I interviewed a Miami area trend follower in his office this past Friday. While a younger man in terms of age, he has a track record exceeding 20% per year dating back to the early 1990s. He manages nearly $500M USD for clients.
In a surprising way, he quickly jumped into the philosophical elements of trend trading. All he could do was shake his head when I mentioned that some people still feel his kind of trading is bogus. “Do they not add up the profits” was his paraphrased response back.
He did drive home a crucial point about diversification from his perspective. Essentially he said, “what is the point of diversification if you can simply ride the big trenders each year while excluding the losers from your portfolio?” Of course this really would be the Holy Grail of trading, but perhaps as this trader hinted “some” are headed there as we speak.