An Upheaval: Systematic Thinkers Toll The Bell

Sep. 17, 2018 12:30 PM ETAIG, BAC


  • On the 10th anniversary of the 2008 financial crisis, deep thinkers predict a potential crisis that can lead to social and political upheavals.
  • Monetary policy will be a key factor in determining the timing of a potential crisis.
  • Passive ETF investing and model-driven quantitative investing can amplify sharpness of pullbacks.
  • Insights into the timing of the crisis, and what can one look at to possibly predict its onset.

Market Pulse ~ Stock Market Update

The 10-year anniversary of the last economic crisis appears like an appropriate time to toll the bell on the next economic crisis. It was this month in 2008, that mainstream America finally came to reckon with the economic meltdown as Lehman Brothers went bankrupt, Merrill Lynch was acquired by Bank of America (BAC), and the government bailed out AIG (AIG), all within a matter of two days. And things went further south over the ensuing months, leading to the Great Recession, the worst economic crisis since the Depression. ~ Financial Crisis 2008 & Stock Market

One of the greatest investors of our times, hedge fund titan Ray Dalio, founder of Bridgewater Associates, the largest hedge fund in the world with over $150 billion in assets, this week released his treatise-like book titled A Template for Understanding Big Debt Crises. As he discussed the last financial crisis as an honored media guest on various shows, what was equally noteworthy was his viewpoint on the next crisis. Now Ray is one person who has been right more often than wrong - after all, you don't get to $150 billion in assets being the other way round.

Ray Dalio ~ Ray Dalio of Bridgewater AssociatesRay has been an early adopter of algorithmic-driven investing and thinking, of which more can be learned from his TED talk. He is a great practitioner of such systematic thinking that distills down the lessons of his market experience into computer-driven algorithms. He achieves and propagates such thinking through a set of principles and a concept of radical transparency, espoused in his aptly titled book, Principles. So it's always helpful listening to what Ray has to say, even if one holds a different opinion.

Incidentally, systematic investing strategies, as many are aware, is the use of a rules-based system and quantitative models to guide investment decisions, and more can be

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