I was speaking with a top trend following trader today. He manages over $100 million and made over +20% for the month of October, so yes he passes the credibility test! He told me that following their October performance they sent their results to over 500 media outlets. One responded. One. That one said, “well, I guess we need to get around to looking at the CTAs.”
Get around? The entire world is crashing, trend following traders (CTA is a regulatory term imposed by government to classify trend followers) are making a killing, and this reporter will get around to it? Why such ignorance? Most reporters, I am serious, are not qualified or perhaps even capable intellectually of understanding trend following trading. There is extreme ignorance. I thought that there was ignorance in 1996. Twelve years later and it seems worse!
December 3rd, 2008 at 9:14 pm
As a former member of the media (editor of two newspapers), I can truly say, you are right. What you speak of is basically Greek to most of us - which is why the newspapers and broadcast stations are failing, and those of us who used to be “media” got out of the business to make real money on our own, so we had something to actually invest.
December 3rd, 2008 at 9:25 pm
Hollee thanks for honest response. To be clear, I am not saying reporters are all stupid (some are of course), but many are ignorant by and large. They have become cheerleaders to the “moment”. “Look, a dog is walking across the street!” That is news coverage today.
December 4th, 2008 at 8:57 am
The stock analysts are worst.
December 4th, 2008 at 9:30 am
Even the ones that seem to be the best are terrible…like the over-hyped stars at GS.
http://www.tltblog.com/?p=31
Anyways, to look at the bright side, don’t mean to appear bad, but I kind of like it the way it stays away from the spotlight; it leaves better opportunities for making money ;-)
December 4th, 2008 at 9:35 am
It sort of makes sense that the financial media would ignore those that take a long-term, systematic approach to trading markets. The media is simply in the business of selling advertising time. In order to perpetually sell time, CNBC (et. al.) needs to convince its viewers that it’s both relevant and helpful to the viewer’s financial success. Meanwhile, the one tenet that unifies all systematic traders (whether strict trend-followers or not) is that the news is completely useless. Therefore, CNBC has no incentive to say, “Look at this group producing tremendous returns that all agree that we (financial media) add no economic value to trading whatsoever.” It’s much healthier for CNBC to continue to sell its viewers on the “discretionary trading dream.”
December 4th, 2008 at 11:31 am
Cy nicely worded.
December 4th, 2008 at 11:39 am
i would just add that the media likes to create Drama… There is no drama in Trend Following.. Its a systematic approach that just works… How else would Managers get paid for guessing all day on the direction of price movements.. They create drama for the investors and media to buy into..
December 9th, 2008 at 6:34 pm
Actually, there is a lot of drama in trend following, just not the kind that sells advertising. The drama in trend following is the kind that can cause gigantic mood swings if you lack the discipline to keep swinging into strikeouts before hitting the home run…
December 9th, 2008 at 10:53 pm
Are all trend traders registered CTA’s?
December 10th, 2008 at 12:03 am
If you trade futures, the CFTC and their terms apply (i.e. CTA). Many trend followers use futures to trade stocks, energies, currencies, etc. which brings them into CTA land. If trading ETFs alone or stocks (not stock futures), no CTA designation needed.