• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 4. Big Events in Trend Following > Event #1: Stock Market Bubble

Event #1: Stock Market Bubble

The period from 1999–2002 was littered with volatile up-and-down markets. While the prime story for that three-year period was the NASDAQ meltdown, there were several subplots, ranging from September 11 to Enron to Trend Following drawdowns and their subsequent recoveries to new highs.

Conventional capital market theory is based on a linear view of the world, one in which investors have rational expectations; they adjust immediately to information about the markets and behave as if they know precisely how the structure of the economy works. Markets are highly efficient, but not perfectly so. Inefficiencies are inherent in the economy or in the structure of markets themselves . . . We believe inefficiencies in markets can be exploited through a combination of trend detection and risk management.

John W. Henry & Company, Inc.[10]


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint