Learning From the Masters — David Harding

Another trend following master, who believes the markets cannot be predicted, is David Harding “The Wizard of Winton“.  If you do an internet search on David Harding you’ll not find a great deal of information.  Michael Covel “Trend Following” one of the few free sources of information.

From Michael’s “Trend Following” book – At the end of the day, perhaps the best lessons I took away from Harding came from his original marketing materials titled “The Winton Papers.” His explanation about human decision making should be absorbed by everyone before they ever put a dollar to work in the markets:

“The aggregate effect of shared mental biases and imitation results in patterns of behavior, which while they are nonconsistent with Mr. Spock-like, rational decision making or with informational efficiency, are demonstrably systematic.  The market equivalent of these behavioral patterns is trending, whereby prices tend to move persistently in one direction or another in response to information.  The widespread adoption of investing fashions like indexation, introduces market mechanisms, which magnify herding behavior on a large scale.“

On May 19, 2008 Erin Burnett of CNBC interviewed David Harding in London.  The video is below.

Winning strategies, with David Harding, Winton Capital Management founder.

While certainly employing hundreds of mathematicians appears like an enormous advantage you must remember that Winton is trading hundreds of markets around the world and managing many billions of dollars that must be allocated in very fast moving markets.  You can probably enjoy similar performance on a much smaller scale.