As a continuation to a lively discussion with my good mate Rainman, i thought i would start a thread instead of clogging up the other one that was being dragged away off topic...
If a mod would be so kind as to move some of the discussion it would be greatly appreciated.
So besides some of the Tutlle Traders, i thought i would present a 'Hedge Fund Market Wizard' from Jack's Schwagger's book of the same name.
Edward Thorp is a quantitative trader that used statistical arbitrage as well as trend following strategies throughout his long career...
To Quote the Book
"Thorp's original fund, Princeton Newport Partners, ran for 19 years and had an annualized compound gross return of 19.1 percent. It is not the return, that sets Thorp apart. PNP compiled a track record of 227 winning months and only 3 losing months (all under 1%) - an extraordinary 98.7 % winning percentage."
Hows that for a minimal drawdown. It was not all trend following though.
Bill Dunn also compiled a great track record as a trend following trader. bill dunn.jpg
Mulvaney Capital as well, but none could compete with Thorp's draw-downs....mul cap.jpg
More From Michael Covel's site:
Ed Seykota: Seykota is a trend following trader featured in Trend Following. He turned $5,000 into $15 million over 12 years in his model account (an actual client account).
Michael Marcus: Marcus is a trend following trader featured in Jack Schwager’s Market Wizards. He turned an initial $30,000 into $80 million
Kenneth Tropin: Trend following trader Tropin made $120 million in 2008 as buy and hold collapsed. Earlier in his career he led John W. Henry’s firm.
So as you can see, there are other ways to invest other than value investing. I totally agree that Buffets return are admirable, but not many can hold through the pain of the drawdowns, as illustrated in the Berkshire chart.