The following excerpt shows just how much wealth can be generated by trading trends:
BOSTON (AP) — In a $700 million deal that would double the record price for a baseball team, the limited partners of the Boston Red Sox voted unanimously Thursday to sell the franchise to a group led by Florida Marlins owner John Henry and former San Diego Padres owner Tom Werner…Henry, a math junkie and former commodities trader who bought the Florida Marlins from H. Wayne Huizenga in 1999 for $150 million.
John W. Henry is one of the great trend followers of all time. The excerpt above states he is a former trader — he never stopped!
How did Henry make the money needed to buy a pro baseball team? Read:
The $700 million Red Sox purchase is the right lens through which to understand what systematic trend following can produce over a career. Henry opened his first trading account with $16,000. He built that account, through disciplined application of trend following rules across global futures markets over decades, into the capital base that allowed him to buy the Florida Marlins for $150 million in 1999 and the Boston Red Sox for $700 million in 2002. The AP description of him as a “math junkie and former commodities trader” understates what he actually did. He built one of the most successful systematic trading operations in the history of managed futures, generating correlated returns with other major trend followers across market cycles that spanned the full range of market environments from trending to choppy, from crises to booms.
The AP’s phrase “former trader” is worth noting because Henry himself would not accept it. He never stopped trading. He applied the same systematic approach to his capital base throughout the period when he was buying sports franchises and media properties. The wealth that funded those acquisitions was not a one-time windfall from a lucky trade. It was the compound result of decades of consistent systematic execution. That is what trend following produces when applied with the discipline and patience the approach requires.
For the full profile of Henry’s trading career, his methods, and the documented performance that produced this wealth, see the John W. Henry trader profile.
Frequently Asked Questions
How did John W. Henry make the money to buy the Boston Red Sox?
Through decades of systematic trend following across global futures markets. Henry opened his first trading account with $16,000 and built it, through disciplined application of trend following rules, into one of the largest systematic trading operations in the managed futures industry. The capital generated funded his purchase of the Florida Marlins in 1999 and the Boston Red Sox in 2002.
Why does the AP call Henry a “former commodities trader” if he never stopped?
Because his public profile shifted toward sports franchise ownership and the trading operation became less visible in media coverage. Henry continued running JWM Associates, his systematic trading firm, throughout the period of the baseball team acquisitions. The trading did not stop. The press coverage moved to the more visible asset.
What does the Red Sox purchase demonstrate about trend following?
That the compound returns from consistent systematic trend following, applied with discipline across a full career, can produce wealth of the magnitude required to acquire major sports franchises. The $700 million transaction is the end result of a process that started with $16,000 and a set of trend following rules applied consistently over decades.
Trend Following Systems
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