Outlook for Commodity Trading Advisors
- Dec 7, 2023
In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with David Martin, Founder & CIO of Martin Fund Management, a commodity trading advisor (CTA) based in Palm Beach. David shares his outlook for investing in CTAs including the greatest opportunities, challenges and more.
Hello and welcome to the EisnerAmper podcast series. I'm your host, Elana Margulies-Snyderman. And with me today is David Martin, founder and CIO of Martin Fund Management, a commodity trading advisor based in Palm Beach, Florida. Today David will share with us his outlook for investing in CTAs, including the greatest opportunities, challenges, and more. Hi David, thank you so much for being with me today.
Thanks for having me, Elana.
Absolutely. So to kick off the conversation tell us a little about the firm, and how you got to where you are today.
Sure. So I'm originally from Connecticut. I went to the Wharton School at Penn. in Philadelphia. After school I came to New York to work for Cooper Neff, which was an elite options trading firm at the time. I started to develop my options models there, and after a few years went out on my own and had a long and successful proprietary trading career.
I started Martin Fund Management in 2013 with these models, and in 2020 we launched the current version of our trading system for a more institutional environment, and that's where we are focused today.
Great. So David, given your focus on CTA investing, love to hear your overall outlook for the space.
Sure. Well, the short answer is we have fears of recession, versus an early stage commodity supercycle. We believe the latter is beginning right now. Why do we believe that? Well honestly, I think the opportunity set here is inflation. Decades of chronic underinvestment in the commodity production sector are now colliding with increased global demand, pretty much for all commodities, and a just-in-time production model is no longer enough for today's environment.
Also, global reindustrialization is required to transition to new clean technologies. This will require significant raw material inputs to create this new infrastructure, not just in the US, but honestly, on a global scale, particularly for the commodities that we trade. We view this multi-decade trend as highly supportive for all raw materials, but especially food assets.
And Dave, more specifically, where do you see some of the greatest opportunities in this space, and why?
So primarily I believe that the greatest opportunities are when the price action that we see in our markets does not match the fundamentals. We think this is a significant opportunity.
And on the other hand, David, what are some of the greatest challenges you face with your investing space, and why?
Sure. I think the greatest challenges are cognitive biases and decision making by both investors and market participants. Both are a challenge, but also an opportunity to generate Alpha.
David, great insights into your CTA investing outlook. And wanted to see if you have any final thoughts you'd like to share with us?
Sure. So just from a firm level, we are beginning to speak to a few large multi-manager platforms about a possible collaboration, and we're also partnering with a UK marketing firm to expand our footprint outside the US, in the UK and Switzerland.
Well, David, I wanted to thank you so much for sharing your perspective with our listeners.
My pleasure. Thank you for having me, Elana.
And thank you for listening to the EisnerAmper podcast series. Visit eisneramper.com for more information on this and a host of other topics. And join us for our next EisnerAmper podcast when we get down to business.
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Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.
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