WHO ARE YOU? FOX OR HEDGEHOG?

The fox and the hedgehog is an ancient fable. Originally by Aesop was fox and cat, but in the anglo saxon’s heritage is more common as the fox and the hedgehog. The story is that how many tricks they have if the hunter comes with their dogs. The fox is so proud of the its many tricks and the hedgehog has only one simple trick. Finally, the hunter and the dogs appear and only the hedgehog survive with his simple trick and the fox dies because he is not able to use any of his tricks. The moral that in time of danger one trick proves more efficient than many options. The fox knows many things the hedgehog only knows one great thing and beats the fox.

In the investment business there are many super intelligent, well skilled, Harvard Business School educated doctors and MBA fund managers. They have thousands of skills with brilliant ideas how the market works, they understand the charts, the inflation waves, unemployment cycles, etc. They know everything. They are the fox. And, there are the hedgehogs like Warren Buffett, John Bogel, Martin Zweig, Peter Lynch, Jesse Livermore, etc. They only know one thing, but perfectly. You have to have a position in trend and hold it forever. They are the hedgehogs.

I am absolutely sure about they will survive and foxes won’t. Why? Because their system is simple and one dimensional and understand the infinity of market’s structure.

I am much less intelligent than any great guys at Morgan Stanley or Deutsche Bank, they know far more than I could ever imagine. They have huge analysis department, huge marketing budget and department and many wiles. But, and here comes the big but I know one thing - “OWN THE MARKET IN THE TREND”. I am sure about only one thing as the great heroes. Namely the good trader’s best friend is the time and if occurs the trend don’t trade both side of the market. If you want to be a hedgehog and beat the market in each year, you have to understand the simplicity the market and don’t create super complicated trading systems because it won’t work. There is no doubt.

Be hedgehog and you will win. The poor fox is the yesterday and the hedgehog is the tomorrow.

The BFM Assets Team.