Trend Following Is Dead
- Thread starter marketsurfer
- Start date
Surf, this makes absolutely no sense to me. The currencies markets have arguably had the best trends in years this year with the breakdown in the Yen complex. How are these guys not killing it? This is the biggest move in the dollar/yen in what, two decades? I'm starting to think a lot of these guys that "market" themselves as trend following are really not. I would love to hear Covel's thoughts on this.
The most interesting thing is who is saying this--- it's a major player in the trend arena.
surf
I've followed Taylor for years but to be honest with you Surf, I don't think he is a trend follower by the classical definition. Let me explain. Taylor is a hardcore believer in the Austrian school of economics. He tends to make "macro" predictions and then use the principles of trend following to ride his macro bets. How do I know this? Because this guy was calling for the Euro to go to parity a year or so ago when it was breaking out to the upside. Now don't get me wrong, philosophically I love these Austrian guys, but not as a trend follower. He was on the wrong side of that trade and probably still is. That is why he took a shot at old Ben for screwing up these trades. Seriously, his comments on trend following are meaningless to me as he probably fades trends more then goes with them.
Taylor was one of the earliest large-scale trendies, and he has lots of video clips (search utube or whatever) talking about his trend program.
In fact, a close friend of mine just talked to him, he spoke of his trend programs.
surf
Surf, I'm aware of his trend programs. I've been following the guy for 10 years. What I'm saying is, he is NOT your typical trend follower in that he initiates trades whenever they signal. He is more like Soros. Soros is a fundamental trend follower in that he forms a macro idea and then lets the trade run. That is what Taylor does. A typical trend follower cares nothing about fundamentals. If soybeans are breaking out and he thinks they are going lower, he will buy them in the direction of the breakout even if it's counter to what he thinks. This is why Taylor is getting chopped up right now. It's also why he was on the wrong side of the Yen move which has been the nicest trend in years. So to say trend following is dead because a fundamental guy is struggling is not really genuine.
More color
http://mobile.bloomberg.com/news/20...most-since-08-as-trends-shift-currencies.html
... Assets of the FX Concepts Global Currency Fund, run by John
Taylorâs FX Concepts LLC in New York, shrank to $624 million in June,
from $3.7 billion in 2008, when it returned 11 percent. This yearâs
losses followed a less than 1 percent gain in 2012 and a decline of 19
percent in 2011
http://mobile.bloomberg.com/news/20...most-since-08-as-trends-shift-currencies.html
... Assets of the FX Concepts Global Currency Fund, run by John
Taylorâs FX Concepts LLC in New York, shrank to $624 million in June,
from $3.7 billion in 2008, when it returned 11 percent. This yearâs
losses followed a less than 1 percent gain in 2012 and a decline of 19
percent in 2011
Surf, a better proxy for trend following would probably be the notorious Superfund which is up 13.5% YTD net of outrageously high fees. Care to explain that?
Dunn still seems to be able to make it work
http://www.iasg.com/managed-futures/performance?sb=ytdreturn&aummin=10000000
http://www.iasg.com/managed-futures/performance?sb=ytdreturn&aummin=10000000