Althucher guesses: trend funds to disappear within the next 10 years...

so your point is that since u believe trend following losers outnumber trend following winners, nobody should do it.. you also believe that all gains accumulated from trend following systems are random. akin to winning the lotto.

how did you come to this conclusion. i'd like to know.

among other things, i own a sheep farm, and after a decade of flat growth, i receive an order for 100,000 bales of greasy wool from the chinese. unable to keep up with demand, i buy greasy wool futures and make a fortune.

am i just lucky?

do you honestly believe that people are not capable of effectively identifying and profiting off trends? since when do all participants within a strategy need to return similar high % returns for it to be deemed attractive? should i not try something cos most people will fail at it?

lights

ps. larry conners, i could backtest that any strategy taken out of proper context could lose money.. what's his point.

Quote from marketsurfer:

mav,

trend following methods do not test well for viability. i am sure this is why you are not a trend following trader, but rather an option strategist. there is no edge in trend following. yes, ofcourse, some trend funds will succeed wildly, but many more will quietly die during one of the massive drawdowns that are indicative of this strategy. your continued allusion to the succesful personal finances of the some famous trend following managers is not a good argument for the strategy.
take a look at larry connors--- "how markets really work" wherein he lays out substantial backtesting proof that the traditional trend following method of buying new highs/selling new lows is inferior.
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Quote from marketsurfer:

successful hedge fund manager and author, james althucher, states in his new book--"super cash"---- that the trend following funds will be history within the next 10 years. he cites the dismal performance of the major trend funds over the last several years, over leverage, and investors pulling out.

his new book is fantastic reading into the cutting edge of hedge funds. definitely check it out!


surfer
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How terribly unfortunate, then, that you have named your fund IntrendX. Rather Shakespearean.
 
"- TF funds trade diversified portfolios and make the bulk of their money in a small subset of the portfolio. These gains pay for the chop encountered over the rest of the portfolio. I reckon portfolio management theory is improving. Which leads me nicely onto...

- One point that has surprisingly evaded this discussion so far; trend following methodologies appear to have evolved. Old school TFs, such as Dunn & JWH, seemingly employ different tactics to those who pursue evolution and development. Excuse the European bias (as a result of my ignorance on non European funds) but look at the performance of Winton, Aspect, MAN/AHL, Transtrend. Furthermore, examine the lack of volatility of returns these funds produce relative to the old school. Modern money managers like funds of any strategy with low volatility of returns. The new school have engineered their products to suit this. They are the future of trend following. The success of the one man band, outside of institutional finance, is likely to become an even rarer find."

In my view this is the essence of the story here. The funds mentioned above .(incidentally Winton and Aspect are the A and H of AHL) indeed make lots of money from allocations decisions rather than simply trend following, at present stock markets across the globe, interest rate futures and bond utures, as well as metals are trending like crazy, and each of these funds, although AHL in paticular are doing phenomenally. The products like AHL offers are structured offering cast iron guarantees of principal protection, with never yet negative annual returns on vol of 15-20%. No way these hedge funds are going away, in my view the good will get larger and stronger, the poorer will be swallowed. Just look at the $2bn AHL fund just launched. With the ridiculous sums sitting in pension funds starting to allocate to hedge funds, on far stricter criteria, trend followers will continue to flourish when mkts trend, and have expected drawdowns when they don't.

Sophisticated investors realise this, and will flock to the good trend followers.
 
