SAC"s DEMARK finally speaks!

MandelbrotSet · Jul 26, 2008

Here's a little lite Saturday morning reading:

Mean Reversion Gets Ass Whipped

Good trading

P.S. In case you miss it, this is the link that I am referring to:

Wha Happened Quants?#!#!?

MandelbrotSet · Jul 26, 2008

... and here's the flip side of the coin.

The Perils of Momentum Strategies

rodmike9 · Jul 26, 2008

Quote from MandelbrotSet:

Here's a little lite Saturday morning reading:

P.S. In case you miss it, this is the link that I am referring to:

Wha Happened Quants?#!#!?
More...

Thx for the link

highlifejoker · Aug 1, 2008

<b>Penn: How applicable are your techniques for the retail trader? The average man or woman trading end-of-day, for example.

DeMark: It's tough for the small guy. The small investor. It's got to be impossible. With technology the way it is nowadays you've got all the arbitrage, derivatives. It's tough. I mean it's a full-time job. People that just do it as a hobby - I don't know how they can be successful.

Penn: Given what you've just said, what's a little guy to do? What's a TradingMarkets' reader/subscriber to do, given some of those odds that may be stacked against them?

DeMark: My experience was that probably 99% of the people want to be told, 1% feel that they have the answer and 99% of them are wrong. </b>

http://www.tradingmarkets.com/.site...Discipline-Market-Timing-with-Tom-D-77819.cfm

highlifejoker · Aug 3, 2008

demark says some seriously disturbing facts about the market in the second part of this classic interview. Frankly, I am surprised it was published.

H:L:J

bontrjd · Oct 31, 2008

Quote from MandelbrotSet:

Here's a little lite Saturday morning reading:

Mean Reversion Gets Ass Whipped

Good trading

P.S. In case you miss it, this is the link that I am referring to:

Wha Happened Quants?#!#!?
More...

Thank you very much for posting these.

marketsurfer · Oct 31, 2008

demark pulls no punches.

surf

EPrado · Oct 31, 2008

Quote from marketsurfer:

Demark rips on trend following, enjoy!

http://www.tradingmarkets.com/.site...rview-intro-Dedication-and-Discipli-77647.cfm

It should come as no surprise to find that a man like Tom DeMark, author, market analyst and trading consultant to some of the most famous names in trading might be more than a little busy when it comes to finding time to do a telephone interview. We caught up with Tom DeMark late in the day, and though the markets were closed, is seemed almost as if Tom DeMark's day had just begun. Indeed, we were interuped more than a few times by urgent calls from colleagues and clients - including one famous client in particular who was traveling in Russia at the time and needed to share a few things with Mr. DeMark that could not wait.

Tom DeMark has been in the trading business for more than 30 years and is known to many as a technically-oriented analyst and trader. This is due no doubt to his popular books on his trademark technical tools and set-ups, books like The New Science of Technical Analysis and New Market Timing Techniques. However in conversation with Tom DeMark, he prefers to consider himself a "hybrid" market timer rather than a technical analyst and insists that, in the end, it is the fundamentals that drive everything.

In this, Part 1 of our Big Saturday Interview with Tom DeMark, we discussed what makes some of the legendary traders with whom he's worked - traders ranging from George Soros and Michael Steinhardt to Paul Tudor Jones and Steve Cohen - so great, and how the average trader can learn to develop those skills and habits. We also started a conversation about some of DeMark's trading techniques - a conversation that continues in Part 2 - from his unique approach to technical tools to his conviction that bottoms are formed not by "smart buyers" but by the "final dumb seller."

With that, we hope you enjoy "Dedication and Discipline: Market Timing with Tom DeMark"

David Penn: Let me just start off at the top by talking about some of the people you've worked with. You've worked with a lot of names - Steve Cohen, John Burbank, Soros funds, Tudor Jones, Steinhardt and so on. Having worked with that caliber of trader - is there anything that you see in those traders that either reminds you or sort of says 'this is why these are the people at the top'?

DeMark: They're dedicated. They're 100% involved and committed- they've all got the same disposition. They're all calculators. They're good money managers. I'd say if one had to break down the reasons for their trading success--it's probably a 20 to 25 % trading methodology and techniques or systems, whatever they might apply - 25% discipline and 50% money management.

Penn: Really.

DeMark: They're all good money managers. They all are. I can't say they're all good traders. They're not. They can manage money well. Some of them can take pretty big - a large series of hits and at the same time make money and they cut their losses short.

Penn: Interesting.

DeMark: It really is money management. Surprising. I have worked with the best. Steve (Cohen) is definitely the best trader. He doesn't have that high a success rate. It's his disposition, he was built for trading. You can't describe it. The ability is something innate Similarly, John Burbank is the best long term investor I have seen in my career and he is a global investor. Just as Steve is the best trader John is the best investor.

They're all the same, they're all steely. They've got a real determination to win. It's in their personality.

Penn: Right.

DeMark: They do it the right way, too. A lot of people accuse them of running ahead and having inside information. That isn't true. None of these guys are that way. None of them that I work with. No they've all done it the calculated way. They've all grown with the markets, which is what makes them successful. These guys have all adapted.

Penn: Yes.

