Trend Following Conversation II
Building on yesterday’s conversation with a top trend follower, today in New York City I spent over half the day with one of the great trend following pros of all time. His trading career has spanned 30 years with many twists and turns. He is one very wise man - he gets it. This was the first time I had met this trader, but I did use a few of his quotes in my first book.
Why is he special? He is able to break down the complicated processes of life into chunks to better avoid the typical reasons people fail to accomplish their goals. He uses extreme focus on whatever entrepreneurial task he sets his mind too.
He also compares so many other aspects of life to trend following. One great example involved searching for oil. You will drill many wells with many of them coming up dry, but some will produce that black gold. If you know from the beginning that there will be many aborted attempts at success and that those attempts are a necessary part of finally finding oil, then you can accept the game as it is and deal with it.
It all gets back to a mindset of portfolio management. Not everything in a portfolio always makes money. Maybe once in a while everything will turn positive, but more often than not you will have the winners paying for the losers. Why do it this way? Like this great trader pointed out — he can’t predict and nor can anyone else.
