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Bookshop Genres Conquering the Seven Faces of Risk: Automated Momentum Strategies that Avoid Bear Markets, Empower Fearless Retirement Planning by Scott M. Juds
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Conquering the Seven Faces of Risk
Automated Momentum Strategies that Avoid Bear Markets, Empower Fearless Retirement Planning
by Scott M. Juds

Overview

Risk is not a one-dimensional problem cured by a single dose of diversification. It's a multidimensional problem, and diversification’s passive risk reduction is only just the start. At least since Markowitz developed Modern Portfolio Theory 65 years ago, risk has generally been measured as the standard deviation from average return. However, Behavioral Economics (and even the dictionary) say risk is really about the loss of value. Risk has at least seven unique faces, including (1) Single-Stock Risk, (2) Market Volatility, (3) Bear Market Crash, (4) Momentum Loss, (5) Backtesting Deception, (6) Strategy Hired/Fired Late, and (7) Retirement Savings Will Not Be Enough. The elephant in the room for most people facing retirement is a serious retirement savings shortfall – making their most serious risk about insufficient returns. Fortunately, a Royal Society Fellow, a National Medal of Science winner, and a trio of Nobel Laureates have laid the foundation for active risk reduction and better returns that have forever changed the game. This book intends to shake the very foundation of the sleepy momentum monoculture that seems happily mired in decades-old, simplistic, risk models that not only fail to treat momentum as the multi-faceted problem it is, but also fail to consider fundamental signal processing methods (older than Modern Portfolio Theory) that reduce the “random walk” part of the signal and improve the probability of making a better investment choice. The book’s principles and methods are described in a manner most ordinary investors will easily grasp, and while it is complicated under the hood (like your car), software tools make it easy to drive.  So, buckle up, turn the page, and let’s go for a ride!  

Read more

Description

This book starts by identifying “the seven faces of risk” and particularly noting that the well-reported retirement savings shortfall is the biggest of them and cannot be addressed by classic diversification – it’s an investment return problem. The book then segues into the troubling analysis and revelation that our financial regulatory agencies, FINRA and the SEC, provide neither a definition nor a measurement of risk and yet arbitrarily judge the client portfolios of defenseless wealth managers during risk audits. To address these problems, a set of new tools are developed: A measure called “Relative Risk” is developed based on a consensus set of industry-standard definitions that enable risk category portfolios to be modeled, quantified, and used as reference standards in assessing and defending the risk performance of any portfolio; and mathematics from the cross-disciplinary fields of information theory and electronic signal processing (think WiFi, cell phones, and digital TV) is brought to bear on momentum trading resulting in the development of Temporal Portfolio Theory. Temporal Portfolio Theory can be thought of as an extension of Modern Portfolio Theory that provides a means to conquer many of the faces of risk through “risk avoidance,” as opposed to “risk dilution” (a.k.a. diversification). Finally, the book employs these principles and tools in numerous example strategies and portfolios that anyone can personally implement and manage with a few trades per year. The book is richly illustrated with over 300 full-color images and charts.

Read more

About the author

Scott is a Founder, President, and CEO of SumGrowth Strategies of Seattle; the developer of SectorSurfer (for individuals) and AlphaDroid (for financial advisors). He holds an MSEE from Stanford University, and a BSEE from the University of Wisconsin – Madison, has been granted over 40 U.S. and foreign patents, and is a panel judge for the prestigious NAAIM (National Association of Active Investment Managers) Wagner Award. Scott has over 30 years’ experience in both hands-on and executive-level positions, including former Founder and Engineering VP of IDX Inc., and VP of Advanced Engineering at EATON Corporation’s Opcon division for industrial photoelectric sensors. Scott has spoken to over 50 investment groups in the past 3 years. 

 

His published works include:

·         “Investment Performance Improvement Utilizing Automated Polymorphic Momentum.” (2016 NAAIM Wagner Award winner)

·         "Using Asset Class Rotation to Reduce Risk and Increase Return" 
(AAII Computerized Investing, Feb. 2017)

·         "Satisfying the Prudent Man: Quantifying and Defending Risk" 
(NAAIM Active Manager, April 2017)

·         “Better Sector Rotation Performance Through Signal Processing and Problem Segmentation” (AAII Computerized Investing, Aug. 2017)

·         “Photoelectric Sensors and Controls: Selection & Application”
 (400-page hardcover, Marcel Dekker, New York, 1988).