Quote from Thunderdog:

How terribly unfortunate, then, that you have named your fund IntrendX. Rather Shakespearean.
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:D :D

yes, the aim is to be IN a nice up TREND ing equity curve--- via a combination of X strategies/products/markets.

bottoms up socrates,

surfer:D
 
Quote from Lights:

so your point is that since u believe trend following losers outnumber trend following winners, nobody should do it.. you also believe that all gains accumulated from trend following systems are random. akin to winning the lotto.

how did you come to this conclusion. i'd like to know.

among other things, i own a sheep farm, and after a decade of flat growth, i receive an order for 100,000 bales of greasy wool from the chinese. unable to keep up with demand, i buy greasy wool futures and make a fortune.

am i just lucky?

do you honestly believe that people are not capable of effectively identifying and profiting off trends? since when do all participants within a strategy need to return similar high % returns for it to be deemed attractive? should i not try something cos most people will fail at it?

lights

ps. larry conners, i could backtest that any strategy taken out of proper context could lose money.. what's his point.
More...


yes, lights, with inside information ( your sheep farm example)--ofcourse. what i do believe is that 2 or more periods of up or down movement does not have any bearing whatsoever on what the next period will do--up or down in most cases----- this is how "trend" is defined-----periods of continued movement in the same direction--- i have never seen any test that indicates that 2 or more periods in the same direction dictate the next period to be in the same direction at any greater chance than 50/50. so, what can i say??

surfer
 
???

is fundamental research suddenly disallowed in trend following? since when is trend following soley based on techinical analysis and price. that is like coming to a gunfight with a knife. also, randomly buying something up 2 or more periods is NOT trend following. it's called chasing perceived momentum.

greasy wool was identified as a new trend and confirmed by price. to me, that's an example of trend following.

on a simliar note, psychlogist thomas gilovich attempts to show that that the hot hand in basketball does not exist based on his analysis of performance statistics. he could not find streaks of succesful shots beyond those detrmined by chance alone.

this is what i refer to as "whore statistics". because i know the hot hand does exist. just watch an old chicago bulls game. one can't come to a conclusion on data which reflects the entire spectrum of talent. it just ends up being a puddle of mud.

but hey what can i say... statistics hardly ever explains sh*t regarding the markets. believe it or not, markets aren't dictated or rather controlled by price itself. support levels and bottoms are created by the collective subconscious of the entire investing/trading community when it's deemed that the trend has changed. as are new uptrends. who can recognize this? the autistic savant?

X Factor



Quote from marketsurfer:

yes, lights, with inside information ( your sheep farm example)--ofcourse. what i do believe is that 2 or more periods of up or down movement does not have any bearing whatsoever on what the next period will do--up or down in most cases----- this is how "trend" is defined-----periods of continued movement in the same direction--- i have never seen any test that indicates that 2 or more periods in the same direction dictate the next period to be in the same direction at any greater chance than 50/50. so, what can i say??

surfer
More...
 
Quote from Lights:

???

is fundamental research suddenly disallowed in trend following? since when is trend following soley based on techinical analysis and price. that is like coming to a gunfight with a knife. also, randomly buying something up 2 or more periods is NOT trend following. it's called chasing perceived momentum.

greasy wool was identified as a new trend and confirmed by price. to me, that's an example of trend following.

on a simliar note, psychlogist thomas gilovich attempts to show that that the hot hand in basketball does not exist based on his analysis of performance statistics. he could not find streaks of succesful shots beyond those detrmined by chance alone.

this is what i refer to as "whore statistics". because i know the hot hand does exist. just watch an old chicago bulls game. one can't come to a conclusion on data which reflects the entire spectrum of talent. it just ends up being a puddle of mud.

but hey what can i say... statistics hardly ever explains sh*t regarding the markets. believe it or not, markets aren't dictated or rather controlled by price itself. support levels and bottoms are created by the collective subconscious of the entire investing/trading community when it's deemed that the trend has changed. as are new uptrends. who can recognize this? the autistic savant?

X Factor
More...



i like your original thinking. i'll look at gilovich's work---i am not familiar with it. thanks for the ideas.

surfer :) :)
 
Quote from marketsurfer:

:D :D

yes, the aim is to be IN a nice up TREND ing equity curve--- via a combination of X strategies/products/markets.

bottoms up socrates,

surfer:D
More...
Astonishing! All that meaning packed into a single stroke of neologism.
:D
 
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