Host David Clark sits down with Gary Hui, Portfolio Manager at Geometrica, to unpack how equity investors can consistently generate asymmetric, double-digit returns without relying on leverage. Active managers often struggle with crowded consensus, cognitive bias, and unpredictable market drawdowns - particularly when navigating disruptive thematic shifts like AI capex or sector-wide sell-offs. Gary breaks down Geometrica’s systematic search process, which pairs quantitative machine learning with deep fundamental diligence to spot structural change before it gets priced in. The conversation delves into the mechanics of their barbell strategy: combining dislocated recovery plays like Netflix and ResMed with exponential growth compounders like Celestica and Fujikura. Gary also offers a candid, post-mortem analysis of July’s sharp market drawdown, examining factor risk, prime brokerage leverage unwinds, and the hard lessons that led to refining their risk models. Designed for sophisticated investors who demand rigorous logic over market noise, this conversation provides actionable insights on avoiding left-tail risk and capitalising on market inefficiencies. Systematic Search vs. Idea Generation: Why relying on traditional idea generation limits you to your current corpus of knowledge, and how machine learning screens surface high-conviction, non-consensus opportunities like AppLovin. The Long/Short Barbell Strategy: Harvesting alpha from two distinct inefficiencies, market dislocations (oversold sentiment) and exponential growth (underestimated structural change). Dissecting Market Overreactions: Real-world case studies in causality, including Netflix’s post-COVID subscriber dip, ResMed’s GLP-1 scare, and current dynamics in software and real estate networks. Anatomy of a Forced Liquidation: A look into how volatility spikes in VaR models trigger prime brokerage deleveraging, and why factor risk modeling is critical to avoid overstaying momentum trades. Intellectual Independence: How applying rigid logic, inspired by Spinoza’s geometric proofs, helps systematic fundamental managers protect compounding capital and mitigate left-tail events. This podcast has been delivered to you by Koda Capital Pty Ltd (ABN 65 166 491 961 AFSL 452 581) (Koda) and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. To the extent this material does contain any general advice, it has been prepared without considering your objectives, financial situation or needs, and because of this, you should, before acting on it, consider the appropriateness of the advice, having regard to your objectives, financial situation, and needs. This material may include data, research, and other information from third party sources. Koda makes no guarantee that such information is accurate, complete, or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are based on current expectations, estimates, projections, opinions, and beliefs of Koda. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed on them. Koda’s Financial Services Guide (FSG) can be found here: https://kodacapital.com/wp-content/uploads/Koda-Capital-FSG-Version-8.7-September-2025.pdf, or we can email a copy on your written request.
