Trend-following strategies make me think of algorithmic trading, where computers automatically identify and follow trends. Do you think human intuition still has a place in trend-following?
I believe human intuition, honed through experience and market analysis, is still essential for interpreting subtle marketnuances and adjusting trend-following strategies accordingly.
While algorithms provide data-driven insights, human judgment is crucial for interpreting market trends within the broader economic and geopolitical context.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.
Are the need for success early on / fear of loss later on not the same emotional experience? This convo was great, and gives me something to think about because initially, I'm not sure why changing our system after success (to be conservative) is perceived as good thinking, whereas changing the system early on is not
For the argument of trying to eliminate value traps by some quantitative rule based method, this reminds me of stop and frisk in NYC. People matching certain stereotype would be harassed and searched by police. They sometimes stopped bad guys but more often than not, innocent people were targeted. The "market" in this circumstance could adapt to not match the stereotype by not dressing a certain way so that over time only innocent people would be targeted. Similarly, accountants of firms in trouble could take steps so that such rules of filtering wouldn't be triggered. Static rules are due to stop working over time in a dynamic system. The focus on price to book may be pointless, as Value investing is supposed to be about figuring out what something is worth and purchasing it for less than that and doing one's best to make sure it's not a melting ice cube that's cheap on the way to zero.
Well this was a good listen this morning as my account was taking in the cash! You’ve got have a system and stick to it. Know your levels of Fear and Greed (I have 1% Fear and 99% Greed), and calibrate your system accordingly. Cheers guys! 🍻
