I mean, not necessarily from putting trades on, but just the ups and downs and all the volatility, especially in the petroleum markets continues to be a big theme. Luckily, trend following strategies are doing quite well this year in light of the situation. True.
As far as I'm concerned, I had a great day in Zurich yesterday, was in Klienz. I met a common acquaintance of ours, as I've mentioned. We shall not mention his name, but it's been just a great day there. It's a great city. Everybody seems to be doing well. True, true.

**Nick Baltas** (3:41)
A very good friend, very good friend.

**Moritz Seibert** (3:43)
Very good friend. So yeah, he definitely says hi.
Now, there's quite some interesting topics I'd like to discuss with you today, Nick. But before we go there, there's usually a trend following update that Niels does, and I just want to follow, I just like to follow the same schedule. So here's the performance update as of yesterday night, which is Wednesday evening, May 20th.
Month-to-date and year-to-date performance number. For the BTOP index, it's up 1.46% for the month and more than 11% for the year. As I've mentioned, trend following is doing quite all right this year. The SockChain CTA index, similar numbers, 1.55% positive for the month and up about 12% for the year. SockChain trend a little better, 2.11% for the month and up a little bit more than 12% for the year. The Short Term Traders index is up about a percent this month and up 6% for the year. Equities MSCI World's up 2.4% for the month and 8% for the year. Bonds, they're down about 50 pips for the month and down about 25 pips for the year. And the unbeatable S&P 500 Total Return Index is up 3.19% for the month and 9% for the year. Isn't that amazing? I mean, you just don't bet against the S&P 500 anymore. I mean, every time I look at the performance and I report to somebody, you know, what's the performance of the S&P 500? It's always up.