Top Traders Unplugged

SI291: Trend Following...What should it mean to Investors? ft. Richard Brennan

Apr 13, 2024

Industry expert Richard Brennan challenges traditional trend following strategies, advocating for a simpler narrative. Topics include optimal trend allocation, fiduciary responsibilities, evolving industry trends, marketing challenges, and the impact of crises on the economy. The podcast explores the ethical considerations of trend following, innovative portfolio strategies, and the importance of maintaining uniqueness for exceptional performance.

01:09:54

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Episode guests

Richard Brennan

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Quick takeaways

Trend following offers diversified exposure across asset classes for uncorrelated returns.

Trend following demonstrates outperformance and drawdown restraint compared to buy-and-hold strategies.

Establishing clear thresholds and characteristics is crucial for defining trend-following strategies and communicating goals effectively.

Deep dives

Diversified Exposure Across Asset Classes

Trend following focuses on diversified exposure across asset classes to provide an uncorrelated relationship with single asset classes like stocks or bonds. The methodology encompasses not just futures, but also investments in stocks, commodities, and other liquid asset classes. This diversification allows trend following to offer an uncorrelated nature, providing a broad appeal to investors seeking non-correlated investment strategies.

Introduction

2min

Optimism for Future Opportunities in Trending Market Environment

22min

Exploring Fiduciary Responsibility and Investment Ethics in Trend Following

3min

Demystifying Marketing Trend Investing

15min

Exploring an Innovative Approach to Enhancing Trend Allocation in Portfolios

4min

Navigating the Evolution of Trend Following

13min

Revealing the Hidden Impact of Crises Through Firm-Level Data Analysis

7min

Reflective Insights on Trend Following and Industry Civility

4min

In this episode, we are joined by Richard Brennan to discuss why now is the time to step up your trend following allocation. Rich challenges Andrew Beer’s conclusion that a 3% allocation to trend following is the sweet spot and explains why he believes the trend following industry should simplify its narrative and quit the fancy “jargon”. We also discuss what defines a trend follower and why we may be losing the incentive to keep improving as trend followers, new research on the impact of crises and much more.

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

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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.com

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Episode TimeStamps:

02:08 - What has been on our radar recently?

08:33 - Industry performance update

16:02 - What is the optimal allocation to trend following?

24:02 - Do trend followers have fiduciary responsibility?

27:09 - Why is Andrew Beer having trouble with his trend following allocation?

31:30 - Are we moving too far away from the classic trend following?

37:21 - What does it take to call yourself a trend follower?

42:01 - Discussing Corey Hoffstein's approach

46:44 - What about the fees?

50:34 - Are we losing the incentive to improve?

58:45 - The impact of crises

01:07:11 - Sign up for our new newsletter

01:08:26 - What is up for next week?

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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

In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here

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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