A Review from Mars

I saw this review recently about Trend Following:

“This is a poorly written book that is riddled with survivor bias. Furthermore, it never gives specific advice regarding how to find the trends to follow. Instead, it just profiles the heroics of guys who could see big trends coming (by some means other than systematic technical analysis) and won big by guessing right. What a frustrating piece of junk.”

I do not profess to be a literary giant and people will have different tastes for different writing styles. Fair enough. But the notion that the traders profiled in Trend Following (and trend followers not profiled) were “guessing” right for 30 years and were not using systematic technical analysis – is asinine.

Now in all fairness, maybe this reviewer doesn’t get what trend following is? I found another review by this same person for another book. It said:

I’m in the process of getting serious about investing as returns from existing investments are now a sizable part of my annual income. This book’s main argument, that the stock market is going to be flat, at best, over the next decade seems pretty persuasive. The most persuasive reasons for this are:

– The market, when starting from a high P/E and low interest rates, historically is flat at best.
– The market historically overreacts to a bubble (like the Internet bubble) and we have not yet completed that overreaction.

[The author] recommends:

– Small-cap value oriented stock picking. This is the direction I was already intending to pursue. I think I’m going to need some help with this find the right kind of stock screening data.
– Hedge funds. This is counter to my strategy (and the whole value approach to investing) of really, deeply understanding your investments.
– Betting on a falling dollar. [The author] provides no specific ways of doing this.

I’m interesting in joining a club of serious investors who want to pool what they are learning in the areas of small-cap and value investing.”

It is fair to say this reviewer doesn’t get it. Frankly, I would like him to see it, but I do it find interesting how some people simply miss what trend following is and how it works.