R. Jerry Parker, Jr.
Chesapeake Capital Corporation
Jerry Parker, the most successful of the turtles, recently spoke to a crowd of non-believers at the annual Futures and Options Expo in Chicago. The term non-believers is used since many in the modest sized audience seemed intent on stumping the laid back Parker with inane questions and general disbelief in trend following.
Parker spoke at length about the dangers of a buy and hold mentality stating the strategy of buy and hold is bad. “Hold for what?”, he said.
He then offered that a key to successful traders is their ability to leverage investments. “Many [traders] are too conservative in their willingness to leverage.” Parker painted a picture where risk for many is simply a term defined by belief rather than his view of risk which is measured in concrete terms.
The quant jocks should take note of Parker’s self-deprecating tone in describing the success of his firm. He explained that he is more comfortable trading through a system than he would be if he was picking individual moves:
I would hate it if the success of Chesapeake was based on my being some great genius. It’s the system that wins. Fundamental economics are nice but useless in trading. True fundamentals are always unknown. Our system allows for no intellectual capability.
In response to questions concerning his opinion on where individual markets may be headed:
I don’t know nor do I care. The system that we use at Chesapeake is about the market knowing where it’s going.
Most of the skeptics in the audience simply seemed to not understand these statements or were plain ignorant. His bottom line summation:
Trend following with rules works.
Side Bar from Financial Trader Magazine
How does a trader who earns $35 million spend his money? How about making America better! For Jerry Parker, the unpretentious super trader from Lynchburg, Va., the most important work occurs around the kitchen table. That’s where Parker’s wife, a certified teacher, home schools the family’s three children. I was a small town person and Rich Dennis rescued me from leading a normal life, says Parker. A Turtle who trained under Dennis and founded Chesapeake Capital Management in 1988. Since technical trend following follows its models [Parker states], we’re not really interested in people who are experts at the French stock markets or German bond markets. It doesn’t take a huge monster infrastructure – not Harvard MBAs and people from Goldman Sachs.
More info here.