Reality check please...JWH, hedge funds and mutual funds

Discussion in 'Trading' started by lars22, Aug 31, 2006.

  1. lars22


    Couple months ago, I read a book called "How trend followers make millions in up or down markets". It talked about hedge funds and great traders who averaged like great returns, year after year. One of the important people in that book was John W. Henry, and how he's great and had averaged 30% a year for something like the past decade or so, blah blah.
    I thought it was a great book. Today, for some reason, I thought I'd make a search on JWH. His site,, has list of all his programs and performances. To my surprise, I could not find anything even NEAR 30%. Theres something like 10 programs on his site, and most of the perfomances, if you take them for the past 5 years, are around the 3 or 4%! And not only that, a couple of them are in the negative...and this is the average of 5 years. And if you look at the overall results of the programs since their creation(maybe 20 or 30 years ago), 10% seems to be where it's at. And this is all 10 programs, not ONE is in the range of the 30% for the last 5 years, let alone 15%... How it this great? This is a multi billion hedge fund! They have all the money to hire any professional, economist, mathematician, etc...If they can not do it, why are we even trying???
    I mean, why should I risk my money trading by myself, when the best can only do 10%?? And even then, why put it in a hedge fund, when I can put it in a VERY LOW mutual fund at my bank, where they average 10% very easily. Is trading just useless? The best seems to be around 10%, and for that, my banks does it for nearly no risk. Why trade? Whats the point that I'm missing? Someone please enlighten me...
  2. JWH has just gone through a very large drawdown...trendfollowers have had a tough go of it lately.

    Every strategy has good times and should focus more on money management. Good money management can make an average strategy provide fantastic results.
  3. wonder if he will call it quits?

    trend following = buy and hold--sometimes you get lucky, sometimes you don't.

  4. rosy2


    get back to us with data on more than one firm. thanks
  5. lars22


    I sure can. JWH was a main attraction in the book, with his theories and all, that's why I mentionned him. Theres tons of hedge funds who average 10%, but why put it there, where these funds are considerably riskier than mutual funds. I just put money in my bank where they've been averaging 15% for the last 8 years. Whats the point of hedge funds. It's not like they're doing 50% or some very high performance.
    Besides, JWH has 9 programs! Im not talking about 1 program in particular, but about all of them.
  6. lars22


    Don't you think that if money management worked, they wouldn't of done it already? There doing the best they can, with the best strategies, and they can not make fantastic results.
  7. Good post lars. I think a lot of people are going to reach the same conclusion. A lot of funds underperformed the SP in may june july.
  8. lars22


    Here are the result for the LAST year!

    Strategic Allocation Program -16.26
    Currency Strategic Allocation Program -22.20
    Financial and Metals Portfolio -10.30
    Worldwide Bond Program * -15.87
    International Foreign Exchange Program -26.96
    G-7 Currency Portfolio ** -26.47
    Dollar Program * -34.31
    Global Diversified Portfolio -14.48
    JWH GlobalAnalytics® -10.10

    This is really rediculous!

  9. The goal of money managment is to maximize the growth of the account given the amount of risk you are willing to accept.

    I'm telling the guy to find a strategy that does work...and then focus on using money managment to maximize the growth in his account. And that one can do very well with a strategy with only a small edge.
  10. ...only a matter of time before he goes Tapioca !!!
    #10     Aug 31, 2006