SI418: Why Markets Are More Alive Than We Think ft. Richard Brennan

Niels Kaastrup-Larsen and Richard Brennan explore what the science of complex adaptive systems can teach us about markets and trend following. Drawing on research from the Santa Fe Institute, they examine why markets may be better understood as evolving systems shaped by the participants within them rather than machines moving toward equilibrium. They discuss reflexivity, increasing returns and how trends can begin to reinforce themselves, before asking what this means for systematic investors. Along the way, Richard explains why backtests are evidence rather than promises, why taking profits too early can be costly, and why responding to markets may...