Niels Kaastrup-Larsenis the managing director ofDUNN Capital (Europe)and heads up the business development in Europe and Asia. Niels has been in the managed futures business since 1990. Holding management positions at several leading commodity trader advisors and has helped investors place more than $2 billion in trend following strategies.
“I certainly had to realize that to overcome emotions in the investment world and be rational and critical and to preserve those kinds of thinking. Then becoming a quant or a rules-based investor was the way to go to automate things. So you’ll know exactly what you want to do and have a plan.”
Worst investment ever
Doing what he was trained to do
When Niels started as a young trader, his job was partly to provide liquidity to the clients of the bank he was working for. He would inherently be speculating during the day or even during the week by holding positions in bonds that his bank was making markets in. And so, the mantra that many people know as buying low and selling high was really what he was trained to do, but on a discretionary basis.
The fear of the unknown
When there were big changes, Niels found out very quickly how difficult it was to figure out where the low was because the low may be very different in reality to what he thought. So, because of not knowing what he did not know, he certainly had quite a few very painful days during that time.
The power of momentum
What he did not know at the time when he was just a young trader was the power of momentum and how important it is to follow the overall trend in the market, not trying to go against the market trend.
Do not listen to your gut feeling
Our gut feeling is more of a warning system to keep us safe. But cannot be used as a guide or measure for making financial decisions.
Donotbe guided by your emotions
These emotions would sometimes lead us doing the opposite of what we should. We end up becoming more risk-seeking towards the end of a bull market and be very conservative just before the bear market is coming to an end. So we end up being guided by emotions, which are complete disasters when it comes to making financial decisions.
Be open-minded and trust the evidence. Do proper research. Niels has advised watching some Ray Dalio videos.
No. 1 goal for the next 12 months
Niels’s focus will be continued education, helping investors build safer and better performing portfolios through his work at DUNN Capital and his podcast, Top Traders Unplugged.
“We should all remain students of life and keep expanding our knowledge.”