Jerry Parker of Chesapeake Capital - The Most Successful Turtle Trader: Lessons From a Career of Systematic Investing

Episode • Sep 17, 2024 • 1h 6m

Today, Rusty and Robyn are joined by Jerry Parker, CEO of Chesapeake Capital. Mr. Parker is the Chairman and Chief Executive Officer of Chesapeake and Chesapeake Holding Company. Mr. Parker received a Bachelor of Science degree in Commerce, with an emphasis in Accounting, from the University of Virginia in 1980. Mr. Parker started his trading career in 1983 as an exempt commodity trading advisor for Mr. Richard J. Dennis, in his “Turtle” training program. My. Parker, a Portfolio Manager, has overseen Chesapeake’s operations and its trading since its inception in February 1988.

Key Takeaways

[03:36] - What drew Jerry to investing in the first place? Also, learn more about his career as the Founder of Chesapeake Capital.
[05:46] - Learn more about Chesapeake Capital, what sets them apart as a firm and what has been key to their success.
[07:53] - Learn more about how Jerry got involved with “Turtle Trading” and more detail about the experiment.
[13:15] - How does Jerry define systematic investing and why does he think this approach has worked for him for so long?
[15:03] - What was it like working with William Eckhart and Richard Dennis?
[19:03] - Learn about the ETFs that Jerry manages for Chesapeake and how they differ from other trend following ETFs.
[23:22] - What does Jerry think about the main differences between managing money in a Hedge Fund structure vs. an ETF structure and what made him move from one to the other?
[25:21] - Is it true that commodities and currencies are markets that have a tendency to trend, but equities and fixed income are not? Also, what are the benefits of combining a multi-asset trend strategy with equities?
[28:27] - How does Jerry define trend and how does it differ from momentum?
[31:47] - Where does Jerry think trend following fits alongside fundamental investments in a portfolio?
[36:47] - If Jerry was responsible for due diligence and had to select a portfolio manager who used trend following, what would he look for in that manager and that strategy?
[39:12] - What does Jerry think about the popularity of trend replication strategies?
[42:56] - Does Jerry find that there is more interest in trend following strategies from RIAs than from other financial advisors?
[44:51] - When Jerry is considering how to invest his personal wealth, what allocations guidelines or principles does he follow?
[47:42] - What have been Jerry’s best and worst trades and what did he learn from them?
[52:13] - What is Jerry’s favorite investment idea currently?

Quotes

[13:15] - “I think [trend following] works for me because it suits my personality to follow the rules…To have a backtest to at least show me, minimally, that this has at least happened in the past…it may not be great in the future, but it has at least done well in the past…but you can have a little bit of confidence going forward with these rules. I think it works for everyone, if you are willing to submit yourself to rules and not be upset or jealous when people are doing better, seemingly, by not using rules…I think over time this type of strategy will work out, and win out, eventually, but not on a day-to-day basis.” ~ Jerry Parker

[19:24] - “I look at our trend following as similar to the S&P. It’s just pure beta. It’s just pure trend. It’s hard to beat, it’s hard for active managers to beat the S&P. I think it’s hard…to beat plain old trend following…It’s [also] rare, I don’t know any other CTAs who will admit that it’s trend following plus nothing, we don’t do anything except trend following, and it’s pretty much the same rules I learned in 1983 with a few changes.” ~ Jerry Parker

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Disclosure(s) - Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

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