I agree. People just have to learn to accept that drawdowns and periods of poor performance are just part of ANY system. Eg. Renaissance went through a period of poor performance earlier this year. Paul Tudor Jones has had some very average years. Bill Dunn started off with a 50% drawdown.
I think my post made it very clear that I understood and agreed with this point. We are talking about exactly the same thing, not two different things. My point is that in the infinity of time you MAY WELL see every variety of market possible coming round again and again and that therefore there is no need to change a system. EVER. Theoretically. You just wait until its time has come again. A system will go through winning and losing periods throughout infinity again and again. I then turned from theory to practice. I said, never mind that markets never change because they have infinite variety over an infinite period: in the practical time frame of a human life or a human working life they DO change. You will get a system working for a period and then ceasing to work. And that therefore you DO need to change your system if (in practice and within your life time) you want to make money. I do not consider this discussion fruitless. We are a bunch of people talking through the theory and practice of profitting from trend following in the markets.
I believe you will find it on Amazon. It is called "A Practical Guide to ETF Trading Systems". You will find it under my name "Anthony Garner". Beware - this is NOT a book which will help you to make "millions in up and down markets"! It simply and methodically compares buy and hold to simple trend following systems on a variety of portfolios in increasing order of diversification and concludes that the use of a simple system can provide better risk adjusted returns to buy and hold. It goes on to outline a few simple "money management" regimes which should enable you to see a higher CAGR (at the cost of higher vol and DD) without the use of leverage. Simple as it sounds there seem to be a huge number of people out there to whom such a guide may be of value. I am a little embarrassed to mention the book - I am a trader not an author and self promotion makes me very feel awkward. The reason I started this thread was not to promote my wares but to try to dispel some of the misguided nonsense you find in sales pitches on the web.
You promote a man whose firm was ripping off clients only to finally see that firm be barred by the CFTC...and you hold yourself out as a noble protector of newbies? Interesting stance.
Tell you guys what: "Mike Covel and Curtis Faith rules" Oh wait... we're forgetting two more guy... "Mike Covel, Curtis Faith, Russell Sands and AFJ Garner rules" End of story? Seriously... Mike, I bought you and Russell's courses, a long long time ago. It was my first exposure to mechanical trading. I wouldn't be here if it wasn't for that. I appreciate the fact that you guys made the Turtle rules available to the public. After being exposed to your material, I got interested in general systematic trading and followed the old school Omega-List and Chuck's Traders Club. The tradition and the old school guys moved to Curtis' forum. I learned a lot from them. Curtis provided some solid research regarding MPT and Monte Carlo. AFJ Garner's made some good posts in here. So all in all, you've help people out. With more experience behind me and a thought of my own, I don't agree to some of what you guys write/say. But it doesn't mean I don't respect any of you guys. That all mentioned... Wouldn't we all like to discuss about trading trend-following strategies? As much as I'm guilty of side-tracking the thread (apologies)... let's try to stick to the topic.
Those (2) depositions posted in this thread are some of the best educational insights any prospective investor could ever possibly read. They show quite clearly how a con can unfold. End of story? Doubtful. Anyone mixed up in the nonsense outlined in those government documents will most likely continue down a wrong path.
Mike... What's the title of this thread? If you want to... you can start another thread about cons in the OPM industry. If you want to stick to your depositions... then start one about that specifically. Let's try to stick to the topic... It seems like people are more interested in reading about trading trend-following than the government papers (I was suggested to put you on ignore... but I won't). PS. I'm not Curtis Faith or any of the Turtles. Why would I buy from Mike and Russell?
Those documents are but one example of "people" as the real issue, not debates about "changing markets." People make decisions. Some make consistently good decisions, some bad. Think about this: Acceleration Capital will at some point in the future be a data point for some noted Ivy League academic. Faith's firm will be held out as one of the "unlucky" ones who did not make it. Acceleration Capital will be used (along with other misguided miscreants) as a basis to argue that trend following doesn't really work once you control for survivorship bias. As far as "changing markets"... Good systems respond to changing market conditions. If one is constantly tweaking a system to supposedly meet changing market conditions...that is not much of a system. Also, I can't help but chuckle at this busy body like tendency of yours to supposedly put the thread back on track... especially after rants about discretion and Amaranth.
Garner just promotes good books and products as far as I understand. "The Turtle Way" is an outstanding book.