BO19: The Evolution and Future of Trend Following

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 21 May 2019

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

Regardless of the investment strategy that you apply to the markets, your strategy or approach needs to evolve over time. The way we did Trend Following back in the 1970s, 1980s & 1990s is not exactly the way we do it today, and I think this can be said about most, if not all strategies. Now with some strategies, the model decay is so rapid, that if you don’t adapt quickly you can lose your edge. I think short-term strategies are good examples of this. Trend Following, being a longer-term strategy is, in my opinion, a lot slower when it comes to Model Decay… so you need to have been around for a really long time in order to have witnessed this evolution.

So when I looked through my list of guests to pull a few golden nuggets from on this theme, I thought that Marty Lueck, the co-founder of AHL and Aspect Capital would be the perfect person for this. So enjoy these unique takeaways from my conversation with Marty.

Listen to the full episode here. Part 1 & Part 2.

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Transcript

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0:00.0	No matter what investment strategy you apply to the market, your strategy or approach needs to evolve over time.
0:08.0	The way we did trend following back in the 1970s, 80s or 90s is not exactly the way we do today.
0:14.0	And I think this can be said about most, if not all, strategies.
0:18.0	Now with some strategies, I think there is a bigger need for evolution
0:22.6	where the model decay is so rapid that if you don't adapt quickly,
0:26.6	you lose your edge.
0:28.6	I think shorter-term strategies are a good example of this.
0:32.6	When it comes to trend following being a longer-term strategy,
0:36.6	there is in my opinion a slower pace when
0:39.4	it comes to model decay.
0:41.5	So you need to have been around for a really long time in order to have witnessed this evolution.
0:47.6	And so when I look through my list of guests to pull a few gold nuggets from on this theme,
0:53.5	I thought that Marty Lueig, the co-founder
0:55.6	of AHL and Asper Capital, would be the perfect person for this.
1:00.8	So sit back and relax and enjoy these unique takeaways from my conversation with Marty.
1:06.5	And if you would like to hear the full conversation, and I hope you do, just go to top traders
1:11.6	on blog.com forward slash 37 and also forward slash 38.
1:21.5	What has been the biggest changes over time and or is it really small incremental changes or is there something
1:29.5	where you look back and and and you say oh in the last 15 years you know 2008 or 2009 or whatever
1:36.1	it might be you know we did actually discover something that we would say was a that was a big
1:42.7	upgrade or that was a big key finding.
1:46.6	I will highlight, by and large, it is very much an incremental process.
	...

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