AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Trend-Following in the Middle of a Crisis
For markets to move in tandem, there has to be a common perception or consensus about economic conditions that drive it. A major event such as the Russian debt default of August 1998 will often accelerate existing trends already in place. Anyone who accepts a small risk of losing everything will lose everything sooner or later. The ultimate compound return rate is acutely sensitive to fat-tails.