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« Count Clarity | Main | Ground Hog Market & The Super Bowl Indicator »

Sunday, January 25, 2009

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DG

OK, so let's say that this "system" with it's massive returns isn't discovered by a homeless man with only $1 to invest and who needs his gains right away, but by a millionaire who can fund his account with $1000 from accumulated savings without impacting his lifestyle, so he can allow the gains to compound BECAUSE HE ALREADY HAS ENOUGH CAPITAL TO LIVE OFF and the $1000 isn't going to need to be touched, which is probably the more likely scenario, anyway. I mean, the odds are that at least one "Turtle" would have started the system as a millionaire, right? Or at least there was someone out there in the world who had $1000 sitting around that they wouldn't need to touch for 20 years. Maybe they got it from their grandmother when she died. So where are the "Turtle" trillionaires and why did the "official" Turtle site try to convince me that the man making 35% a year is the "best trader in the world" when there are Turtles out there making 1100% a year? I mean, that's just cruel.

1983 54.90% $1,549.00
1984 298.10% $6,166.57
1985 428.40% $32,584.15
1986 225.30% $105,996.24
1987 1158.80% $1,334,280.69
1988 98.80% $2,652,550.02
1989 152.40% $6,695,036.24
1990 509.10% $40,779,465.76
1991 109.00% $85,229,083.44
1992 238.30% $288,329,989.29
1993 311.30% $1,185,901,245.96
1994 16.00% $1,375,645,445.31
1995 177.70% $3,820,167,401.64
1996 2.90% $3,930,952,256.28
1997 186.50% $11,262,178,214.25
1998 491.30% $66,593,259,780.89
1999 54.40% $102,819,993,101.69
2000 222.70% $331,800,117,739.14
2001 204.20% $1,009,335,958,162.47
2002 252.10% $3,553,871,908,690.07
2003 305.60% $14,414,504,461,646.90
2004 90.90% $27,517,289,017,284.00
2005 32.80% $36,542,959,814,953.10
2006 155.50% $93,367,262,327,205.20
2007 116.70% $202,326,857,463,054.00
2008 1504.10% $3,245,525,120,564,840.00


The fact that you don't get this even after repeated attempts to show you that there are wealthy hedge fund clients paying Renaissance Technologies huge fees in order to get them 35% CAGR returns shows that, even if you studied philosophy, you're not exactly Socrates.

And you're clearly so hung up on this "least bad" model of market timers that no amount of empirical evidence to the contrary is going to sway you from it because you're treating it like it's some sort of wisdom of the ancients that you've discovered. But, contrary to your beliefs, sometimes the "best player" on a terrible team is worthy of the Hall of Fame. Ernie Banks played for some of the worst teams in baseball history in Chicago, yet he was a Hall of Fame first ballot entrant. By your analysis, Ernie Banks had to be terrible because the team he played for was terrible.

Also, if you look at the distribution of trading returns you'd realize that the top 10 timers always beat the market, regardless of who they are in any given year. Think of the normal distribution, aka the bell curve, with "the market" sitting right in the middle, the worst traders on the extreme left and the best traders on the extreme right. By definition, the best traders earned higher returns than the market.

Again, you are trying to debate statistics and distributions and probabilities with a statistics major. You cannot win. I'm only trying to be gracious in victory.

