Today, we are joined by Jerry Parker where we dive into some of the highlights from the challenging month of July and how the industry has handled the current high level of volatility and trend reversals, why Trend Following continues to work but how narratives can create vicious reversals in the markets. We also discuss questions from listeners regarding Jerry’s strategies for entering and exiting trades, advice for backtesting using continuous futures contracts, how to handle stop losses and including equities in your allocation strategy. Lastly, Jerry describes why he is in favour of accidental diversification and why he is always on the hunt for outliers, why adding more markets has no impact on the robustness of a system and why he prefers to be a “slow tractor”. We finish off discussing how some firms claim that they can replicate the returns of Hedge Funds and CTAs without charging much for it and Jerry reveals a profound change to how he wants to extract trends from markets...even if it means that he will more correlated to Equities.
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Episode TimeStamps:
00:00 - Intro
02:02 - Market overview
03:52 - Major events of the month
16:00 - The importance of narratives
19:16 - How Jerry handles equities
22:39 - Q1, Michael: How does Jerry enter a new trade after he exited his first?
25:55 - Q2, Caleb: Backtesting using continuous futures contracts
30:02 - Q3, Adam: How to use stop losses and equities inclusion
36:09 - Jerry's big reveal: "CTAs focus too much on diversification and correlation..."
45:42 - Tweet 1: Improving equity risk concentration
50:53 - Tweet 2: Diversification - a free lunch
53:01 - Tweet 3: Predictable vs. unpredictable inflation
56:55 - Tweet 4: Tractors picking out sports cars from ditches
58:57 - Tweet 5: Doing what you want is what people actually want
01:02:09 - Tweet 6: Non normal world is uncapped
01:05:01 - Replicating CTA performance at little cost...Andrew Beer style
01:21:05 - Industry 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
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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
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