The trend-following strategies of Henry, et. al. that have created quite a number of billionaires is predicated upon a very simple but often overlooked fact, the existence of significant trends. Trend following as a strategy is a very 'market dependent' as opposed to 'practicioner dependent' strategy (ie. you can't get blood from a stone). The existence of trends in global markets is often a function of economic or political instability and dislocation such as inflation, recession, major war, Fed missteps, etc. The fact is, the global markets have been extremely serene over the past 10 years with little major tradeable trends worthy of significant profit. A movement of a currency from 1.20 to 1.30 is not a trend worthy of note for the likes of Henry, etc. For the time being, gone are the days of $/Yen from 300 down to 100 or overnight interest rates from 9% to 3% or the Dow from 2000 to 10000. These are the type of major trends that feed 30%+ annual returns and create billionaires. Oil/metals have historically been a minor market for these guys due to limited liquidity. It's really been the currencies/financials/equities. Some may argue that there is always a trend somewhere. Well, markets are very inter-related and guys moving as much money as Henry, etc. have a small handful of markets to chose from (they are all correlated by the way). Markets can go decades of trading sideways and trend-followers get chopped up and lose money during these periods. It is no coincidence that Soros largely bowed out of trading in the early 2000s as he saw trends becoming muted. This was his trade and it was yet again another winner for him. Don't think for a minute that he just coincidentally got tired of trading at the right moment. My guess is you will see Steinheardt, Soros, etc. re-emerge in their 80s and 90s if significant trends develop in the world. As someone said before, Henry and Dunn, etc. didn't see the writing on the wall, this is the time for trend-followers to be on an extended vacation certainly not however to abandon the strategy of trend following or human nature...
A VERY excellent post! And while Henry made his fortune trading Grains in a medium sized fund, because of exchange mandated position limits it's very difficult for a billion dollar fund to meet it's bogie carrying a mere 600 Corn contracts.....
You "highly recommended" the book, it contains "many nuggets of information" and you enjoyed it more than the Market Wizard books. And, perhaps most importantly, the book earned a spot in your 10 all-time favorite trading books. Interesting. So is it a "professional courtesy" to set your integrity aside? I know, I know. You recommended the book as a book, and not as a tent or an automobile. Clearly, when you have something to say, people should take you at your word. Against this background, where does your professional courtesy stand on your friend, Larry Williams?
yes. but it will not teach you how to trade. as a librarian, you should know that MOST of the "praise" on a book's back dust cover is provided by people who normally have not even read the book, or sometimes even its synopsis. i am truly surprised that a learned person such as yourself does not know these simple facts about the publishing industry. Furthermore, one evolves and learns, sometimes re-evaluating long held beliefs. i realize this is difficult for you to imagine. surf
And as a moron, you have distinguished yourself as being without peer. Although some other members come dangerously close, you remain squarely in the lead. http://www.elitetrader.com/vb/showthread.php?s=&threadid=71154
how does the trendiness of the equity indices (e.g., nasdaq) from 1996-2000 and then from 2000-2003 compare to historical periods?
you are really lacking a response.... funny, that thread, which you retracted--by the way, was placed in the "religion" forum. LOL ! and once again, thank you for the PR ! surf
You point is well taken. However, I don't think that "trends" are absolute. As I think you may have you implied (or at least that is what I inferred), trends are a matter of scale. Indeed, large boats are not able to maneuver as nimbly as smaller boats in tight areas. But how many of us here are at the helm of billion-dollar boats? I realize that my post probably does not belong in this thread. I just raise the point because certain members (marketsurfer et al) point to the recent performance of large trend following funds and confidently conclude that trend-following is "dead." The giants may be sleeping for the time being, but there is still a fair amount of lilliputian trend-following activity going on among the more modest mortals.
Yes, I did ask that the moron thread, which I started, be deleted. However, if I may quote you: Accordingly, having conducted my due diligence, the moron thread remains. And you are quite welcome about the PR. As for the thread having been moved into the Religion forum, I can only surmise that it is because your devotees must take you on faith, in the absence of any tangible rationale.