Wavist

Actually quite to the contrary you are once again displaying your incapability of grasping what are by any standards some pretty basic concepts here. Repeating the fact that a successful hedge fund attained 35% pa as apparent evidence for the incapability of turtling to achieve a good deal more is demonstrating that you have failed once again to differentiate between the performance of a hedge fund - an organisation set up for the management of capital for high net worth individuals - and the system of turtling that was arguably invented by said hedge funds manager in his glory days as a private trader. There is no such thing incidentally as an 'official turtle website' simply because trend following is such a basic and widespread technique. The fact that the website of one of his original disciples is making a reference to the his teacher's genius is hardly surprising. Had it occurred to you that there may actually be a distinction between a hedge fund and a trading system you may have bothered to put in the effort necessary to find out a little more about what it actually was that the system's publisher is still venerated for. At that point you would have become aware that it is not for his success at managing a hedge fund at 35% growth pa (which incidentally is after costs including a 20% management fee so its actual growth was around 60%, Trend Followers - 1, Glen Neely - nil) but rather his early success as a trader and teacher before by his own admission he became sidetracked by his natural inclination towards value investing. Incidentally as you're taking Russell Sands' website as the paragon of trend following, you may have bothered mentioning that Sands himself regularly achieves 100-200 percentage growth annually and attracts publicity by publishing similar results from his students, but I guess that wouldn't have helped your broken case...funny how Neely doesn't do the same... In any event far from victory you have already lost every argument that you have made but are unfortunately too dense to even realise it. Which is really rather unsurprising for someone who specialises in arranging facts and figures without unfortunately ever having grasped the basic fundaments of logic. I had seriously believed that you were intentionally obfuscating with the use of statistics as I couldn't quite believe that anyone could be quite that incapacitated. It is most unfortunate that you clearly have no understanding of how the arguments for which you have listed further fantastical digits had already been defeated and rendered obsolete before your first set were presented. Nonetheless here we go again like a broken record. The fact that any amount of capital when left to compound any amount of growth will eventually reach astronomical levels can often seem quite overpowering to the experientially challenged. It frequently comes across as quite incredible simply by virtue of the theoretical possibilities never in fact materialising in the physical world. It is actually quite risible that you argue against the possibility of greater than 35% growth - an historical fact but your magic number as it enables you to continue venerating your leader - on the basis that someone with the cash to spare would accumulate more capital than is imaginable. This is for several pretty obvious practical reasons such as for example the fact that the argument applies equally to lower levels of growth over longer periods of time, that there is nobody who has ever grown his capital through compounding high levels of growth over decades without making any withdrawals, that there quickly comes a stage at which the importance of capital protection outweighs that of growth to the high net worth individual and so more protective strategies will often be looked at by those who have had growth of those levels, and that gearing is only available at the high levels associate through derivatives up to a limited value to mention just a few practical points however as your argument had already been conceptually defeated earlier the fact that you continue to rehash this fantasy shows that you are unfortunately too ideologically motivated to recognise the failure of your arguments on theoretical grounds. As such much as I find the gathering of vulgar data immensely distasteful it is evident that you will not be psychologically able to put down your number sheet otherwise. Fortunately as a sufficient amount of the necessary data was spelled out on that site all that is needed now is a reference to sufficient data to demonstrate that even the largest of these returns was not only achievable but without any great foresight and no that no special skills set was required other than the ability to draw a trendline. At which point it actually becomes entirely irrelevant whether or not that company actually achieved their advertised results as the capability to do so using their advertised method would have been demonstrated. I find it quite astonishing that you are apparently incapable of clicking on a simple link to find the precise trades that historically would have produced these returns, both in 2007 when trend following produced their more regular returns at 117% and even in 08 - the year of their highest ever returns of 1504% which you are suggesting to be utterly bizarre. Nevertheless here they are:

http://www.lstrader.co.uk/results.php

Again whilst it is certainly quite theoretically possible that this company never actually sent out the signals required for subscribers to place these trades it is actually not only highly unlikely considering that it would have been perfectly easy for them to have done so seeing as all of these trades were taken following the establishment of a new trendline - and therefore more difficult having to worry about concealing their fraud, but it is also pretty irrelevant whether this particular company actually did so or not as the methodology being used is so mindless that a computer could happily produce all of the necessary signals, or a kid with a ruler. I actually find your reference to Socrates quite hilarious considering that he was of course executed by governmental administrators who believed that their bean counting abilities would compensate for their failure to understand his pretty straightforward political arguments. And actually there's very little that I'm hung up about, the reason why I say that the best market timers are hopeless is simply because all of the empirical evidence says the same. The percentage of their right calls unfortunately is horrendous, pretty much across the board. Of course I do not have any intention of personally tracking down the ratio of any of the many analysts' right to wrong calls over any potentially useful time period as the amount of work that would need to be put into it is simply not worthwhile when as I have pointed out on several occasions previously - for anyone with a reasonably operating short-term memory - such analytical success actually adds surprisingly little to financial success in trading. Timers Digest does NOT list the the best and worst traders as you are claiming, only the success rates of newsletter writers who's occupation is timing the market. The two are not the same thing by any stretch. The point is that it would be most unfortunate if anyone was to believe that the way to find the best trading method is to search lists of market timers results, as - yet again - prediction of the markets direction makes up only a tiny part of most traders' success.

And following your mistaken appeal to authority I would point out that you are attempting debate with a philosophy major and unfortunately the content of your debate is irrelevant as you are clearly lacking the basic tools for reasoning per se - hence attempting, for the debate concluded a while back - you're merely repeating the same invalid arguments that have already been defeated...

Frankly I am not writing to convince you, as you are displaying all of the symptomology associated with those who have dedicated their lives to a particular path, whether religious, political or otherwise, and as such contrary to your denials you are actually far too wedded to the time, effort, and money that you have devoted to your leader. Unfortunately only time and experience will cause you to reevaluate your beliefs, so no I am writing for the benefit of anyone bored enough to actually still be reading this who may have been taken in by the real issue that I raised, which was of course the undeniably fraudulent nature of Neely's claims regarding his system's predictive ability. But in truth the case is not merely closed but was already settled on the last page, as evidenced by your repeated attempts to obfuscate aka bullshit your way past the real issue by diverting attention through the use of numbers. Just a thought, it's funny how I've been having this dialogue on a website called Yelnick when you consider why the creator actually called it that... Yelnick stands as a reminder that all forecasters will eventually be hoist by their own petard...

DG

Yep, that's exactly it.

DG

Incidentally, if you ever go bust as a trader, you probably have a good career as a professional writer of tiresome "letters to the editor".

Al from Oz

A Recession is when your friend loses his job
A Depression is when you lose your job
A Great Depression is when an economist loses his job

Makes me giggle.
Classic.
Touche
Al

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