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Trend Following by Michael W. Covel

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4. Big Events, Crashes, and Panics

“I have noticed that everyone who ever told me that the markets are efficient is poor.”—Larry Hite, Mint Investment Management Company

“Rare events are always unexpected, otherwise they would not occur.”

Nassim Taleb1

To comprehend trend following’s true impact, you have to look at trend followers’ performance data—the returns they generate. Their performance data makes clear that they were the winners in the biggest trading events, bubbles, and crashes of the last 30 years. This chapter outlines high profile times where trend followers won huge profits in the zero-sum game.

An investment in DUNN acts as a hedge against unpredictable market crises.

Dunn Capital Management

Wall Street is famous ...

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