K.C. Hamann - Quantifying Conviction (S3E1)
Corey Hoffstein and K.C. Hamann delve into K.C.'s investment philosophy and his experiences in the hedge fund universe. The conversation touches on value investing principles, behavioral biases, and risk management lessons that have shaped K.C.'s career. They explore the dynamics of hedge funds, discussing style bias, external pressures, and stock picking skill. K.C. shares insights on process-oriented decision making, evaluating 13F data, and applying behavioral psychology. The episode also covers predictive analytics, a case study on Journal Communications, and examines the future of long-short equity funds and traditional managers.
My guest today is K.C. Hamann, founder of AQIS LLC.
K.C. is a Warren Buffett disciple and spent his first decade in the industry working as an analyst at discretionary, deep value long/short equity hedge funds. Which probably makes him sound like an odd guest for a podcast all about quantitative investing.
K.C.’s experiences, however, lead him to identify a number of biases that he believes pollute the stock picking skills of discretionary analysts. And thinking of a hedge fund as a system whose first goal is survival, he believes that these biases are durable.
For K.C., 13F filings are prospect theory in action. By modeling both the universal and idiosyncratic biases of a manager, K.C. seeks to better identify cases of true conviction which often do not correspond to position size. And it is in these high conviction ideas that K.C. believes are the best opportunities to generate excess returns.
I hope you enjoy my conversation with K.C. Hamann.
Chapters
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Transcript
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