From a Billion-Dollar Desk to a Quant System

Watch: From a Billion-Dollar Desk to a Quant System

A short video deep dive on this topic. Prefer to read? The full post is below.

I Learned How the Great Ones Invest by Sitting Next to One

For four years, I sat beside a legendary Swiss value investor who managed billions. My job was to trade for him. My real education was watching how he thought. He was always fully invested, every penny, long only in stocks. What stuck with me most was how he read quality in the numbers. He saw what gives a business pricing power and what makes its earnings durable. He read a balance sheet, an income statement, and a cash-flow statement the way others read a story. Year after year, I watched that discipline compound his capital into billions.

That left one honest limit. Every decision rested on one man's opinion: which stocks to own, and when to be fully invested or defensive. Years later, my partner Lukas and I asked a harder question. How do you keep that discipline every single day, without relying on one person's view? Our answer was to base it just on data instead. We built it into a system, and that choice guided everything that followed.

What the Master Got Right

Great value investing is not about buying cheap for its own sake. The essence is simpler and more durable than that. I watched it hold up through calm markets and stressful ones.

• Read quality in the numbers. Pricing power, durable earnings, and what the financial statements reveal about a business.
• Demand a margin of safety. Insist on a gap between price and worth, and learn from the mistakes others made before you.
• Think independently. Form your own view from the data, not from the crowd or the headlines.
• Stay patient. Let good businesses compound over years, and ignore short-term noise.
• Stay invested in quality, long only. He held quality stocks through the cycle and let them compound.

One caution before we go further. The essence we inherited is quality, a margin of safety, and patience. It is not a reflex to buy only cheap stocks, and we do not avoid a premium price on an excellent business. One thing the master did not do was step aside when markets turned. He stayed fully invested through every storm. Protecting the whole portfolio with a brake is our own addition, and the larger margin of safety now lives at the portfolio level. I will come to that below.

The Honest Limitation: Even Legends Are Human

Here is the part most strategies will not admit. Even the most disciplined human investor leans on personal opinion, not data. That opinion carries three weaknesses that never fully go away.

Emotion

Legends still feel fear and greed. The best ones manage it well, but no one removes it entirely. It showed in the biggest crises since 2000, in 2001 and 2008. Staying fully invested through those falls meant real trouble and large losses.

Bandwidth

No single person can re-check more than 20 risk signals across global markets every night, for years, without missing one. You also cannot stay on top of every stock in a portfolio of 15 to 30 names by feel. That takes process and data.

Consistency

Discipline erodes. Some days you are tired, distracted, or simply wrong for human reasons. Without a process, staying consistent over many years is almost impossible.

These are not character flaws. They are the normal limits of being human. A well-built system has none of them.

The Reinvention: The Wisdom Stays, the Fragility Goes

So Lukas and I took those timeless principles and encoded them into rules. The rules run with the same discipline every time, free from fear, fatigue, and drift. That holds in falling markets and in rising ones, where the temptation to chase a rally is just as strong. We did not divide the work into his ideas and my code. We sat across from each other, Ronny pushing on what protects capital and Lukas pushing on what is measurable, until the two became one system. The wisdom of the master stays. The human fragility goes. We call this data-driven, not gut-driven.

A Partnership, Not a Handoff

This system exists because two kinds of expertise met as equals and argued it out. Ronny brought the investing judgment of a value desk where billions were on the line. Lukas brought years in systematic, quantitative investing, and the engine that turns judgment into testable, repeatable rules. Two veterans, 40+ years combined experience. Neither discipline alone gets you here, and that is the real point.

• Quality. Ronny knows what a quality business really is, reading a franchise's durability rather than just its numbers. Lukas built the engine that finds those traits across the whole market by data, at a scale no desk can cover by hand.
• Capital protection. Ronny carried the value desk's obsession with not losing capital. Lukas made it executable as the Risk Overlay, with more than 20 indicators recomputed every night and exposure set automatically.
• Signal versus noise. Ronny sanity-checks that the system owns sensible businesses. Lukas brought the validation that proves an edge is real and not luck: walk-forward testing, robustness checks, and competing portfolio versions tracked live.
• Patience and process. Ronny brought patience and a long-horizon temperament. Lukas brought equal-weight construction and the daily experiments that keep the strategy honest.

Several of these pieces are quant-native. They did not come from the value tradition. Traditional value investors stay invested and ride out the falls. A systematic, nightly, multi-indicator exposure engine is Lukas's innovation, the part the old value desk simply did not have. Equal-weight construction and walk-forward validation are quant ideas too. They reflect continuous experimentation, the opposite of one investor's fixed conviction. Ronny's hard rule, protect the capital first, became the design brief. Lukas's toolkit is what made that rule run every night, automatically, with no one's nerves involved.

Where We Differ from the Master

We kept the master’s wisdom. We then built a different machine around it. Here is where his approach and ours clearly differ.

Decisions

The master: personal opinion, including his own read of senior management quality. Our system: rules based purely on data, applied the same way every day.

The team

The master: a one-man show, a single point of view. Our system: two veterans who challenge the process from both sides, value and quant.

