Top Traders Unplugged TTU145: All In on Trend Following ft. Jerry Parker, Founder of Chesapeake Capital
Strict Adherence
- Jerry Parker adhered more strictly to trend following than other turtles.
- He emphasizes the philosophical and mathematical foundations of the turtle program.
Experimentation and Reversal
- After 10 years of success, Chesapeake experimented with profit objectives and dynamic position sizing.
- This led to unexpected poor performance, prompting a return to classic trend following.
Long-Term View
- Poor performance in the late 90s led Chesapeake to adopt a longer-term outlook.
- Weekly charts revealed significant long-term trends previously missed with shorter-term analysis.
Jerry Parker, Founder of Chesapeake Capital is perhaps the most successful of the famous group of Turtles, and today we discuss what he has learned from his 40+ years love affair with Trend Following, and how he has evolved his CTA program. We debate the challenges of using the Sharpe Ratio and what improvement really look like, how he uses volatility in his trend following process and the conflicts that can arise when working with clients. We also find out why Jerry believes you can be a good manager without using stops even if this is not how he does it, why he believes in trend following plus nothing, why he felt he had no choice than to launch an ETF with that name and much more.
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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
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Learn more about Chesapeake Capital.
Episode Timestamps:
02:58 - Introduction to Chesapeake Capital
07:02 - Jerry's key trend following learnings
12:54 - Jerry's investment philosophy
17:02 - Being evolutionary without too much tinkering
22:09 - Advice on running a trend following program
26:48 - Their process for selecting parameters
32:15 - What does an improvement look like...if not a higher Sharpe?
39:25 - The role of volatility in the trend following process
44:41 - The challenges of working with clients
48:51 - What if everyone was a trend follower?
54:21 - Can you be a good manager without using stops?
57:05 - Why are the other firms "wrong"?
01:04:33 - Trend following disagreements
01:06:42 - Excitements for the future
01:08:23 - Thanks for listening
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