Trend Following With Michael Covel

Today on Trend Following Radio Michael Covel speaks with Vineer Bhansali. It is Vineer’s second appearance on the show. He brings a world of experience to the subjects of behavioral finance and tail investing strategies. He believes strongly that sustained portfolio performance comes from expecting the unexpected and hedging both left and right sides of tail risks. Vineer’s firm, Long Tail Alpha, is based on exploiting values from the tails of the probability distribution and also exploiting how human behavior distorts the markets.Michael starts the podcast off breaking apart Vineer’s white paper, “A Behavioral Perspective on Tail Risk Hedging.” Vineer says the way markets actually trade have very little to do with the idealized models that have been presented in the academic community. Those models are presented because they are easy to solve. All interesting things that go on in the markets are beyond the idealized scenarios. Vineer talks Michael through the idea of the “Three Investors.” His study is based