TTU04: What it Takes to Become a Great Trader ft. Mike Dever of Brandywine Asset Management – 2of2
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 5 June 2014
⏱️ 44 minutes
🧾️ Download transcript
Summary
In this episode we continue our conversation with the founder and CEO of Brandywine Asset Management and discuss the aspects of what makes his rule based asset management style so successful.
Enjoy the second part of my conversation with, Mike Dever.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In This Episode, You’ll Learn:
- Continuing the Conversation around why Trend Following can be more difficult
- Describing Disparate Return Drivers
- How Brandywine Assets Management actually implements the decisions of their trading model
- Why Position Sizing and Risk Management Principles are Everything
- How position sizes are managed across various Return Drivers
- Why Sharpe Ratio is a meaningless measure on it’s own. It doesn’t give you any idea on predictability of returns.
- The professional traders approach to the emotional challenges of drawdown.
- Managing regulation challenges
- The environment of marketing trend following strategies to investors
- What it takes to become a great trader today
- Who Mike started out aspiring to be like
- If Mike has any personal habits that contribute to his success
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Resources & Links Mentioned in this Episode:
- Jackass Investing by Mike Dever
- Learn about Dick Donchian the Grandfather of Trend Following
- Learn about Poul Tudor Jones of Robin Hood Foundation
- Learn about John W. Henry
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
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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.
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Transcript
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| 0:00.0 | You're listening to Top Traders Unplugged, episode number 0.04, where I continue my conversation with Mike Dever, founder and CEO of Brandywine Asset Management. |
| 0:11.8 | This episode is sponsored by Saxo Bank and Swiss Financial Services. Welcome back to Top Traders Unplugged, |
| 0:19.0 | where the best traders in the world come to share their |
| 0:21.6 | experiences, their successes, and their failures. |
| 0:24.7 | Let's rejoin the conversation with your host, veteran hedge fund manager, Nealz Kastro Flaarson. It's actually a real mix. |
| 0:41.5 | I mean, we do have some that trade with holding periods that would be, say, a losing trade that's many months and a winning trade that could be a year or more. |
| 0:52.3 | But we also have rather short term. |
| 0:57.3 | You know, winning trade might be two months long. You know, it's for trend following, which is, |
| 1:02.9 | you know, pretty short term. I think a lot of the problem does get to the fact that people don't |
| 1:08.5 | like to trade, as you pointed out, which is, I think, a great comment |
| 1:11.6 | that people don't like to trade some of the more difficult strategies to trade. And I think |
| 1:15.5 | one of the things that's helped make trend-fowing traders successful over the last few decades |
| 1:20.7 | is that it's not an easy strategy to trade. You know, so I mean, you've got to sit there and, |
| 1:30.0 | you know, ride through multiple years sometimes. It's just terrible performance. You know, so, I mean, you've got to sit there and, you know, ride through multiple years sometimes. |
| 1:34.3 | It's just terrible performance and then wait for that quarter where it all comes back and you make money. |
| 1:41.6 | I think by maybe trying to just focus on trend following and smoothing returns within that style of trading, |
| 1:44.3 | people have started curve-fitting their strategies a little too much on the past data to make it look like they had solved the problem when in reality, |
| 1:49.5 | all they did was lower their predictability of performance. |
| 1:52.6 | You know, there's nothing worse than doing that because then going forward, you don't |
| 1:56.6 | know what you're going to get. |
| 1:58.2 | And I think that's what surprised maybe a lot of these people who might have overly fit their strategies to the past data. You know, I think that's a great point. |
| 2:06.1 | And I think, you know, I really like the way that you phrase it and have the focus on predictability |
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