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In Episode 65, we welcome CTA and commodities expert, Emil van Essen.\nMeb starts with a fun bit of trivia \u2013 if you mesh his and Emil\u2019s name, coming up with \u201cEmil Faber,\u201d can you guess in which movie that name appears?\nIt turns out it\u2019s from the classic comedy, Animal House. \u201cEmil Faber\u201d was the founder of the movie\u2019s \u201cFaber College\u201d and under his statue was his quote, \u201cKnowledge is good.\u201d\nAfter Emil gives us a bit about his background, the guys jump into the deep end. Emil trades managed futures, and while most people think \u201ctrend following\u201d when they hear \u201cmanaged futures,\u201d there are other styles. Emil tells us about a style he uses often, spread trading.\nEmil looks at the term structure in commodities futures contracts. There\u2019s a price for every month going out in time. You can trade the differences between those months (calendar spreads). He also trades relative value and roll arb. Emil likes these strategies because there\u2019s tons of alpha available.\nMeb pauses to explain a bit for any listeners who are less familiar with all this. He explains exposure to the futures markets, using oil as an example. This leads into a discussion about the growth of commodities markets. Back in the 2000s, commodities went from being just a product to an investment vehicle. So the powers that be created indices and various commodities products to meet this demand. Investments in commodities exploded, driving up prices.\xa0\nThis dovetails into what Meb calls \u201cone of the dirty secrets of indexing,\u201d which is how many indices can be front-run. Meb tells us how, for some 1.0 commodities indices, the slippage was in the order of 3-4% per year.\nMeb then asks Emil to describe what he looks at when establishing a position. Is it fundamental? Technical? Emil tell us it\u2019s very important that you use both, because \u201cyou have to understand the fundamentals because things change.\u201d\nNext is a great conversation about front-running trend followers. This is something that Emil does. He knows that if there\u2019s a big move, the trend followers are likely all on the same side of the position, so when it comes time to roll the front month, and Emil generally knows when that will happen, Emil takes advantage of the price movement. Meb and Emil then discuss the easiest way to implement this strategy.\nA bit later, the guys discuss what themes/positions Emil is interested in right now. He tells us how there has recently been a shortage in gasoline, so gas has been running up against crude oil. It\u2019s at high levels now, and Emil thinks it\u2019ll come down. Emil also tells us that he\u2019s looking at grains, the energy markets, and certain metals including platinum and palladium.\nThis leads into a discussion on oil. Meb asks Emil\u2019s take on the industry.\nEmil gives us some great background on what drove oil up so high, and why it crashed. Then he discusses the technological revolution in oil drilling, the result of which is that the cost of finding and developing oil has collapsed. There are some great details in here which oil investors won\u2019t want to miss, but Emil wraps up this part of the conversation by saying \u201cthe days of $80 oil \u2013 that\u2019s a long way away.\u201d\nMeb then asks what areas of commodities Emil likes right now. Emil tells us his thoughts on at what level crude is buy. And he mentions a certain metal which he considers a \u201cno brainer.\u201d You\u2019ll have to listen for the details.\nThere\u2019s way more in this episode: how Emil views gold in light of new cryptocurrencies\u2026 A Twitter poll Meb conducted that reveals just how stubborn some investors can be when it comes to selling out of overvalued equities\u2026 Where Emil has seen the most investors make the biggest mistakes over his 25+ year career\u2026 The dangerous false belief that \u201cwe\u2019ve seen this before\u201d in the markets, and how computerized investing is taking us into uncharted waters\u2026 And finally, Emil\u2019s most memorable trade (which was a loser that will get your blood racing).\nWhat are the details? Find out in Episode 65.\nLearn more about your ad choices. Visit megaphone.fm/adchoices