SI164: Compounding - The 8th Wonder of the World ft. Richard Brennan

This week, Richard Brennan joins us on the show to discuss how people can benefit from the effects of compounding while others end up a paying a price for it. We also cover some thoughts on ‘path dependency,' why those invested in stocks should diversify using Trend Following strategies, why stable returns can only be correctly judged over long time periods, how to analyse fund performance without being influenced by the effects of compounding, some thoughts on what is known as ‘geometric returns’, and we explain the term ‘ergodicity’.-----EXCEPTIONAL RESOURCE: Find Out How to Build a Safer & Better Performing Portfolio using this FREE NEW Portfolio Builder ToolIn this episode, we discuss:How to stay on the right side of the effects of compoundingHow many strategies can be limited by the make-up of their previous versionsThe profitable & negative correlation of Trend Following to equities when stocks are fallingThe need to zoom-out when judging performanceThe terms 'ergodicity' and 'path dependency'-----Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.Learn more about the Trend Barometer here.Send your questions to [email protected] please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.Follow Rich on Twitter.Episode TimeStamps:00:00 – Intro01:37 – A Thank you to Shane, our website developer, for his great work in creating the new Top Traders Unplugged website. We hope you all enjoy the new user interface02:09 – A huge thank you to listeners of the show, such as Dave W, for leaving your 5-star reviews on iTunes, and feel free to share this link with 3 of your like-minded friends: