SI290: Honey, I Shrunk the Trend Following ft. Andrew Beer

Our guest today is a successful trader, businessman, and author. He is known for his books Following The Trend and Stocks on the Move, and after an impressive career at Reuters finance he moved on to ACIES Asset Management in Switzerland.In our conversation, we discuss trend following and the need to keep it simple, the mistakes that retail traders make, and how to start a new firm in this day and age.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:The many skill sets that Andreas hasHow he wrote the books that he is known forWhy he has a large degree of flexibility with his firm and the capital they manageHow he grew up in a small town in Sweden…with lots of cows!About the computer company that he startedHow he left the corporate worldHow he started at ACIESWhat Andreas does when he is not workingThe books he has written about systematic trading strategiesThe value of simplicityWhat Andreas thinks about trend followingThe issues with doing trend following on stocksHow he got the freedom to write a bookWhat retail traders will get from his booksWhy managing your own money is a bad tradeWhat he thinks about technical analysis and how to define itWhat it takes to start a firm or trading business-----Resources & Links Mentioned in this Episode:Listen to our episode with Jerry Parker recapping 2014.A Definition of ATR (Average True Range).Buy Andreas’ books.Check out his website FollowingTheTrend.com.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.comAnd please share this episode with a like-minded friend and...

18 Jan 20161h 8min

In the second part of our conversation with Robert Carver, we dive into the specifics of his trading strategy, why he doesn’t trade full time, and what he thinks about the trend-following space in general.You’ll hear his thoughts on drawdowns, research teams, risk, and more. You won’t want to miss his insight and clear explanations of some of finance’s most complicated topics.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:The two components of risk, and all about unpredictable riskWhat sets one manager apart from the otherHis view on stop-lossesHow target volatility works for a lot of CTA managersHow he would put together a research team for a fund managerThe problem with hiring a lot of people with the same backgroundHow investors should read the track records of firmsThe concerns and misconceptions about systematized and trend-following strategiesWhy he is so keen on looking at sharp ratioThe issues with skew but why he keeps an eye on itWhat his own trading system looks like todayThe style of trader that he ended up becomingHow to find out what to expect when a drawdown happensWhat investors should ask but they never doHow he got over the failures that he has had in business-----Resources & Links Mentioned in this Episode:Learn more about AHLLearn about Sharpe RatioCheck out The Predictors bookLearn more about Eugene FarmaFollow 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.comAnd please share this episode with a like-minded friend and leave an honest Rating & Review on <a...

9 Dec 20151h 13min

Robert Carver spends most of his book telling you that he is not a good trader. So why did he devote his life and a whole book to the subject?Because he believes in systematic trading; making a simple trading system and sticking to it.In this episode, we dive into his new book and explore why simplicity is the key, people think they are better traders than they are, and so much more.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:Why Robert decided to write his new book, Systematic TradingRobert reads the preface to his new bookHe explains one of the biggest investing mistakes of his careerThe book that got him interested in the financial industryHow he got a job with AHLWhy he wrote a book with very little math involved so that he spoke to a large audienceThe 3 types of investors that he defines in the bookHow cognitive biases in humans make them bad tradersWhy he spends a lot of his book explaining how bad he is at tradingWhether trend following and other divergent strategies work or notWhy sticking to a plan is so importantHow the markets and CTAs will change once the interest rate changesThe differences between a subjective and an objective systemThings that people should avoid when creating a trading systemWhy few people have a good handle on overtradingMachine learning approaches vs. idea approaches to creating trading programsHow systematic trading adapts-----Resources & Links Mentioned in this Episode:Learn more about AHLLearn about Sharpe RatioLiar’s Poker by Michael LewisThinking, Fast and Slow by Daniel KahnemanFollow 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 <a href="mailto:info@toptradersunplugged.com%22%20%5Ct%20%22_blank"...

2 Dec 20151h 16min

In this episode, we dive into the models and processes that Cambridge Capital and Andrew Baxter use to manage risk, research new ideas, and grow their business. We also talk about the importance for managers to explain why they do what they do, rather than just what they do.Listen in to learn more about the future of the managed futures industry and how to be successful in it.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:How his forecast method worksHow he develops his basic modelsHow they come up with new ideas for models at Cambridge CapitalThe various short term and long term models that they employ and how they use themWhen they make interventions to the systemThe risk management they use and why they have a risk budgetWhy they are continuously adjusting their risk in the marketThe drawdowns that they expect to see in their program and the ones that they have been throughWhy he thinks CTA firms had significantly higher drawdowns in 2013 then they had ever had beforeHow their research cycles workHow to compare a life track record with a simulation of the current programWhy we should look at why managers do things more than what they doWhy raising assets is the biggest challenge his firm faces todayWhat it takes to become a great fund managerThe skill that he would pass onto his childrenThe challenges he sees for the CTA space-----Resources & Links Mentioned in this Episode:Extraordinary Popular Delusions and The Madness of CrowdsThe Winner’s Cursebooks by Reinhold MessnerFollow 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.comAnd please share this episode with a like-minded friend and leave an honest Rating & Review...

22 Nov 20151h 12min

Andrew Baxter worked at British Aerospace as an engineer before joining the investment management world. He still considers himself an engineer.Listen in to learn how he uses machine learning, why he keeps innovating, and how he started his own firm.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:Why Andrew considers himself an engineerHow he went from engineer to investment managementHow he started his firmHis philosophy on the investment management processWhy he harvests risk premiumsWhat he likes to do when he is not workingHow he works with machine learningThe things they learned from their career history that helped them build Cambridge Capital ManagementWhy it is important to stay ahead of the pack and keep innovatingWhat they do in-house versus outsourcingThe culture that he tries to cultivate at his companyHow he talks about track record to his investorsHow he evolved as the managed futures industry changed over the yearsWhat he does to manage riskThe objective of his program from a top-down viewThe different markets that his program trades-----Resources & Links Mentioned in this Episode:Extraordinary Popular Delusions and The Madness of CrowdsThe Winner’s Cursebooks by Reinhold MessnerFollow 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.comAnd please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more...

15 Nov 20151h 16min

In this second part of our conversation, we dive into the specifics of how Charles Nenner and his team make their predictions, and what they predict in certain markets like Crude Oil, Copper, and Natural Gas. We also discuss the cycle of a major war at the beginning of each century, and David’s personal story of why he is just as curious today as the day he started.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:How they predict the price, and how the price and cycles work together.The fifth category they predict on is economic indicators.What is happening when a market is not behaving as the cycle they show indicates.What are some of the indicators of a big event like 9/11.Where he thinks Natural Gas is going.What he thinks about Copper.The battle between inflation and deflation and where he stands on those terms.About the 100 year war cycle and what he predicts for the next war.The cycles of infectious disease.Why they don’t have a fund that trades off of their predictions.The different types of clients they have.Why he does the job that he does.Why it is important to listen well.Why he thinks that thinking and listening are a lost art.-----Resources & Links Mentioned in this Episode:Read the article David mentions in this episode featuring his work in Oil & Gas Investor.David recommends reading Chaos by James Gleick.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.comAnd please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so...

15 Juli 20151h 5min

This episode has a unique and interesting guest, the kind we rarely have on this show. David Gurwitz does not trade in the financial markets, but provides predictions and research to many firms, including some we have interviewed. He looks at the cycles in financial markets. Keep an open mind during this episode and see what you can learn about Charles Nenner’s research methods, the start of their research business, and what predictions they have been correct on and which ones they missed.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:How David explains what he does, and how this interview is different.How he played semi-professional basketball in Spain before going into accounting.How he met Charles Nenner.How their business works and how cycles works.How Charles has predicted crude oil drop in 2014.What they look at when making their predictions.How they do media appearances and how media has changed.How they go about doing their research.Why sunspots might affect the stock market shifts.How different cultures are more open to the idea of cycles and their effect on the financial sector.The predictions they’ve made in recent years on the Yen, Gold, and the Euro.Why looking back at history can show interesting lessons.-----Resources & Links Mentioned in this Episode:Read the article David mentions in this episode featuring his work in Oil & Gas Investor.David recommends reading Chaos by James Gleick.Listen to past episodes with a predictions expert Mahendra Sharma here and here.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 <a...

7 Juli 20151h 10min

In this second part of our conversation, Natasha dives into the details of the trading model and portfolio of Altis Partners, her firm. We discuss how they approach risk management, and how they’ve dealt with drawdowns over the years. She also gives her take on the future of the managed futures industry, what advice she would give to emerging firm managers, and other lessons she has learned along the way.-----50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HEREIn This Episode, You’ll Learn:About how Natasha and her team constructs their portfolio.How their models are adaptive.What their integrated risk approach does and how it works.What she thinks the capacity is of the strategy that her firm has.How she defines risk.How correlations play a part in their portfolio.Which sectors of the market do well with their model.How she sets the expectations for what kinds of drawdowns they might have.How to help investors with the emotional rollercoaster of drawdowns.How the firm goes about doing research.How to detect if a certain model stops working.What lessons they have learned from all their years in business.How success changes your mindset.Why it’s good to have people to look up to.Her biggest challenge facing her firm today.What investors are not asking when at due diligence meetings with her firm.Why a long term relationship with a client is important.What advice she would give to emerging managers today.Where she thinks the managed futures industry is going as a whole.-----Resources & Links Mentioned in this Episode:Natasha recommends reading The Hard Thing About Hard Things, a book about building a business and entrepreneurship.She also recommends Fortune’s Formula, by William Poundstone.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.comAnd please share this episode...

5 Juli 20151h 3min