Top Traders Unplugged

BO37: Does Trend Following still work? Comments from David Harding, Cliff Asness & Stanley Druckenmiller

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Mar 17, 2020
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INSIGHT

Trend Following Still Works

  • Trend following still works despite industry changes and competitor pressure.
  • Business motives often drive shifts in trend following allocations, not its effectiveness.
INSIGHT

Algos Compress Market Volatility

  • New types of algorithms counteract market moves by pushing prices back towards the mean.
  • These algorithms compress price ranges and reduce market volatility, impacting trend following strategies.
ANECDOTE

Druckenmiller's Momentum Strategy

  • Stanley Druckenmiller develops investment theses and uses momentum to scale positions, akin to trend following.
  • He noted markets' changing "rhythm" due to algos, which challenges traditional strategies.
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