Market risk

The master: fully invested at all times. Our system: a risk system that adjusts equity exposure every day, based on market conditions.

Concentration

The master: highly concentrated, about 5 to 10 stocks. Our system: 15 to 30 stocks, still focused but more diversified.

Where we invest

The master: Swiss, European, and US mid- and large-cap stocks. Our system: US large-cap stocks only.

Temperament

The master: decisions colored by emotion. Our system: decisions driven by process, free of fear and fatigue.

Trading

The master: buy and hold. Our system: monthly rebalancing, so we act on the best opportunities each month.

Each Principle, Encoded

Each principle the master taught has a direct home in our process. Here is how the human craft becomes a repeatable system.

Pillar 1: the Stock Universe

Systematic screening finds the qualified names by data: fundamental quality, growth, and earnings-revision strength. These are the same traits a great investor hunts for, now found at scale.

Pillar 2: the Optimizer

It decides which qualified names to hold, not how big each position should be. Every position is equal-weight. We favor stocks with real investor demand, a sign that other investors see the same story we do.

Pillar 3: the Risk Overlay

It sets our daily equity exposure from more than 20 risk indicators. This is a margin of safety for the whole portfolio, not just for each stock.

Two more principles run underneath all three pillars. The rules execute every time without fear, greed, fatigue, or bias. And the stated goal is patient, long-term outperformance, twelve months and beyond, versus the S&P 500.

The two engines run on different clocks. The Risk Overlay, our risk-management system, recalculates every night and sets exposure for the next day. The stock portfolio itself rebalances once a month, so we act on the best opportunities without overtrading.

The New Layer: A Margin of Safety for the Whole Portfolio

Classic value investing protects you at the level of each stock. A margin of safety on the price means one bad pick is less likely to ruin you. Yet it leaves one gap. If you stay fully invested and the whole market falls, you fall with it.

Our Risk Overlay closes that gap. Every night, the system recalculates more than 20 risk indicators across markets and sets our equity exposure for the next day. It is a margin of safety at the portfolio level, the part no single person could run by hand.

One thing it is not is a prediction machine. It does not claim to know where the market goes next week. It is time-tested to control drawdown, not to forecast prices. Our edge is meant to come from owning the right companies and not being hit too hard when markets fall.

We always separate a real crisis from a normal dip. In a crisis, which tends to go deeper and last longer, the overlay gears equity exposure down to low levels. That is where it is meant to fall less than the market. Our robustness checks suggest the framework is in place to fall less than the S&P 500 in larger drawdowns. We aim for that, but we cannot promise it, because every correction is different.

A normal pullback of 5% to 10% is different. There we may carry higher exposure, because positive cross-asset signals still ride the prevailing trend. An initial hit is expected and normal before the system adapts to the new conditions. We would rather say that plainly than spin it away.

Picture the alternative. Suppose we stayed 100% invested at all times, no matter what. With stocks that beat the market strongly, when markets turn, the account eventually gets into real trouble. The overlay gears exposure to conditions with the intention of lowering drawdowns, compared with being fully invested all the time. As I write this in June 2026, the system is cautious and holds equity exposure near 26%. That is the brake at work.

“I look at investing like a Formula 1 race. You need to know when to accelerate, and just as importantly, when to brake. Mastering both is what wins races, and it is also how portfolios endure stress and compound over time.”

How We Keep Getting Better

A lone investor refines his views over a career. We refine ours every day. We continuously challenge the strategy with new ideas in daily live tracking of parallel internal portfolio versions. Only the best-performing version runs on eToro and in our own live accounts.

The framework is stress-tested across historical regimes, including 2008, 2020, and 2022. We also validate it out-of-sample with walk-forward testing. That is how a strong track record is proven across real market cycles, just done systematically.

What This Means for You

The point of all this is a process that runs every day, not a strategy that leans on one person's nerves. A solo investor is a single point of failure, one person's judgment and one person's emotions. Two veterans with complementary expertise, encoded into a system, remove that risk. Ronny's eye for quality decides what we own. The system we built together decides how much market risk to carry.

The live results so far reflect that discipline. Since inception in November 2025, the strategy returned +38.5%, against +8.6% for the S&P 500 and +14.9% for the Nasdaq 100. Year-to-date in 2026, it is up +28%, against +8.7% for the S&P 500.

Just as important is how it got there. Our worst drop along the way was -8.8%, smaller than the -9.1% for the S&P 500 and the -11.8% for the Nasdaq 100. These are live, past results, not a forecast. Our absolute goal is remarkable long-term outperformance versus the most-watched index in the world, the S&P 500, with equal or less drawdown along the way.

One more thing matters, because it is often misunderstood. We do not manage anyone's money. We invest our own capital, and our community can choose to follow along. If you choose to copy, eToro replicates our trades proportionally into your own account. You stay in control of your own account at all times.

This is what we mean by institutional discipline meets accessible investing. The craft of a master, joined with a quantitative engine, run by a system, and applied with the same care every single day.

*Past performance is not an indication of future results. Your capital is at risk.*

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