My guest this week is Dr. Ben Hunt, the chief investment strategist at Salient and the author of the extremely popular epsilon theory. I’ve always enjoyed Ben’s writing style, particularly his use of farm and animal based analogies to describe market phenomenon. In this conversation, we discuss his recent post the three body problem, why growth has been beating value, and why a strategy that he calls profound agnosticism—a take on risk parity—may be the most appropriate investing strategy in what he views as a very uncertain world. We also discuss some of his favorite lessons from the farm. Please enjoy our conversation! For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag Links Referenced The Three-Body Problem Show Notes 1:54 - (First Question) – Applying the three-body problem to investing 7:24 – Fundamental view of investing, Profound Agnosticism 8:24 – Why has value done so poorly relative to growth in this framework 11:01 - Ben’s thoughts on why value has been underperforming for so long 13:52 – Investors should be able to adapt 17:49 – Thoughts on the risk parity approach 23:23 – Ben’s strategy for working with several teams 26:48 – What’s the best way to gain an edge, top down factors vs company/bond individual analysis 28:29 – How do you measure risk amid the large amount of uncertainty that exists in markets 32:40 – How does Ben personally think about investing 34:41 – Ben’s farm and the investing lessons learned by some of the animals 39:55 – How bees can plan out their entire work structure by the angle of the sun 42:58 – Defining basis risk 44:59 – Personal risk vs portfolio risk 49:30 – The concept of fingernail clean and our perception of what eggs are 53:57 – How ETFs are like mass produced eggs 54:56 – Exploring the idea of quality vs scaling 58:39 – What is the current challenge/puzzle that Ben is focused on right now 1:01:59 – What is Ben looking for when looking into game theory and applying it to the words that are published and spoken about investing 1:03:57 – Most memorable day on Ben’s farm 1:05:04 – Kindest thing anyone has done for Ben Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

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“What did the council decide on item 42?” — answered with the speaker and the moment.