Jerry Parker and Michael Covel Discuss ETF with Blueprint

Jerry Parker, legendary Turtle Trader and Portfolio Manager of the Blueprint Chesapeake Multi-Asset Trend ETF (ticker: TFPN) appeared on Michael Covel’s Trend Following Radio podcast. The pair discussed the nuances of trend following, Jerry’s start in the Turtle Trading program and continued passion for trend following, hunting outliers, and the new TFPN ETF that is sub-advised by Jerry’s Chesapeake Capital Corporation and Blueprint Fund Management.

Throughout the conversation, Jerry noted some of the drawbacks associated with many traditional liquid and alternative strategies available to financial advisors today. As a next-generation liquid alt, TFPN intends to solve those challenges. The ETF is constructed in a way that can address concerns about portfolio drag during bull markets, highly correlated return streams, tax efficiency, investor behavior, and overall expenses.

Below are some excerpts from the full interview.

The Role of Simplicity in Sophisticated Trend Following

skip to 13:06 in the audio below

Michael: “The funny thing is, if we listen to any of the voices from all different walks of life in our lifetime or before us – people like the physicist Richard Feynman or Steve Jobs of Apple – all you have to do is listen for a few minutes and all these guys say the same thing: simplicity, simplicity. Not complication. Simplicity. Keep it simple.”

Jerry: “Today’s managed futures CTAs, they talk a big game. The next paragraph will be something about how it’s not that simple. I think a lot of it is defending the incentive fee.”

skip to 14:30 in the audio below

Michael: “There’s a lot of complex philosophical thought put into a simple system. These simple systems are doing some very complex things. Is that a fair way to say it?”

Jerry: “I think so. I haven’t seen better performance than – I call it one entry, one exit stop loss. I haven’t seen materially better performance. If they all had this amazing extra performance, I’d probably just keep my mouth shut, why wouldn’t I? Why would I keep bringing it up? But I haven’t seen much of that.”

The Value of Massive Global Flexibility

skip to 24:18 in the audio below

Michael: “I still think this concept of, ‘My year can be made by anything,’ is a fascinating concept. I think I could sit there for like hours and try to explain to somebody this idea. Even smart people, they just kind of glaze over. There’s something about the idea, that you are agnostic to where the profits come from, like there’s an emotional attachment: ‘I must get my profits from x, y, z.’ And then if you tell people, ‘Well I don’t care where the profits come from,’ it’s kind of like they almost think I’m playing with them or I’m stupid or something.”

Jerry: “That’s right. And it can come from anywhere. We’re bombarded all the time by stocks are superior, stocks are the core, stocks have the better trends. And I don’t believe any of that. So, there will be every now and then a certain sector that has the best performance, and it could be for a long period of time. And stocks have their day in the sun probably. And they’re still great. I trade a lot of them, and so I’m always very happy. I’m never rooting against stocks or trends in any market. But it is true that if you’re hunting outliers, as trend following kind of does, you can get that big, huge outlier from anything.”

Overview of TFPN ETF

skip to 44:14 in the audio below

Jerry: “We’re going to come out with this pure trend following strategy that trades 300 markets, and it’s going to have a fair amount of stocks in there to get the potential outliers and to participate. We don’t want to go through another 10-year period, a lost decade, for trend following – primarily probably because CTAs weren’t long the best trending sector, which was the stocks. And these indices, you don’t get much of a chance to get a big outlier. So, we’re not going to let that happen again. And see, we’ll have fair representation for what trend following can do when we give it all the advantages of those single stocks – long and short.”