I don't trust this guy -- he writes a book called "how to trade like a hedge fund", then "how to trade like warren buffett" -- now this? Anyone else get the idea that this guy is just an opportunistic bard? I know he runs a fund, but he made most of his coin on some tech startup right? Sounds like he's more of a marketer than a financial mind, in my opinion.
Althucher guesses: trend funds to disappear within the next 10 years...
- Thread starter marketsurfer
- Start date
Surf, I'm very well aware what trend following is. Long only mutual funds is a subset of trend following. It has to be by definition. You are long stocks that are making higher highs and higher lows that are in up trends. Sure there are funds out there that buy beaten up stocks. But most funds buy stocks that have upward momentum and that are in both positive earnings trends and price trends.
I still don't understand how trends are suppose to disappear. Especially among commodities. Are you saying that Gold, oil, sugar, copper, soybeans, bonds, corn, and the euro are never going to make a substantial move ever again? I don't understand.
I think no trend is a trend and the trend is your friend. 
Altucher is correct about money flowing out of trend following strategies in the CTA/CPO world. I do think there willl be funds close and new entrants into the field will be curtailed.
There is a lot to learn from these trend followers but the fund of funds that allocate money absolutely hate the strategy.
There is a lot to learn from these trend followers but the fund of funds that allocate money absolutely hate the strategy.
maverick,
Althucher is saying it, not me. however, i do see the marked decrease in the over all success of trend funds to continue.
surfer
soros comes to mind, minus cramer--ofcourse !
how about jim rogers??
surfer
Surf,
I think hedge funds as a whole are getting killed right now. In fact, when I go through all the databases of hedge funds and managed futures funds, the trend followers are actually doing pretty well. Most of the arbitrage funds are struggling as are the short only funds. If I had to name the two best performing groups right now, I would say the trend followers and the long/short equity guys. I really don't understand the argument Althucher is making. Perhaps you can highlight his argument here for us.
I think there is going to be a big washout in the hedge fund industry as a whole. Very few funds right now are outperforming the indices right now. And most ETF's and mutual funds have better tax considerations then hedge funds. In fact, I would argue that only 3% to 5% of all hedge funds and CTA's are beating the major index funds when you factor in the short term tax liabilities of hedge funds. This means more and more people will be taking their money out of domestic funds and either putting their money in offshore funds or back into mutual funds and ETF's. The next 5 years are going to be brutal for managed money. Only the best will survive.
mav,
i'll step aside to allow J. A. to comment if he wishes.
best,
surfer
i'll step aside to allow J. A. to comment if he wishes.
best,
surfer