Ep. 654: No Real Magic with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
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The Effect of Drury on Portfolio Performance
The two performance records taken individually during this period are broadly similar. Despite the overall similarity of returns, the paths to producing these returns have nothing in common. The portfolio with 50% each in Berkshire and Drury raised the risk-adjusted Rate of return to a level higher than either could achieve individually. For the holder of Berkshire, the diversification reduced the portfolio volatility by almost one-third while reducing the depth of the peak to trough drawdown by almost half.
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