The Investor with Joel Palathinkal

Episode: Joe Tigay: Catalyst Hedged Equity Fund
Date: November 18, 2025
Guest: Joe Tigay (Catalyst Hedged Equity Fund, Rational Equity Armor Fund, Equity Armor Investments)
Host: Dr. Joel Palathinkal

Main Theme & Episode Purpose

This episode explores the unique investment philosophy, career journey, and market insights of Joe Tigay, manager of the Catalyst Hedged Equity Fund and the Rational Equity Armor Fund. The discussion centers on risk-managed exposure to mega cap tech equities, long volatility strategies, the transformation of portfolio management via technology (especially AI), and personal perspectives on industry leadership and decision-making.

Key Discussion Points & Insights

Joe Tigay’s Background & Early Influences

• Family & Economics Roots: Growing up as one of six siblings, Joe credits his family dynamics and his psychologist-entrepreneur father with shaping his understanding of resource allocation and economics.
  • "My path to finance really started at the dinner table... you learn quickly the allocation of scarce resources." (03:13)
• Sports & Leadership: Athletics, especially team sports, taught him leadership, competitive drive, and the value of teamwork—skills he carried into trading.
  • "I love the competition. I love competing with my teammates. Just that whole team sports element was really compelling to me." (03:48)
• Contrarian Mindset: Attending Michigan State, despite a family legacy at University of Michigan, represented an early contrarian move, foreshadowing his willingness to go against consensus.
  • "I was a black sheep and just took a big contrarian step..." (04:28)

Trading Floor Beginnings & Transition to Portfolio Management

• First Experiences at CBOE: Joe describes the open outcry system on the S&P 500 pit as energetic, chaotic, and deeply appealing—a true “big leagues” for him.
  • "The second I stood on that floor... I was hooked. I saw the excitement, the yelling and screaming... This was love at first sight for me." (05:40-06:39)
• Market Making Mentality: He highlights the skepticism and rapid problem-solving needed as an options market maker, contrasting it with more straightforward equity trading.
  • “Options market makers have to be cynical... deciphering different clues.” (07:38-08:15)
• Learning from the Best: Importance of understanding participant flow and reacting to informational cues when trading, e.g., aligning with large, well-informed institutional flows.
  • "I want to be on his side because he might have information that I don't know." (08:47)

Evolving Role of Technology and AI in Investing

• Potential & Limits of AI: Joe sees AI/quantitative technology as fantastic tools for speeding research and analysis but remains skeptical about AI truly replicating the nuanced judgment of human traders—at least in the near term.
  • "It's outstanding... but from the human standpoint, I don't know if AI is going to be able to pick up on that level of complexity." (10:43-11:10)
  • "These are really amazing tools, really amazing software built by humans for humans." (13:11)
• Humans as Orchestrators: He positions human managers as “conductors” who guide AI, rather than being replaced by it—at least for now.
  • "Humans are still needed to be... the conductor... Humans are still going to be kind of guiding the AI and telling them what to do instinctually." (11:51)

Portfolio Construction and Fund Management Philosophy

• Combining Volatility and Equity: His funds practice long equity positions with a long volatility hedge—often using VIX derivatives—to manage risk and imbalance, especially in bubbles.
  • "We are long volatility with our long equity exposure... owning both at the same time, but buying more [volatility] when it's low and then selling it once it goes higher." (14:15-15:30)
• Natural Rebalancing via Volatility: Stresses mean-reversion in volatility as a natural risk management tool, preserving capital during drawdowns while allowing for “buy low, sell high” opportunities.
  • "It's a built-in, sell high, buy low component to the portfolio." (15:28)

Team Building & Attributes for Success

• Emotional Consistency: He values positivity, calm under pressure, and a level-headed approach among partners—particularly during market turbulence.
  • "Having that level headedness is absolutely critical. If you're panicking... that's where it just really starts to compound and you really get lost." (17:45-18:20)

Investment Selection & Market Outlook

• Preference for Visionary, Growth-Oriented Management: Looks for companies with visionary leaders (often founders), strong balance sheets, and willingness to take long-term risks (e.g., reinvesting in AI and cloud infrastructure).
  • "Companies that I like the most are the ones that are less focused on beating this quarter... I'm really looking at companies that have a longer vision." (19:34)
• Current Market Focus: Emphasizes mega cap tech: Google, Microsoft, Nvidia, Amazon, Meta, Apple, Oracle. Special excitement for Google’s quantum computing work and future of physical AI (e.g., Tesla, robots, automation).
  • "Google is just... that's my favorite company right now actually, just because of everything that they're in. They also have, I think, the lead in the quantum..." (25:49-26:20)

Elon Musk, Tesla, and the Role of Visionaries

• Musk’s Leadership: Joe sees Musk as a rare combination of salesperson, futurist, and product genius, indispensable to Tesla’s trajectory.
  • "Bottom line is I would not want to be in Tesla without Elon. He's a fantastic salesman and a fantastic futurist." (22:20-22:50)
• On Showmanship: Joe draws parallels to Steve Jobs in terms of product launches and market impact.
  • "It does remind me of Jobs... with the 'but wait, there's just one more thing.'" (24:55)

