Come on WSJ

From WSJ this week:

“Hedge funds known as trend followers – which chase market movements, rather than making fundamental investment decisions – also appear to have been hurt on bad trades.”

Notice the not so subtle slap against trend following above. It’s the cavalier and reckless sounding “chase” versus the wise and stoic sounding “fundamental investment decisions.”

Also, I notice the emotionally charged use of “bad trade.” What was the bad trade? A preset loss to take that trend followers knew about in advance of ever entering the position?

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.

13 thoughts on “Come on WSJ

  1. Just as Larry Hite said in “Broke”. You can win on a bad trade and lose on a good trade. If you keep making bad trades, eventually it’s going to catch up with you. If you keep making good trades, eventually you’ll be able to ride that bad boy for huge profits.

    Obviously, WSJ doesn’t understand trading when the odds are with you. Do they ever look at the track record of trend followers? Drawdowns are as natural as walking. Without them, you’re not taking risks. And without risk, you’ll never make money.

    What about that is so difficult for people to understand? Maybe, it’s because this article was written by someone whose never placed a trade in their life (I don’t know that as fact, but I place some money on it).

  2. Most people need a fundamental reason to initiate a trade and/or hold on to a position. also use such reasons to avoid being wrong.


  4. Everyone who follows this site knows that trendfollowing works. I myself am happy that such a widely published newspaper puts out anti-trendfollowing articles. The more people listen, read, and agree with the WSJ story…the more money for us.

  5. WSJ bashing trend following bears resemblance to the unemployed coaches that serve as color commentators in NFL and MLB games that bash decisions by Bill Belichick or Ron Gardenhire.

  6. CJS, I disagree, at least the former coaches know something! These reporters don’t even know what the subject is! 🙂

  7. Fundamentalists never make bad trades Mike! If the price goes down after they buy something, it’s that much better becuase now it’s “cheaper” and they can average down.

    If the trade doesn’t work out, well, that’s not their fault, the market just doesn’t see the “value” that they saw.


  8. @ Michael T.

    I agree !!! Let the sheep graze on grass, while the lions eat the sheep. It’s a zero sum game. Be on the winning side, and thank the WSJ and CNBC for training more “sheeple”.

  9. Re. the WSJ quote: That’s an impressively pithy piece of writing, as slimy smears go. Jam-packed with weaselly pejoratives! Sadly, this seems to be typical of what passes for journalism.

  10. Trendfollwers may have been “hurt on bad trades” in the same sense that Babe Ruth had the most strikeouts…he also had the most home runs!

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