Don’t Fear the Reaper

Today's note, "Don't Fear the Reaper", takes an Adaptive Investing crack at what I believe is the most pressing issue in portfolio construction - the identification of truly diversifying positions. The crucial evolutionary distinction between phenotype (outward appearance) and genotype (fundamental genetic code) shows why it is important to focus on the "market DNA" of a security or strategy, not just its obvious external characteristics. By focusing on the market DNA of a security or strategy rather than its skin, I believe we can significantly reduce our reliance on mechanistic models of markets and the economy in portfolio construction .. a highly useful adaptation for an uncertain investment world where political shocks to our economic models seem to lurk behind every corner.

Read "Don't Fear the Reaper"

All the best,

Ben