Book Review of Dual Momentum.
‘Complex is hollow and Simple is DEEP’.
Its not often that you can give a 5* rating to a book. But this one deserves it and I will tell you Y. I follow a simple heuristic in life, which is, ‘Complex is hollow and Simple is DEEP’.
Gary through his extensive research has put across a Simple system that works, period. There are no macro analyses, no intellectual masturbation to look intelligent, no gibberish, but instead just one parameter of a 12 month look back period. This ensures that there is no over optimization or curve fitting either.
Gary in his book also explained beautifully how behavior biases ensure that this anomaly would remain in the system as long as humans act the way they do. As Dan Arielly says, Its not that we are irrational, but we are predictably irrational.
I did not take the book at its face value and so I ran back test on 02 asset classes in India (Nifty and Gold bees) The results were astounding. The combination of relative strength and Absolute momentum is potent.
While relative momentum ensures that you are in a right asset class, Absolute momentum ensures that you do not suffer extreme draw downs that buy and hold turkeys suffer from.
I went on to interview Mr Gary Antonacci after being impressed by his book to clarify my doubts and came out totally impressed by his clarity of thought and in-depth research. Here is the link for that
Explaining stuff in simple language is the hallmark of a genius. This book is tight slap on charade run by a lot of mutual funds charging a rip-off fees for not beating their benchmark index.
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