Well if you want to understand a concept that helps to define what type of risk-taker you are and clear up any mistaken notion of what Crisis Alpha means…..then why not go to the fountain-head.
Those in the know in the trend following camp were able to understand the nuances in the term devised called ‘crisis alpha’, but it appears to have been misused by those who took the statement as a literal one signifying that diversified trend following would always be a perfect hedge for the traditional 60:40 portfolio.
If there was a term that singularly describes what we as trend followers and momentum chasers do who follow price as opposed to predict a future price….then divergence would best sum it up.
Thanks very much for Niels bringing back the majestic and very clever Kathryn Kaminski (or who some of us trend following groupies cheekily refer to as “Katy K”) to clear up any confusion.
Trade well and prosper