Quote from lars22:
Couple months ago, I read a book called "How trend followers make millions in up or down markets". It talked about hedge funds and great traders who averaged like great returns, year after year. One of the important people in that book was John W. Henry, and how he's great and had averaged 30% a year for something like the past decade or so, blah blah.
I thought it was a great book. Today, for some reason, I thought I'd make a search on JWH. His site, jwh.com, has list of all his programs and performances. To my surprise, I could not find anything even NEAR 30%. Theres something like 10 programs on his site, and most of the perfomances, if you take them for the past 5 years, are around the 3 or 4%! And not only that, a couple of them are in the negative...and this is the average of 5 years. And if you look at the overall results of the programs since their creation(maybe 20 or 30 years ago), 10% seems to be where it's at. And this is all 10 programs, not ONE is in the range of the 30% for the last 5 years, let alone 15%... How it this great? This is a multi billion hedge fund! They have all the money to hire any professional, economist, mathematician, etc...If they can not do it, why are we even trying???
I mean, why should I risk my money trading by myself, when the best can only do 10%?? And even then, why put it in a hedge fund, when I can put it in a VERY LOW mutual fund at my bank, where they average 10% very easily. Is trading just useless? The best seems to be around 10%, and for that, my banks does it for nearly no risk. Why trade? Whats the point that I'm missing? Someone please enlighten me...
