How to Build a Successful Investment Framework

TL;DR

To build a successful investment framework, focus on understanding core investment principles applicable across asset classes. Develop a clear process for making allocation decisions, and emphasize deep value frameworks while addressing practical aspects such as trade selection and portfolio sizing. This approach will enhance your ability to construct an effective investment strategy.

Transcript

RAOUL PAL: Dylan Grice, finally we get you back. You're one of the first people we ever had on Real Vision. Everyone's like, oh my God, he's the smartest man in the world. Then you went undercover, and nobody's ever seen you again. Tell us, give people a bit of background about you, where you've come from and what you're doing now. It's been a real... Read More

Key Insights

• 👨‍💼 Grice's career journey involved transitioning from economist to property trader, then becoming a strategist and finally assisting in building a family office's investment business.
• 📼 His experience in multi-asset allocation highlighted the importance of common investment principles across different domains.
• 🥺 Grice's focus on practical investing questions led him to establish Calderwood Capital, offering research and fund management services.
• ↩️ He believes in the value of deep value frameworks and emphasizes considering expected returns in investment decisions.
• 😘 Valuation is a significant aspect of Grice's approach, but he does not strictly adhere to a low price-to-earnings (PE) ratio criterion.
• 👨‍🔬 Grice's research tackles the practicalities of portfolio construction, including trade selection, portfolio positioning, and sizing.
• 🎙️ More videos with Raoul Pal:
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Questions & Answers

Q: What motivated Dylan Grice's transition from strategist to helping build a family office?

Grice desired to do more than just talk and saw an opportunity to join one of Europe's largest family offices, Calibrium, to assist in establishing and embedding their investment philosophy.

Q: Why did Grice consider economics as practically useless?

Grice believes that theoretical economics is ineffective when it comes to predicting unemployment and markets. He finds predicting markets and making investment decisions more challenging and interesting.

Q: How did Grice's role evolve at Calibrium?

Initially, Grice built and managed the equity business but later shifted to making allocation decisions across different asset classes, such as equities, credit, rates, and precious metals.

Q: What is the vision behind Grice's new venture, Calderwood Capital?

Calderwood Capital aims to have both a research side and a fund management side. The research focuses on practical investment questions, while the fund management aims to implement a deep value framework.

Summary & Key Takeaways

• Dylan Grice started his career as an economist and transitioned to become a property trader before becoming a strategist.

• He played a crucial role in building the equity business for a family office in Switzerland, eventually expanding to multi-asset allocation.

• Grice recently launched a research business, Calderwood Capital, focusing on practical investment questions and deep value frameworks.