 

Read more

Book details

Genre:BUSINESS & ECONOMICS

Subgenre:Personal Finance / Investing

Language:English

Pages:260

eBook ISBN:9781543931709

Hardcover ISBN:9781543913750

Overview

Risk is not a one-dimensional problem cured by a single dose of diversification. It's a multidimensional problem, and diversification’s passive risk reduction is only just the start. At least since Markowitz developed Modern Portfolio Theory 65 years ago, risk has generally been measured as the standard deviation from average return. However, Behavioral Economics (and even the dictionary) say risk is really about the loss of value. Risk has at least seven unique faces, including (1) Single-Stock Risk, (2) Market Volatility, (3) Bear Market Crash, (4) Momentum Loss, (5) Backtesting Deception, (6) Strategy Hired/Fired Late, and (7) Retirement Savings Will Not Be Enough. The elephant in the room for most people facing retirement is a serious retirement savings shortfall – making their most serious risk about insufficient returns. Fortunately, a Royal Society Fellow, a National Medal of Science winner, and a trio of Nobel Laureates have laid the foundation for active risk reduction and better returns that have forever changed the game. This book intends to shake the very foundation of the sleepy momentum monoculture that seems happily mired in decades-old, simplistic, risk models that not only fail to treat momentum as the multi-faceted problem it is, but also fail to consider fundamental signal processing methods (older than Modern Portfolio Theory) that reduce the “random walk” part of the signal and improve the probability of making a better investment choice. The book’s principles and methods are described in a manner most ordinary investors will easily grasp, and while it is complicated under the hood (like your car), software tools make it easy to drive.  So, buckle up, turn the page, and let’s go for a ride!  

Read more

Description

This book starts by identifying “the seven faces of risk” and particularly noting that the well-reported retirement savings shortfall is the biggest of them and cannot be addressed by classic diversification – it’s an investment return problem. The book then segues into the troubling analysis and revelation that our financial regulatory agencies, FINRA and the SEC, provide neither a definition nor a measurement of risk and yet arbitrarily judge the client portfolios of defenseless wealth managers during risk audits. To address these problems, a set of new tools are developed: A measure called “Relative Risk” is developed based on a consensus set of industry-standard definitions that enable risk category portfolios to be modeled, quantified, and used as reference standards in assessing and defending the risk performance of any portfolio; and mathematics from the cross-disciplinary fields of information theory and electronic signal processing (think WiFi, cell phones, and digital TV) is brought to bear on momentum trading resulting in the development of Temporal Portfolio Theory. Temporal Portfolio Theory can be thought of as an extension of Modern Portfolio Theory that provides a means to conquer many of the faces of risk through “risk avoidance,” as opposed to “risk dilution” (a.k.a. diversification). Finally, the book employs these principles and tools in numerous example strategies and portfolios that anyone can personally implement and manage with a few trades per year. The book is richly illustrated with over 300 full-color images and charts.

Read more

About the author

Scott is a Founder, President, and CEO of SumGrowth Strategies of Seattle; the developer of SectorSurfer (for individuals) and AlphaDroid (for financial advisors). He holds an MSEE from Stanford University, and a BSEE from the University of Wisconsin – Madison, has been granted over 40 U.S. and foreign patents, and is a panel judge for the prestigious NAAIM (National Association of Active Investment Managers) Wagner Award. Scott has over 30 years’ experience in both hands-on and executive-level positions, including former Founder and Engineering VP of IDX Inc., and VP of Advanced Engineering at EATON Corporation’s Opcon division for industrial photoelectric sensors. Scott has spoken to over 50 investment groups in the past 3 years. 

 

His published works include:

·         “Investment Performance Improvement Utilizing Automated Polymorphic Momentum.” (2016 NAAIM Wagner Award winner)

·         "Using Asset Class Rotation to Reduce Risk and Increase Return" 
(AAII Computerized Investing, Feb. 2017)

·         "Satisfying the Prudent Man: Quantifying and Defending Risk" 
(NAAIM Active Manager, April 2017)

·         “Better Sector Rotation Performance Through Signal Processing and Problem Segmentation” (AAII Computerized Investing, Aug. 2017)

·         “Photoelectric Sensors and Controls: Selection & Application”
 (400-page hardcover, Marcel Dekker, New York, 1988).

 

Read more

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