Prognostication vs Execution

illiquid · Jun 7, 2005

A paraphrase from one of the market wizard interviews was that in the past, successful trading was 75% analysis and 25% execution; nowadays, timing has become 75% and prognostication 25%. There's also the truism (that applies more to longer term/macro trading rather than scalping) that these two elements are conflicting skills that are difficult to implement simultaneously; in other words, you can get the timing right, or the direction right, but rarely both at the same time.

Is it standard for large funds like Kovner's to just deal only with the prognostication side, while handing off the acutal execution to their traders who maintain "no opinion", or more accurately, no *committment*? How large do funds usually have to get before a division of labor is implemented?

murray t turtle · Jun 9, 2005

Quote from illiquid:

A paraphrase from one of the market wizard interviews was that in the past, successful trading was 75% analysis and 25% execution; nowadays, timing has become 75% and prognostication 25%. There's also the truism (that applies more to longer term/macro trading rather than scalping) that these two elements are conflicting skills that are difficult to implement simultaneously; in other words, you can get the timing right, or the direction right, but rarely both at the same time.

Is it standard for large funds like Kovner's to just deal only with the prognostication side, while handing off the acutal execution to their traders who maintain "no opinion", or more accurately, no *committment*? How large do funds usually have to get before a division of labor is implemented?

^^^^^^^
Illiquid;
Still think older 75% 25% approximately or even 80% 20%still applies ,
perhaps more helpful for a swing -position trader;
yes on shorter time frame execution =more critical.

Checked Lois Peltz book;
''most people dont know I am not the principle trader.''-
Bruce Kovner /Caxton Corp.

illiquid · Jul 28, 2005

Quote from murray t turtle:

^^^^^^^
Illiquid;
Still think older 75% 25% approximately or even 80% 20%still applies ,
perhaps more helpful for a swing -position trader;
yes on shorter time frame execution =more critical.

Checked Lois Peltz book;
''most people dont know I am not the principle trader.''-
Bruce Kovner /Caxton Corp.

Missed this reply -- on further thought I'm leaning towards the attitude that the line between prognostication and timing keeps getting blurrier, with technicals being just another 'fundamental' to watch for.

I suppose with a fund of Caxton's size, precise timing isn't as crucial as judging liquidity, especially if your entrances and exits are visible on the charts in some markets.

Is that Peltz book worth reading or just rehashed Schwager?

murray t turtle · Aug 10, 2005

Quote from illiquid:

Missed this reply -- on further thought I'm leaning towards the attitude that the line between prognostication and timing keeps getting blurrier, with technicals being just another 'fundamental' to watch for.

I suppose with a fund of Caxton's size, precise timing isn't as crucial as judging liquidity, especially if your entrances and exits are visible on the charts in some markets.

Is that Peltz book worth reading or just rehashed Schwager?

===============
Not in any big hurry either ,Illiquid;
interesting Bruce isnt principal trader any more , for me entry/exit is about as interesting as researh.

Yes its a very good one;
not quite as good as Schwager, & shows just how
difficult 10 years plus of far above average % is.