Show Notes
Niels Kaastrup-Larsen and Richard Brennan explore what the science of complex adaptive systems can teach us about markets and trend following. Drawing on research from the Santa Fe Institute, they examine why markets may be better understood as evolving systems shaped by the participants within them rather than machines moving toward equilibrium. They discuss reflexivity, increasing returns and how trends can begin to reinforce themselves, before asking what this means for systematic investors. Along the way, Richard explains why backtests are evidence rather than promises, why taking profits too early can be costly, and why responding to markets may ultimately matter more than predicting them. ----- 50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE -----
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website. IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here. And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here. Learn more about the Trend Barometer here. Send your questions to [email protected] And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast. Follow Rich on Twitter. Episode TimeStamps: 00:00 - Why trend following’s edge may have moved rather than disappeared 03:26 - What three years of research revealed about trend following 06:50 - Why big trends and outliers are structural features of markets 11:35 - Trend following performance and what’s moving markets 16:49 - Should trend followers ever take profits early? 21:03 - What the Santa Fe Institute can teach us about markets 25:51 - Why markets are complex adaptive systems 29:46 - Reflexivity and how investors help create market outcomes 35:18 - Why equilibrium may be the wrong way to think about markets 40:22 - Mean reversion, positive feedback and why trends persist 42:55 - Increasing returns and the lessons of VHS versus Betamax 50:01 - How market movements begin to feed on themselves 54:11 - Why trend following emerged inside an artificial stock market 58:20 - How every system eventually gets gamed 01:01:47 - What backtests can and cannot tell us about the future 01:08:31 - How trend followers prepare for a future they cannot predict Copyright © 2025 – CMC AG – All Rights Reserved ---- PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey: 1. eBooks that cover key topics that you need to know about In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here 2. Daily Trend Barometer and Market Score One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here 3. Other Resources that can help you And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here Privacy Policy Disclaimer
More from Top Traders Unplugged
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