Cullen Roche – Pragmatic Capitalism – Jim Dorn – CATO Institute – Marc Lichtenfeld – Stock Watch – Join the Show

Pragmatic Capitalism (http://pragcap.com) was founded by Cullen Roche in the midst of the financial crisis of 2008. Mr. Roche foresaw many of the events that led up to the crisis and felt that the government was slow to react and when it did finally react, responded with the wrong medicine. While also providing relevant news and indicators the website remains very much a sounding board in which the various authors (and readers) can voice their opinions on markets, economics and public policy. In addition to regular commentary by Mr. Roche the website is a collaborative work from many different financial experts.

Mr. Roche is the founder and CEO of an investment partnership. His primary areas of expertise include global macro portfolio construction, quantitative risk management and behavioral finance. Prior to establishing his own business, Mr. Roche worked at Merrill Lynch Global Wealth Management where he helped oversee $500MM+ in assets under management. Mr. Roche is a Georgetown University alumnus, growing up in the DC area and now living in Southern California.

Research & Methodology

All research used at Pragmatic Capitalism is based on a top down investment approach. The research and market methodology is based on cognitive science and the theory of chaos. Through the understanding of market psychology you can derive that markets are non-linear dynamical systems which are susceptible to inefficiencies. Markets are inefficient in short time periods due to their chaotic nature (a symptom of human psychological irrationality). This creates opportunity.

Based on this methodology we employ risk management structures that account for the possibility of short-term inefficiencies and random occurrences within large and liquid systems. Although there are short-term opportunities in markets, risk management is the overriding factor in achieving high absolute returns. Black swans cannot be predicted, but they can be avoided by employing proper risk management. This analytical, quantitative and systematic approach helps us in achieving our goal of high absolute returns.