Feb 08, 2024

Episode 291 – The Quant Winter, and is Canada Pension Plan a Scam?

Are you ready for a deep dive into quantitative investing, the private credit trend, and the Canada Pension Plan (CPP)? Then this episode is for you! Joining us today is Robin Wigglesworth, The Financial Times’ global finance correspondent, and author of Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever, a groundbreaking book about the past, present, and future of passive investing. We talk with Robin about quantitative investing and the ideas he lays out in his article ‘A Quant Winter’s Tale’, before hearing his insights on the private credit trend and his intriguing new book titled Bonds, all about the history of the bond market. Today’s episode also features our Mark to Market segment, where Mark McGrath joins us to talk about the Canada Pension Plan (CPP), providing a comprehensive overview of its inner workings, his response to the criticisms levelled against it, and why he believes it’s of huge benefit to a great many Canadians. Next, we take a look back at our conversation with Alexandra Macqueen on annuities before sharing our thoughts on its relevance to today’s discussion and why it’s worth revisiting. Be sure to stay tuned for our after-show segment where we share our book, blog, and viewing recommendations, plus our favourite reviews, followed by a sneak peek of some of the exciting guests we have coming up. Press play now for a deep dive into quant investing, the hype around private credit, saving for retirement, and a whole lot more!

 

https://youtu.be/jwDrUKY_Rcs

 

Key Points From This Episode:

(0:04:05) An introduction to today’s guest, Robin Wigglesworth, followed by his breakdown of quantitative investing.

(0:09:59) Theories on what happened to factor investing between 2018 and 2020; what is meant by the quant winter and why we are now in a quant summer.

(0:15:13) How investor sentiment regarding factor investing changed after the quant winter and how the algorithm aversion phenomenon impacted it.

(0:20:14) The collapse of value; the impact of the COVID-19 pandemic (plus its role in the quant winter), and where we are right now.

(0:23:24) An overview of quant investing products, and why many of them are too expensive.

(0:25:51) Breaking down the noisy-ness in factor data and Robin’s predictions for where factor investing will go from here.

(0:36:36) Unpacking the hype around private credit: indications that it’s in a bubble, how it could impact broader trends, and who stands to benefit most. 

(0:40:22) We hear about the fascinating book that Robin is currently working on about the history of the bond market.

(0:41:50) Our Mark to Market segment on the complicated (and divisive) Canada Pension Plan (CPP); how it works, its profound benefits, and responding to the criticism it has received.

(01:01:31) A look back at our conversation with Alexandra Macqueen on annuities and how it links in with today’s discussion.

(01:04:33) Our after-show section: an update on the Money Scope Podcast, reading recommendations, reviews from our listeners, and some of the incredible guests we have coming up!


Participate in our Community Discussion about this Episode:

https://community.rationalreminder.ca/t/episode-291-the-quant-winter-and-is-canada-pension-plan-a-scam-discussion-thread/27737 

Books From Today’s Episode:

Pensionize Your Nest Egg — https://www.amazon.com/Pensionize-Your-Nest-Egg-Allocation/dp/1119025257

Fortune’s Children: The Fall of the House of Vanderbilt — https://www.amazon.com/Fortunes-Children-Fall-House-Vanderbilt/dp/0062224069

Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever https://www.amazon.com/Trillions-Renegades-Invented-Changed-Finance/dp/0593087682

Links From Today’s Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582

Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/

Mark McGrath on X — https://twitter.com/MarkMcGrathCFP

Robin Wigglesworth — https://robinwigglesworth.com/

Robin Wigglesworth on LinkedIn — https://www.linkedin.com/in/robin-wigglesworth-17101722

Financial Times — https://www.ft.com/

‘Quant Winter’s Tale’ — https://www.ft.com/content/e0f98278-432e-4ece-b170-2c40e40d2835

Episode 184: Robin Wigglesworth — https://rationalreminder.ca/podcast/184

Episode 93: Cliff Asness from AQR — https://rationalreminder.ca/podcast/93

Cliff Asness — https://www.aqr.com/About-Us/OurFirm/Cliff-Asness-Bio

AQR — https://www.aqr.com/

Two Sigma — https://www.twosigma.com/

D.E Shaw — https://www.deshaw.com/

CPP Investments — https://www.cppinvestments.com/

StatsCan — https://www.statcan.gc.ca/en/start

Financial Planning for Canadian Business Owners Episode 116: True Cost of CPP with Aravind Sithamparapillai — https://jasonpereira.ca/all-content-jason-pereira-toronto/true-cost-of-cpp-with-aravind-sithamparapillai-e116

Episode 59: Alexandra Macqueen — https://rationalreminder.ca/podcast/59

Griselda Blanco — https://www.imdb.com/title/tt15837600/

Cocaine Cowboys — https://www.imdb.com/title/tt0380268/

Queen of the South — https://www.imdb.com/title/tt1064899/

Farnam Street — https://fs.blog/

24 in 24 Reading Challenge — https://rationalreminder.ca/24in24

The Money Scope Podcast — https://moneyscope.ca/

The Money Scope Podcast on YouTube — https://www.youtube.com/@moneyscopepod

About The Author
Cameron Passmore
Cameron Passmore

Cameron Passmore has been a leading advocate for evidence-based, systemic investing for over 20 years in the Ottawa area. Today, Cameron and his team serve a broad range of affluent clients across Canada.

Benjamin Felix
Benjamin Felix

Benjamin is co-host of the Rational Reminder Podcast and the host of a popular YouTube series.

Mark McGrath
Mark McGrath

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