Monkeys Get Lucky

Nassim Nicholas Taleb wrote:

“f one puts an infinite number of monkeys in front of (strongly built) typewriters and lets them clap away, there is a certainty that one of them [will] come out with an exact version of the Iliad.”

I have seen others take that thought and apply it to trend following creatively:

“…[all trend following performance from all trend followers] means nothing primarily due to survivorship bias and the effects of randomness. If you can show me statistical evidence of trend following working in any time frame, my hats off to you.”

I don’t get that comment. All trend following performance is just luck? And the lucky few survivors (apparently all of the trend followers in my book) are left over from an apparently long list of failed trend followers? That’s the logic to explain away their performance results?

Another reader added to the discussion:

“The ultimate question is not about “survivorship,” it’s a question of suitability and adaptability. The track record of trend followers isn’t just a record of survivorship – it’s a record of adaptability under varying conditions. No one can get to their destination simply by theorizing about the nature of the destination – that’s linear thinking. These folks do not get the journey (the process), so they focus on the surviving trend followers. They obviously have no clue how to get lucky. The key questions they ought to be asking are “how did these trend followers get to survive? … how did they get to be ‘lucky’?”

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You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.