SI406: Why Uncertainty Is a Trend Follower’s Best Friend ft. Mark Rzepczynski

**SPEAKER_1** (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.

**Niels Kaastrup-Larsen** (0:35)
Welcome or welcome back to this week's edition of the Systematic Investors Series with Mark Rzepczynski and I, Niels Kaastrup-Larsen, where each week we take the pulse of the global market through the lens of a rules-based investor. Mark, it is wonderful to be back with you this week. I hope you're doing well, hope you're enjoying the World Cup. I saw that England was playing close to where you are last night, I think it was.

**Mark Rzepczynski** (0:59)
No, we've been having World Cup fever here in Boston, but we've had a little bit of a crisis in Boston associated with the World Cup.

**Niels Kaastrup-Larsen** (1:11)
I have a feeling that's going to be the one that's on your radar in a few seconds. But as we always do, we have a great lineup of topics.
Thanks to you. Thanks for sharing that. But before we do that, let's hear about the crisis in Boston that you have been experiencing.

**Mark Rzepczynski** (1:30)
We ran out of beer. The Scots were in town for World Cup.
Their great guests, their enthusiasm is infectious, but they drank the city dry. They had to have emergency supplies brought in for beers. They said it was four times greater than this St. Patrick's Day weekend. So if you can imagine how much beer that people have been consuming.
But they're great fans, great to have them in Boston, but it created a crisis.

**Niels Kaastrup-Larsen** (2:05)
Well, compared to that, I'm not sure what's been on my radar. It's very, you know, I can really compare. But of course, this is the week where we heard about the passing of former Fed Chair, Alan Greenspan, who was the Fed Chair from the mid 80s, 87, I believe, all the way to 2006 So he was there for quite a while. And of course, probably known for a few things.
I think one term that springs to mind, and I'd love to hear your thoughts afterwards, would be kind of the great moderation, where we had a long stretch of low inflation and steady economic growth, kind of from the early to mid 80s, and pretty much right into the big crises. And there were kind of two of them, one that he oversaw and one that he left just before. And that's what it really came about. I think also that people would, blame is not the right word necessarily, but they would certainly link what happened with the great financial crisis to some of the monetary policies that the Fed conducted leading into that, without a doubt. So I guess my question is, we've just had a new Fed chair come in as well. And there's a couple of interesting things. I don't know if you know this, but back in 1994, and so this is when Greenspan had been around for a few years.
They made, this was actually the first time, also I'm told, that the Fed actually announced when they made a policy change. Back in February, 4th of February 1994, they came out with a very short statement about them deciding to increase slightly the degree of pressure, as they put it, on reserve positions. That was the wording they used.
And all in all, it was just like a couple of hundred words. That was it. And nowadays, we have, when we have Fed meetings, we have tons of meeting notes being presented. We have a summary of economic projections. We have a press conference. Very different. Now, Walsh, interestingly enough, is kind of moving towards the Greenspan, or maybe the pre-Greenspan era, in terms of not really wanting to share too much, and certainly not want to make any predictions about the future. Anyways, I'm rambling a little bit, but I think this is some of the things that stood out to me about this specific news. Anything, because you and I obviously have experienced the full term of Greenspan in terms of our involvement in the markets, anything that you think about when you think about Greenspan versus today, maybe?

**Mark Rzepczynski** (5:14)
Well, I think that first I remember February of 1994 very well because I was running a fixed income portfolio with a lot of mortgages. I will tell you, I had a lot of pain right after that announcement. That was one of the most painful periods of my fixed income career.