Joining us yesterday on Talking Markets was Corvin Codirla, an investment banking and hedge fund veteran who now teaches quant trading. Corvin brought a refreshing, systematic perspective to The Market House table, focusing on long-term risk premiums and the discipline required to survive volatile cycles.
‘RISK ON’ NO MATTER WHAT?
Despite a “war of words” between the Trump administration and Fed Chair Jerome Powell that initially pressured US assets, the S&P 500 and the Dow both ended on new all-time highs yesterday.
“To quote Victor Niederhofer, what’s the equity market done over the last 120 years? It went up 60,000%,” Corvin said. “Yeah, over the short-term you’re going to have these fluctuations, [but] you are getting paid to hold risk.”
He cautioned against trying to time the market, suggesting that those waiting for a crash often simply miss out on the long-term upward trajectory of the American economy.
THE ‘SHOE SHOP’ MENTALITY
Corvin believes many retail traders fail because “there’s this confusion with trading [that] it’s going to give [them] excitement and status.”
“A hedge fund is a shoe shop,” he said, “That’s why hedge funds make money, because they’re organized and they’ve got routine and it’s boring as hell.”
He added that the biggest downfall for most traders is overtrading to scratch an “itch” for winning, rather than sitting on their hands and waiting for the right catalyst.
POLYMARKET AND THE ‘PIZZA INDEX’
Corvin is fascinated by the transparency of on-chain prediction markets like Polymarket, where every trade can be analyzed to identify “losers” and trade against them. He highlighted how these markets can reveal “truth” or even inside information before it is public.
As a tangible example of creative information gathering, he cited the “Pizza Index”—tracking late-night Papa John’s orders at the Pentagon—which spikes just before major geopolitical events like the kidnapping of Maduro in Venezuela.
CORVIN’S CURRENT OUTLOOK
GOLD
Corvin views gold as being in a parabolic trend that is the “obvious fingerprint” of the current decade. He sees it as both an investment and a speculation, driven by loose monetary policy and doubling costs for rent, food, and gas. He suggests that as long as 100% of the market doesn’t have “overarching conviction,” the trend likely has room to run.
BONDS AND THE DOLLAR
While the traditional 60-40 portfolio was hammered in 2022, Corvin remains aware of the equity risk premium. However, he has lowered his exposure to long-duration bonds, questioning if the massive decline in interest rates seen from the 80s to the 2010s is a one-off historical event. Conversely, he views the US Dollar as a great hedge for gold and Treasuries because it is often inversely correlated, helping to “smooth out” portfolio performance.
SYSTEMATIC RULES
To separate real trends from noise, Corvin advocates for rule-based trading over “shooting from the hip”. A simple yet robust rule he suggests for retail investors is the 120-day moving average: buy when the price is above and sell when it is below.
He believes this systematic approach helps traders avoid “shiny object syndrome” and gives them the confidence to stick with a strategy even during a drawdown.
STRESS TESTING
When it comes to portfolio protection, Corvin argues that a 10% or 20% drop is “nothing” or a “walk in the park”. He teaches his students to stress test for 50% drawdowns, looking for scenarios where both bonds and equities might crack simultaneously, such as during periods of high inflation.
Thank you to everyone who tuned in live…!
Important Disclaimer: It is crucial to remember that this article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor to assess your risk tolerance, investment goals, and overall financial plan.
