Top Traders Unplugged31 Okt 2021

SI164: Compounding - The 8th Wonder of the World ft. Richard Brennan

This week, Richard Brennan joins us on the show to discuss how people can benefit from the effects of compounding while others end up a paying a price for it. We also cover some thoughts on ‘path dependency,' why those invested in stocks should diversify using Trend Following strategies, why stable returns can only be correctly judged over long time periods, how to analyse fund performance without being influenced by the effects of compounding, some thoughts on what is known as ‘geometric returns’, and we explain the term ‘ergodicity’.

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

In this episode, we discuss:

How to stay on the right side of the effects of compounding
How many strategies can be limited by the make-up of their previous versions
The profitable & negative correlation of Trend Following to equities when stocks are falling
The need to zoom-out when judging performance
The terms 'ergodicity' and 'path dependency'

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Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.

IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.

And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.

Learn more about the Trend Barometer here.

Send your questions to info@toptradersunplugged.com

And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.

Follow Rich on Twitter.

Episode TimeStamps:

00:00 – Intro

01:37 – A Thank you to Shane, our website developer, for his great work in creating the new Top Traders Unplugged website. We hope you all enjoy the new user interface

02:09 – A huge thank you to listeners of the show, such as Dave W, for leaving your 5-star reviews on iTunes, and feel free to share this link with 3 of your like-minded friends:

https://top-traders-unplugged.captivate.fm/listen

03:02 – Macro recap from Niels

04:34 – Weekly review of performance

12:04 – Making money to make money, and some insights on the compounding returns

40:50 – How to judge different strategies accurately

44:04 – Explaining the term ‘ergodicity’

52:17 – The diversifying features of Trend Following and their negative correlation to stocks during market downturns

01:01:24 – Benchmark performance update

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PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:

1. eBooks that cover key topics that you need to know about

In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here

2. Daily Trend Barometer and Market Score

One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here

3. Other Resources that can help you

And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here

Disclaimer

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