Welcome to Part 2 of our conversation with Managed Futures expert and President Mike Harris of Campbell & Company. In this episode we delve into the specifics of Campbell & Company’s trading programs, how models are added or removed, and the importance of risk management. This episode also explores the managed futures industry as a whole and is a must-hear for anyone looking to gain knowledge about this strategy.

Thanks for listening and welcome to the second part of our discussion with Mike Harris.

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In This Episode, You’ll Learn:

• About Campbell & Company’s trading program.
• How they create a trading strategy.
• Why they use a hypothesis driven system to add new models to their programs.
  

  “We build models based on that economic thesis that we believe will stand the test of time.” – Mike Harris (Tweet)

• About the peer review process they use before adding or subtracting models.
• When do you remove a model? How do you know when it isn’t working anymore?
• About position sizing and why its important.
• How they look at risk through something called Vertical Risk and Horizontal risk.
• Campbell’s systematic approach to risk management.
• How he deals with drawdowns.
  

  “In fact, drawdown recovery in managed futures is much better than traditional assets.” – Mike Harris (Tweet)

• Why he worries about systemic risk and natural disasters.
• Why Mike thinks redundancies are so important.
• The risk of regulation.
  

  “The current regulation that the market is dealing with may actually be a benefit to our industry.” – Mike Harris (Tweet)

• How these strategies tend to perform when interest rates go up.
  

  “In periods of high interest rates, CTAs were actually more profitable than in periods of declining interest rates.” – Mike Harris (Tweet)

• The trend of the managed futures industry and why it has been dominated by European firms in the past 10 years.
  

  “We love competition; I don’t think we’d be involved in the financial markets if we didn’t love a good hearty competition.” – Mike Harris (Tweet)

• What people need to become a successful manager: humility is “at the top of the list.”
• Books that Mike recommends.
• What he would do differently if he could talk to his younger self.
• The importance of managing work and life balance.
  

  “It’s a problem that you can never solve – and so having that passion and competitive spirit is crucial.” – Mike Harris (Tweet)

• What the future looks like for Campbell & Company.

Resources & Links Mentioned in this Episode:

• Learn more about Baltimore and Johns Hopkins University.
•  Mike suggests reading:
  • Hedge Fund Market Wizards by Jack Schwager
  • Technical Analysis of the Futures Markets by John Murphy
  • Trend Following with Managed Futures

*This was originally published in Top Traders Unplugged.

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