Following Hedge Fund Gurus with Trend Following

Many well known Hedge funds have been very busy bargain hunting and buying all types of oil stocks. Many of these shares have fallen due to BP’s oil rig disaster. Some of the Hedge Fund Gurus that have been buying include Carl Icahn, Jeff Vinik, David Einhorn and Eric Mindich. These guys have been around a long time and have been very successful. However they can be wrong and have losses. Possibly they can be trying to catch a falling knife as cheap can get cheaper. The fact is that Oil stocks have been one of the worst performers compared to other sector shares.

My simple suggestion is Hedge Fund Gurus are Gurus because they have built a long term impressive record. That alone does not mean they are always right and that they can not lose money. A simple plan is to read the 13F of Hedge Fund Gurus you believe in & look what they are making substantial bets. With these substantial bets… simply put a trend following system as an overlay. Any good trend following system will tell you when to buy…how much to buy and when to exit either with a loss or a profit. The idea is you can build a possible universe of potential ideas but let the price action dictate your buys and sells. This way you are not buying blind and you are covering your downside.

Have a plan and follow it with the utmost of Discipline.

Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money

Share and Enjoy: