[REPLAY] André Perold – Academic Practitioner (EP.02)

Perold argues true alpha is scarce, opportunistic, and expensive—demanding flexible, risk-targeted portfolios rather than fixed asset allocations.

• Alpha is scarce and opportunistic: Perold says edge isn't constant—most investors have no edge most of the time, and alpha shows up where there are 'dislocations' and capital shortages (Japan, distressed debt, niche credit), requiring managers to hunt and pounce.
• Risk defined by drawdown probability, not just volatility: HighVista measures risk as the probability of losing X dollars over a set period, noting volatility clusters—high volatility today predicts higher drawdown risk tomorrow.

Themes, sentiment and reasons are AI-written paraphrases, checked so they never quote an episode. They may contain errors. Not investment advice. Episodes remain the property of their creators.