“The trend… can be a friend, but you have to choose your friends wisely!”

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Hello Michael,

Thank you for all the work you have done. I truely appreciate your books. I suppose I have always been a closet Trendi… but strongly influenced by technicals such as head and shoulders, double tops etc. Unfortunately I could rarely operate in name as a Trendi!

Why?

I was an international fund manager for 21 years and handled up to $10 billion dollars in one Fund I worked for 3 major pension funds… sold out $10 billion of stock in 6 international markets in 1987… 2 weeks before the crash and had a 47% return that year… Why? Because the US market had a clear double top and it was a market which just about played every extreme. Later in 1992 I went into stockbroking. Now again a closet Trendi… Why in my two careers was I a closet Trendi?

A) In Fund management … big reports of bullshit figures for a boards consumption (yes, they still want and believe in it) and you give them what they truly believe!!!! And in Stock Broking… you speak the numbers… and then of course better and better numbers in other shares. Numbers to generate movement and commission. You are keeping the ball in the air. Hard to be a Trendi but under “other reasons” clients got taken out at the end of a positive trend. Sometimes only on strong persuasion were they persuaded to go… but good things stay good too long and every client can’t sell. Well 99% can’t sell and they loose unless the broker berates them. I have heard a million reasons why clients don’t want to sell and they are all greed or plainly a form of “hypnotic trance.” Like a kangaroo in a cars head lights they get paralyzed and can’t run!!! So I call this inability to sell “The Kangaroo Effect” “It’s the smart Trendi’s winning edge”… he’s out and the crowd continue and continue to be mesmerized by the light! So today I run my own money and for the record I am a total Trendi.

I have learned a lot from Gann and many other writers on “the trend”. Yes I have started reading all your books to gain a greater and greater insight… all good stuff… they are piled up beside me. And I enjoyed your movie, especially the winning strategy of successful poker players. A great insight and just the movement of the sheep, crowd Psychology, it was a terrific movie. Can you suggest any more good books to read?

I have my own system and so far so good, but if I can get a better stop out process and entry process then I will adopt it … so I keep reading and I keep learning to improve my game. I don’t know whether I am a natural, time will tell. But in two years I have turned $50,000 into $1.7 million. Many questions in my mind remain unanswered.

Why did the smartest Trendi, Jessie Livermore, loose it after getting it so right? How much of a Trendi was Bernie Baruch? Is Warren Buffett really a closet Trendi?

Why do so many Fund Managers average down but rarely average up and why do so few fund managers ever cut their loosing positions (my own belief is the ego is too big to admit a mistake)? Yes it’s always just a bad market! Much easier to sell a bad market to the directors rather than admit a mistake and get kicked out pronto… After all, directors can only do one thing with people who make consistent mistakes… even if they are very good and consistently out perform the index!!! It’s like Eric Barker says in “Barking up the wrong tree”. Good people who follow the systems that prevail are trusted even though the Philosophy is wrong. So smart people know they can only operate the correct philosophy to win under disguise!!! Could successful people all be outliers, just closeting themselves and appearing to be true company men? I know I did it because people love stories and any story can be designed to fit success! I am glad I finally can do it all my way and can stick to my knitting… The trend in the end, can be a friend, but you have to choose your friends wisely!

Your strong supporter.
[Name]

Thanks!

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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.