DeMark: And they've all got something that's unique to each one of them that they specialize in different areas. If they were athletes they'd be the best, if they were in a spelling bee competition they'd be the best. There's a common denominator. They don't have a lot of sympathies - as far as the market's concerned. They're cutthroat. Not in a negative sense. And it's something they're born with. I've seen good systems developers, a lot of them, a number of them, and I've seen them lose money because they don't have the money management skills or the discipline so they can have a system that's 90% and they lose money. It's just how you manage the money that's critical.

Penn: That leads to a couple of interesting questions. If success in some respect is 50% of the money management, how much of the money management is having a sound approach to money management and having the psychology to stick with it?

DeMark: Well that's it. Fifty percent is money management and having something that's time-tested. Something that they can live with too. The psychology you're talking about, that discipline factor, is 25%. The other 25% is whatever technique you use. Some are systematic, some aren't. They're all fundamentalist by heart. Some say they're not, some say they're technical. But they've all got a fundamental build.

Penn: Really? That's interesting.

DeMark: Yeah. They're all well-educated, too. They really are. I mean, they're all poker players. Steve was a poker player in college; he was one of the best. They're all that way. Paul is, too. I didn't spend that much time with Soros, I was executive vice president at Tudor and I've been with Steve now for 12 or 13 years and I've been very close to John Burbank the #1 fund manager last year in the country according to "Absolute Return Magazine". He grew from $800,000 under management in the year 2000, and is currently just over $6 billion and growing fast. John's company Passport Capital is the biggest success story I am aware of since 2000. Steve has been unmatched when considering the past 20 years perfomance. He's had two down months in 200 months? More than that. Eighteen years he's had two down months. I mean nobody can come close to him. And those months have been less than a percent. (Ed Note: both Steve and John are now investors in Market Studies Tom's company as of last month.

Penn: Really?

DeMark: You don't hear many stories about them because they have been inaccessible but I do speak to them throughout the trading day and their insight is certainly outside the box and they have a knack for anticipating market moves. When they travel they bring all their trading needs with them, particularly Steve . He flies a couple of planes and they set up a trading operation for him when he travels.

Penn: Wow.

DeMark: This is the man. He was the man. But John Burbank is the global man. He's got a fix on everything globally. This guy is gonna be really well-known. He's the next Soros.

Penn: Let's change gears a little bit. What's most important when it comes to understanding the market?

DeMark: There are times to buy and times not to buy and times to sell. And the market timing tools I developed are applied to the strategies of my clients and we use the strategies to give us the opportunities.

Everything that I use I developed myself. I haven't relied on anything in the public domain. I've been in the business 36 years from law school and grad school - I got my MBA and then went to work for a fund that had about 250 million and we grew to almost 6 billion. And even though everybody in the fund - the principals were all CPAs, MBAs, and lawyers -represented ourselves as being fundamentalists, we did use market timing and we avoided the 1973-74 crash and we grew.

We were institutional investors while there were guys who were very good on the retail side-people like Larry Williams, you know Larry obviously, right? He has had an influence on many in this industry but his audience has been the retail side of the market.

Penn: Yes, yes.

DeMark: He's been a friend for 36 years. He's in the retail end of the business; I've been in the institutional side. I've dipped my toes a couple of times in the retail side and I've written some books and I've given some seminars but I really don't have a presence on the retail side, I don't sell anything.

The techniques I use are all original. They're mine. They've been time-tested and they're more adapted for institutional traders. I mean retail traders can use them, but the indicators I've developed are anticipatory, they're trend-exhaustion techniques. So we try to identify when a trend is about to exhaust or a trend is about to reverse. With the large fund that I've been aligned with we've had to anticipate tops and bottoms, whereas the retail traders usually trade small accounts, or they could be a CTA but still relatively small if you're under a hundred million. Large investors really couldn't trade the trend.

http://www.tradingmarkets.com/.site...rview-intro-Dedication-and-Discipli-77647.cfm
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Well....you....and Demark must feel rather stupid.

Trend Followers are kicking ass this year. October was HUGE for them. JWH's funds were up 70% YTD as of a few days ago. Might have given some back with the equity rally...but still......they are leading the charge this year.

Not sure who is a bigger fade...you or Demark.

SFLTrader · Feb 7, 2009

Quote from EPrado:

Well....you....and Demark must feel rather stupid.

Trend Followers are kicking ass this year. October was HUGE for them. JWH's funds were up 70% YTD as of a few days ago. Might have given some back with the equity rally...but still......they are leading the charge this year.

Not sure who is a bigger fade...you or Demark.
More...

DeMark has been doing it for decades. And JWH is probably one of the very FEW institutional traders he HASN'T consulted.

So I don't think he stays up nights worrying what is said about him on retail trading forums.

athlonmank8 · Feb 7, 2009

What a dumb post. I wish Marketsurfer was a bit more productive in life.

As for DeMark...who is he kidding? Sure fade the trends that's fine, but his procedure of doing something different of everyone else is a bit contradictory. How do you gauge a top? How do you predict exhaustion in the market? There's no math or equation for that kind of psychology. If he wants to use indicators that's fine, but if he wants to talk about slippage and "forgiveness" on a trade I want to see how is stops are set and HIS money management.