The ghost of alpha, margin of safety and risk as a proxy for failure | Chris Schelling

In episode 94, Alex Proimos speaks with Chris Schelling, director of alternative investments, at Venturi Private Wealth.

In this episode, we cover the eventual decline of everything previously called alpha. We discuss how the chasing of alpha is largely a fool’s errands given the significant liquidity in the system, the democratisation of the financial markets, and institutional allocators’ expectations. Then we debate the realistic expectations for alternatives and how investor focus should be on a margin of safety relative to required returns. Finally, we explore three methods to build a margin of safety based on Chris’ book “Better than Alpha”, which include behavioural alpha (thinking), process alpha (habits) and organizational alpha (governance).