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Trend Following Performance: Huge Returns for Centuries

Trend following trading can be applied to many different instruments (futures, ETFs & LEAPs, for ex.) and many different markets such as currencies (FX, forex), interest rates, global stock indices, grains, softs, meats, metals and energies. It has also been applied to the great tech names: Google, Apple, Priceline, Tesla, Amazon, Las Vegas Sands & Facebook, etc. The strategy is not limited to USA. It is for all types of markets in all countries, i.e. Singapore to China to Turkey to Japan to Switzerland, etc.

This is the strategy that has universal applicability. No fundamentals needed.

Broadly how can it done on so many different markets?

Greed, fear, human nature and big trends up and down. That’s how. Measure it, trade it.

Consider that for a moment.

Next you might say, but is this really needed? Just trust the Fed + buy and hold. Right? Wrong. Do you want to trust this:

Bottom line, furthering the cause of trend following moneymaking benefits has driven me since 1996. In recent years both academics and large funds have further validated the very long-term success of trend following investing. Consider three research efforts:

  • A Century of Evidence on Trend-Following Investing (paper): Trend following investing has delivered strong positive returns over diverse economic environments each decade since 1903 — over 110 years (PDF).
  • Two Centuries of Trend Following (paper): The existence of anomalous excess returns based on trend following strategies across four asset classes (commodities, currencies, stock indices, bonds) and over very long time scales is established. Studies are both futures time series that exist since 1960 and spot time series that go back to 1800 on commodities and indices (PDF).
  • Larry Hite’s trend following firm ISAM has analyzed trend following back 800 years. Their research is discussed on an upcoming podcast episode.

Beyond the long term academic works, one of my first recommended steps is to absorb trend following success that has come before you. That breeds immense confidence. A great example of that success? Bill Dunn. He is one of the great trend followers. First ballot Hall of Fame. He has been successfully trading as a trend follower for big money since 1974. His continuous track record has never been featured on CNBC or in the pages of the WSJ. Michael Covel’s firm Trend Following™/TurtleTrader® has long maintained that an examination alone of Dunn’s track record could serve as a PhD-level trend following class. Consider these eye-popping performance numbers:


NOTE: Dunn’s WMA program was up +34.16% in 2013.

Makes you immediately realize how much less index investing produces, right? No one can promise that you will become the next Bill Dunn or produce his returns. Further, my firm is not an agent for Dunn Capital, but his performance is a historical marker on file with the U.S. government that every investor should understand (assuming they are tired of buy and hope). His performance is proof that classic long term trend following can win big time. If you want to be a trend follower, if you want the foundation to have a chance at the big money, you can start a proven trend following education immediately.


Bill Dunn

Trend Following Performance: Huge Returns for Decades

No one can promise you these exact trend following returns, but you will be on the right track toward the chance for big numbers with my proven trend following solutions.

Salem Abraham is in Michael Covel’s books Trend Following and The Complete TurtleTrader. He is also in Covel’s film:

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Bill Dunn is in Michael Covel’s books Trend Following and Trend Commandments:

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William Eckhardt is in Michael Covel’s book The Complete TurtleTrader:

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Tom Shanks (Hawksbill Capital) is in Michael Covel’s book The Complete TurtleTrader:

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Paul Mulvaney is in Michael Covel’s book The Little Book of Trading:

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David Harding (Winton Capital) is in Michael Covel’s books Trend Following and The Little Book of Trading. He is also in Covel’s film:

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Mark J. Walsh is in Michael Covel’s book The Complete TurtleTrader:

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Jerry Parker (Chesapeake Capital) is in Michael Covel’s books Trend Following and The Complete TurtleTrader:

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Michael Clarke is in Michael Covel’s book The Little Book of Trading:

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Transtrend is in Michael Covel’s book Trend Commandments:

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Note: All charts are current (even if labels appear distorted).

Trend Following Hall of Fame

Who are some of the great trend following traders over the last 30 years? How much have they made? Consider:

  • Bruce Kovner: Kovner is a trend following trader featured in Jack Schwager’s ‘Market Wizards.’ He was trained by trend follower Michael Marcus. Marcus was trained by Ed Seykota. More on Seykota can be found in ‘Trend Following.’ Kovner is worth over $3.5 billion (source).
  • John W. Henry: Henry is a trend following trader featured in Trend Following. He is worth $840 million (source). He used his trend following gains to buy the Boston Red Sox for $700 million.
  • Bill Dunn: Dunn is a trend following trader featured in Trend Following.’ Dunn made $80 million in 2008 when the rest of the world was blowing up.
  • Michael Marcus: Marcus is a trend following trader featured in Jack Schwager’s Market Wizards. He turned an initial $30,000 into $80 million (source).
  • David Harding: Harding is a trend following trader featured in Trend Following. He is worth over $670 million (see above).
  • Ed Seykota: Seykota is a trend following trader featured in Trend Following. He turned $5,000 into $15 million over 12 years in his model account (an actual client account).
  • Kenneth Tropin: Trend following trader Tropin made $120 million in 2008 as buy and hold collapsed. Earlier in his career he led John W. Henry’s firm.

Will everyone make such huge amounts? No, but those trend followers all started as one-man shops and that is inspirational. Worst case? A small fraction of those huge fortunes would satisfy most people.


David Harding & Michael Covel in London

Trend Following Historical Winning Charts (Part 1)

Trend Following Historical Winning Charts (Part 2)

Trade All Markets

Trend following systems can be used on stocks, ETFs, LEAPs®, futures, currencies and all commodities. A small sample of the markets that can be traded as a trend following trader.

Learn How

Trend following systems with Michael Covel.

Disclaimers

Trend Following™/TurtleTrader® can not promise you will earn the returns of traders, charts or examples (real or hypothetical) stated. All past performance is not necessarily an indication of future results. Data presented is for educational purposes. All data on this site is direct from the CFTC, SEC, Yahoo Finance, Google and disclosure documents by managers mentioned herein. Trend Following™/TurtleTrader® assumes all data to be accurate, but assumes no responsibility for errors, omissions or clerical errors made by sources.

Trend Following™/TurtleTrader® is not registered as a securities broker-dealer or an investment adviser. This information is not designed to be used as an invitation for investment with any adviser profiled. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund.

Further, Trend Following™/TurtleTrader® cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing.

Additionally, Trend Following™/TurtleTrader® in no way warrants the solvency, financial condition, or investment advisability of any security or instrument. In addition, Trend Following™/TurtleTrader® accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as a basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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