"The market's trend followers have become detached from the market's fundamental analysts. "Momentum" has moved from being a diversified style bet to a concentrated industry bet. Designed to follow broad market trends, it is now heavily tethered to the fate of the AI sector. @ManAHL
https://t.co/g07sSyKoS9
Your brain is bluffing you every day.
And it’s costing you. Big time.
Nobel Prize winner Daniel Kahneman designed 7 brutal questions.
They’re a BS detector for your mind.
Most people walk straight into mental traps.
Be the exception, not the victim. 🧵
Traders tend to come up with unproductive ways to improve their systems during drawdowns. It’s a medicinal response that has long-term damaging effects.
Traders who expect history to repeat fall into dangerous traps:
Overfitting – Designing models too dependent on past data.
Missing opportunities – Hesitating on breakouts because they don’t match past trends.
Underestimating outliers – Trends seem “too extreme” compared to history.
"Any liquid market has the potential to be the source of persistent and profitable trends and an equal contributor over the long run. You don't know when and where these trends may occur, so it is important to run the most diversified investment universe possible."
https://t.co/Qpglls2XVP
https://t.co/udyGg3cpi6
Consider again that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives.
- Carl Sagan
"Anchoring bias is very powerful, and it tends to prevent things from moving as far as they should. There will be people who fight some powerful trends based on where things have been in the past. It doesn't flow naturally to some new level. But how do you know the right level? That's partly why you've got anchoring bias; you don't, so you rely a lot on the past."
https://t.co/3rpYkVhpsC
"There is the assumption that new ideas are best. I do not subscribe to this thinking. We can learn a lot from the best thinkers of the past and in the investment area, Marty Zweig was a great technical equity trader."
https://t.co/0cOOUHPXzk
Hope is a central theme in “The Shawshank Redemption.” We’re not trying to characterize #investing as serving a prison sentence, nor are we saying that hope is a bad thing. But the idea of NOT relying on hope as a strategy resonates with us: https://t.co/BTvygS2TKb.