A few others have reviewed this too, but I thought I'd put mine up to.
UNHOLY GRAILS: Because life’s too short to buy and hold…
Many investors relied on the advice of their financial planners and advisors using the “buy and hold” approach and were burnt badly by the GFC. For some, this meant losing half of their investment near retirement age. In Unholy Grails the reader is to introduced to a more ‘active’ approach to investing called momentum investing (also known as trend following); a simple strategy which Nick claims can offer significantly improved risk adjusted returns over the traditional “buy and hold” method.
Whilst trend following may not be well known by the vast majority of investors, writing about trend following isn’t new. In fact there are quite a few books on the subject. The philosophy of trend following has been covered before, and evidence is shown through the records of successful trend followers. The better books include risk management, as well as offer ideas for the reader to implement. But very rarely is a practical, well-defined system ever offered to the reader and statistically evaluated. This is the gap filled by Unholy Grails.
Nick takes eight momentum investing strategies (some well-known, others not) and puts them to the test. Each strategy is tested using past data, and the results are broken down into individual elements to evaluate the strategy’s strengths and weaknesses. Areas for improvement for each strategy are offered (such as how to protect capital during bear markets); while at the same time ensuring the strategy remains robust.
The greatest evidence comes from the Nick’s own momentum investing strategy, where proof of real time results are delivered from the strategy Nick and his clients have traded since 2006. Commendably, Nick does not use this as an opportunity to promote or sell his services to the reader. It is there to deliver evidence that momentum investing works. The statistics and analysis presented for each strategy not only provide proof of concept to the reader, but will also assist readers who currently trade their own systems to verify and improve their systems.
In the section called “Interviews with the Experts” Nick interviews four successful momentum investors about their strategies, their journey to momentum investing, and some of the challenges they’ve had along the way. The interview with Gary Scott really stands out. Gary he had an extremely long journey and many setbacks before finally discovering momentum investing. His perseverance is extremely inspiring. Admittedly, I doubt I would have persevered for as long as Gary; however it makes me extremely grateful for the position I now find myself in, and knowing what I can do with knowledge I've gained. The book concludes with a section called “Overcoming Yourself” which aims to help the reader stick to their strategy, and explains how emotions can hinder a momentum investor’s profits.
Unholy Grails has something to offer to both those new to momentum investing and those familiar with it. Those new to momentum investing will have a reasonably steep, yet very attainable, learning curve. There is nothing in this book that is difficult to learn, although some of the concepts may be difficult to accept at first if all you’ve known is “buy and hold” (although it may be a little easier to accept after losing half your capital during the GFC). Those with an understanding with momentum investing will be able to implement what they have learned to their own strategies, and benefit greatly from the interviews of those who have gone before them.
# Disclaimer: I am a subscriber to The Chartist and have been trading Nick Radge’s “Growth Portfolio” for almost 2 years. During that time, the XAOA is down 8% and my trading account is up 46%.