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.I just think there was.alle-giance to Rich.Dennis s own take on the selling of rules was tight-lipped.He madeit clear, however, that a few Turtles had failed:  There were one or two[Turtles] who will remain nameless.The majority was exemplary. 14He may have been diplomatic, but his longtime friend and fellowtrader Tom Willis, who was and is no fan of Sands, was not:  I ve alwaysthought that Rich exemplifies the Christian attitude and behaviormore than most Christians I know.He probably doesn t hold a grudgeagainst Russell.Dennis Retires AgainSoon after the Sands dustup, Dennis staged another remarkable come-back.It would take him through most of the 1990s.While Dennis didnot reveal his exact trading systems to the public, his performance datahad earmarks of trend-following trading.After returning in 1994, hiscompounded annual rate of return was approximately plus 63 percentthrough September 1998.For two years in a row, 1995 (108.9%) and1996 (112.7%), Dennis had triple-digit returns.15He was still the same high-risk, high-reward trader he had alwaysbeen.It was his ticket to the Hall of Fame and his Achilles heel rolledinto one.However, this was now the time of Bill Clinton and the dot-com bubble.It was hard to get noticed even with his great perfor-mance.On top of that, many investors were gun-shy about another Denniscomeback.In an effort to allay client fears, he assured everyone thathis infamous discretion, his inability to not personally interfere with hisown rules, had been eliminated.He said the computer was his newfriend:  Given what the computer can do today compared with whatDennis Comes Back to the Game 151it could do only a few years ago, I just can t see how any human couldpossibly compete on a level field with a well-designed computerizedset of systems. 16The term  computer as a marketing hook was old news.In someways, Dennis was a technophobe in the middle of the Internet revolu-tion (he always said he could not program).Maybe the over-sixty crowdbought in, but no one else on Wall Street breathed a huge sigh of reliefjust because he d used the word  computer. 17Worse yet, Dennis s critics thought that his strict mechanical tradingformula was just a marketing ploy.Dennis rebutted them by saying hehad put in checks and balances.He struck a confident tone:  At theend of the day, a trader has to go with what works.I know that me-chanical systems work best, and therefore I am quite comfortable thatour strategies will continue to be successful. 18There was a difference in Dennis s trading strategy this time around:He was religiously applying that same discipline he had taught his stu-dents.For example, he was right there in August of 1998 making bigmoney during one of the most historic months on Wall Street.He, likeall trend followers, made a fortune in August. Between the ruble, Yelt-sin, and the deep blue sea, it s been pretty crazy, said Dennis with ahint of glee.He was up 13.5 percent in August 1998, giving him a year-to-date return of about 45 percent.19Other traders were sinking like stones in the zero-sum market gameat the same moment Dennis was flying high.Wall Street s darling,Long Term Capital Management s (LTCM), for example, imploded atthe same time.LTCM lost billions.Chief Executive John W.Meri-wether, the legendary former Salomon Brothers bond trader, said in aletter to investors at the time,  August (1998) was very painful for all ofus. 20 LTCM and its two Nobel laureates, Robert H.Merton and My-ron S.Scholes, padded the pockets of Dennis and other trend-followingtraders, including the Turtles.It was a high point for Dennis s trading return, because within a fewyears of that historic zero-sum win, he was out of the game again.OnSeptember 29, 2000, Dennis Trading Group ceased trading and liqui-dated customer accounts.Burt Kozloff, an investor in Dennis s currentfund, laid out the painful truth:  Dennis Trading Group was 50%down in June but then made a slight recovery in July.But we finally152 TheCompleteTurtleTraderbroke through the 50% mark to 52%.You still can trade and try torecover when you re down 50%, but you run the risk of falling to 60%or 70%, and there s no turning back from there. 21While it was no solace for Richard Dennis, the moment when cli-ents pulled funds from him in the fall of 2000 was a bottom for trend-following traders.In the following twelve months, returns for many ofhis trading peers zoomed up 100 percent or more in performance.Dennis s clients had panicked at the bottom and paid dearly.Dennis was once again out of public money management.Mean-while, his conservative Republican student Jerry Parker was rising evenfarther to the top in both the trading and political worlds.His storywould take the Turtles and their philosophy to a whole new level [ Pobierz całość w formacie PDF ]