In The Australian Financial Review I argue that the best traders make money through consistent short-term investing rather than via irregular long-term bets given volatility and uncertainty scale with time and in this context reflect on the incredible net returns produced by the world's greatest investor, Renaissance Technologies, which have bested most folks' favourite Warren Buffett by 2.4 times annually over the last 29 years with much lower downside risk. Also check out my chart of their year-on-year performance below. Excerpt enclosed: "Whereas I can predict with certainty what you will be doing in the next 30 seconds---reading this enthralling column!---I have scant hope of divining your decisions in 30 minutes or 3 hours. The probability of the US Federal Reserve raising rates in December oscillated wildly like a yo-yo all year, dropping to 16 per cent the day before Donald Trump was elected president. Yet within 24 hours of Thursday's Fed meeting traders had correctly handicapped a hike as a 100 per cent certainty." Free (VIEW LINK)
Christopher Joye is Co-Chief Investment Officer of Coolabah Capital Investments, which is a leading active credit manager that runs over $2.2 billion in short-term fixed-income strategies. He is also a Contributing Editor with The AFR.