You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
The Implications Of Schindler and VN
- Thread starter Pa(b)st Prime
- Start date
Quote from Maverick74:
His fund is not down 90%. I have his numbers in front of me. You want me to call your bluff? Are you ready to put some money on the line? I know exactly what happened and the story you are posting is 100% inacurrate.
Why not share his Jan performance and what happened? Or is this all a big secret...
Quote from Pa(b)st Prime:
The breakdown of these two fund managers has broad ranging implications. If two men of indisputable intelligence, training, education and trading experience can both come to the conclusion that mechanical systems don't work, then what to make of the backtesting crowd? Would Vic and Aaron be alive if they'd hung out with Woody? Or Jack? Subscribed to TS?
We're talking about two guys savvy enough that they have backtested everything under the sun. Yet they made a decision that selling premium was virtually the only way to cheat a negative expectancy.
All of which begs the question, are systematic results fallacious? Does any traditional indicator "system" generate profits over an infinite span? Is it even possible for such a system to exist given the constant transition between trend and chop?
Basic economic theory suggests that any easily replicable profitable system will find its risk-adjusted returns competed away to the t-bill rate. Given real world assumptions, this may take a few years or even a decade+, but it will happen eventually. If you are one of the first trend-followers or mutual fund timers, you can do really well. But after a while the competition will heat up, the edges will diminish, and the activity will no longer display great profitability.
So IMO in the long-run, all fully mechanical systems will degrade. However, good systems traders will know this and will be constantly researching for new edges, and refining their old systems, throwing them out if they become obsolete. So whilst a single system is unlikely to provide superior returns over the very long run, systematic trading is still viable as an approach.
The other implication is that discretionary trading is superior in this one respect - it is virtually impossible to copy. A Soros can try to explain how he trades, a Buffett can explain his investing philosophy, but even if people understand it, they still can't replicate it. Therefore if you can genuinely get an edge through discretionary trading/investing, it is much more likely to be permanent.
For an edge to be long-lasting, there generally has to be some reason to prevent almost unlimited competition coming in and eating up all the returns. If your strategy does not have some kind of structural barrier to competition, then it will probably be competed away in time. That barrier could be extreme skill, superior research, human nature, barriers to entry, lack of competition and so on. But it has to be there, if you expect your profits to last.
Quote from BJL:
Why not share his Jan performance and what happened? Or is this all a big secret...
Indeed, very logical question. Why make things complicated?
And if the accusations are not correct sue them. As europeans we always thought that sueing people to make quick money was one of the first this americans do.
In this case it wouldn't be that stupid at all, because the accustations can indeed damage the business of Schindler.
Quote from Cutten:
Basic economic theory suggests that any easily replicable profitable system will find its risk-adjusted returns competed away to the t-bill rate. Given real world assumptions, this may take a few years or even a decade+, but it will happen eventually.
Sure, explain this to the owners of Google.