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Join Jonathan Krueger as he interviews Corey Hoffstein, Co-founder & CIO at Newfound Research, a financial technology and product innovation company that provides quantitative investment research.
On today’s show we will be talking to Corey Hoffstein, Co-founder & CIO at Newfound Research, a financial technology and product innovation company that provides quantitative investment research and author of the article Failing Slow, Failing Fast, and Failing Very Fast.
During this episode you’ll hear:
- For most investors, long-term “failure” means not meeting one’s financial objectives.
- In the portfolio management context, failure comes in two flavors. “Slow” failure results from taking too little risk, while “fast” failure results from taking too much risk. In his book, Red Blooded Risk, Aaron Brown summed up this idea nicely: “Taking less risk than is optimal is not safer; it just locks in a worse outcome. Taking more risk than is optimal also results in a worse outcome, and often leads to complete disaster.”
- A third type of failure, failing very fast, occurs when we allow behavioral biases to compound the impact of market volatility (i.e. panicked selling near the bottom of a bear market).
- In the aftermath of the global financial crisis, risk management was often used synonymously with risk reduction. In actuality, a sound risk management plan is not just about reducing risk, but rather about calibrating risk appropriately as a means of managing risk of both slow and fast failure.
Jonathan Krueger is an Investment Advisor Representative with Lion Street Advisors, LLC, a Registered Investment Representative and a Registered Representative with Lion Street Advisors, LLC member SIPC. Opinions expressed on this program do not necessarily reflect those of Lion Street Advisors, LLC or LionsGate Advisors. The topics discussed, and opinions given are not intended to address the specific needs of any listener. Neither Lion Street Advisors, LLC nor LionsGate Advisors offer legal or tax advice; listeners are encouraged to discuss their financial needs with the appropriate professional regarding your individual circumstance.
Corey is co-founder and Chief Investment Officer of Newfound Research, a quantitative asset management firm that specializes in risk-focused tactical asset allocation. Corey holds a Master of Science in Computational Finance from Carnegie Mellon University and a Bachelor of Science in Computer Science, cum laude, from Cornell University.