Why bitcoin trend following should be in everyone’s portfolio

The profits of the the 1970s trend following strategies have arrived to 2020 Bitcoin trading
The profits of the the 1970s trend following strategies have arrived to 2020 Bitcoin trading

So the pseudo intellectuals over at Globe research have another piece they want me to read. Normally, I’d glance over the pictures, tell them thanks for the effort and move along.

Not this time.

Trading trends has been around for centuries, and big important people who manage more money than most countries have written about it, like Cliff Asness at AQR and Bouchaud over at CFM. Most of my time trading trends has been spent trying to catch intraday moves, looking over various indicators working out whether big fish wanting to buy are about to push price or whatever.

Instead, Globe Research look over the entire history of bitcoin, ever since it was a glimmer in Satoshi’s eyes and (apparently) all possible trend following strategies using the classic moving averages that made big money in commodities in the 70s, and possibly even the newer stuff that Winton, etc. won’t tell you about.

I have no idea what this picture means, but I think green is money and you don’t need to be smart to get it:

Globe Trade - XBTUSD spot Sharpe ratio & S&P 500 futures Sharpe ratio

Like most amateur money managers, I’ve clicked around articles on investopedia about MPT portfolios, risk-parity, and the like, but the moment you see a trading strategy that just runs and runs for years, and gets risk-adjusted returns like that, zigging when equities zag… well it just goes in any portfolio, any allocation as long as you don’t get short squeezed by an exchange that knows your position and moves all the quotes…

You could pay someone else to run the strategy for you, or just moon it by cloning the repo. Your choice.

I choose to get rich and stay rich.

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