Technology’s Accelerating Pace & AI’s Impact

• Rapid Development: Both host and guest marvel at the pace of tech change—noting transformative moments like the launch of Uber and advancements in generative AI (e.g., Google Gemini, OpenAI GPT).
  • "I like to call it the Uber moment. That first time when I saw that Uber car come up on my app... I felt that this year building a website with AI." (27:10-28:00)
• Google’s Gamble on AI: Joe praises Google’s rebound in AI, improved products, and strategic partnerships (e.g., Gemini integration with Apple).
  • "Obviously their Gemini is as good as ChatGPT if not better now in my opinion... they're using it to augment their search revenue." (29:44-30:24)
  • "Is it going to be I need to chatgpt something or I need to Google something going forward?" (30:42)

Risk Management, Rebalancing, and Navigating Bubbles

• Cautious Optimism: Joe frames the current market as “potentially a bubble,” but distinguishes between bubbles bursting immediately versus slow expansion, noting opportunity in both if properly hedged.
  • "I'm agnostic to that. I think I'm excited if we go up for another five years... If that's the bubble, you can sign me up for that." (31:13-32:16)

Research Habits & Staying Informed

• Diverse Sources: Joe tracks Google Trends, Bloomberg, and a variety of media—preferring multiple perspectives over any single narrative.
  • "I have a tendency to want to get many different opinions... it's not always like definitive one reason." (34:49-35:22)
• Price Action & Technical/Fundamental Analysis: Watches VIX, S&P 500, Nasdaq, and sector leaders like Nvidia closely to gauge market movements; balances fundamentals (company strength) with technical signals (moving averages, volatility cues).
  • "Maybe just the bottom line, just the price action is the most important thing to follow." (35:54)
  • "The VIX is down or soft and the market's also soft... this is maybe an exhausted sell off... vice versa." (37:25-37:52)

Mentorship & Career Advice

• Role Models: Gives credit to his father and colleagues Brian Sutland and Luke Ribari for teaching him focus and market skepticism.
  • "Just kind of focus in on what you're good at and the rest will kind of follow and play your game." (38:26)
• Advice for New Investors: Urges authenticity, resilience, and usefulness—plus long-term thinking over short-term fads.
  • "Be yourself and let yourself be out there, be in the arena, let yourself make some mistakes. It's okay. You'll be able to bounce back." (33:25)

Notable Quotes & Memorable Moments

• “My path to finance really started at the dinner table... you learn quickly the allocation of scarce resources.”
  — Joe Tigay (03:13)

• “The second I stood on that floor... I was hooked. I saw the excitement, the yelling and screaming... This was love at first sight for me.”
  — Joe Tigay (06:00)

• "Options market makers have to be cynical... deciphering different clues."
  — Joe Tigay (07:38)

• "I'm skeptical of the narrative that AI is going to be destroying humanity."
  — Joe Tigay (13:11)

• "It's a built-in, sell high, buy low component to the portfolio."
  — Joe Tigay (15:28)

• "Having that level headedness is absolutely critical... that's where it just really starts to compound and you really get lost."
  — Joe Tigay (17:45-18:20)

• "Bottom line is I would not want to be in Tesla without Elon. Elon is there... a fantastic salesman and a fantastic futurist."
  — Joe Tigay (22:20-22:50)

• "I like to call it the Uber moment... this is amazing... that was the new Uber moment for me."
  — Joel Palathinkal (27:15-28:00)

• "I want to be on his side because he might have information that I don't know."
  — Joe Tigay on trading with institutional flows (08:47)

Timestamps for Key Segments

| Segment | Timestamp | |---------------------------------------------------------------|-----------------| | Joe’s early influences/family/dinner table economics | 03:13 | | Michigan State & contrarian mindset | 04:28 | | First impressions at CBOE trading floor | 05:40-06:39 | | Skills needed for options market makers | 08:22-08:55 | | AI’s impact and human orchestration | 10:40-13:27 | | Long volatility with equity portfolio strategy | 14:09-15:28 | | Hiring and team building philosophy | 17:13-18:20 | | How he selects specific growth holdings | 19:19-21:36 | | Thoughts on Elon Musk and Tesla’s future | 22:20-25:41 | | Google, Gemeni, quantum computing, and “Uber moment” in AI | 25:49-30:49 | | Risk management tactics and “bubble” discussion | 31:13-32:32 | | Research routines and following price action | 34:49-36:34 | | Attributes for technical and fundamental research | 36:49-37:52 | | Mentors and key personal/professional advice | 38:13-39:48 |

Summary

This candid conversation with Joe Tigay offers a blueprint for blending traditional portfolio strategies with modern risk management and technology. Joe’s approach—rooted equally in hard-earned trading experience, humility, and visible excitement for technological progress—delivers valuable lessons for institutional allocators and aspiring investors. Listeners gain a front-row seat on trading floor culture, evolving AI’s role in finance, and the importance of staying curious, flexible, and authentic in a fast-changing market.