Lost Big Time

There is this guy who is always touting Warren Buffett to me in email. I would think after years of apparently following my work closely, and writing me regularly, he might have a clue as to what trend following is, but not exactly. Big time blind spot. This in today from him:

Informative but overwhelming. I’ve always wondered what do you do when there are just as many bearish arguments as there are bullish arguments?


Can anyone else help this poor chap?

3 thoughts on “Lost Big Time

  1. Arguments don’t matter, price of the asset does. If it is trending up, be a bull. If it is trending down, be a bear.

  2. SO after reading all of his slides, the question is of what trading value does this evidence present?

    What markets does he recommend one trade?

    How much?

    When to exit?

    I am constantly surprised at the lengths that people go to to try to assure themselves they can see into the future.

  3. I think people keep confusing investing with trading. Buffett looks at companies in a similar fashion to Private Equity firms. He has infinite capital for all practical purposes, and can engineer alpha by cutting deals that mom and pop can’t get.

    The Goldman “trade” ? It was a hybrid security that was created and had the full faith and credit of Uncle Sam behind it. The IBM “trade” ? he got a special deal from the SEC that allowed him to accumulate a position that the average hedge fund manager would have had to disclose, and probably use derivatives to create a position without overpaying.

    But trading ? Buffett’s not the king of that game, nor any other “investors” with notoriety. Over the last 6 months, a simple trend following model would have lead you to shorting the most popular video rental company in the US, and making handsome profits in the process. Rock on, Mike.

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