If we carry this line of argument to its logical conclusion, the meaning of life consists of the flaws in one’s conceptions and what one does about them. Life can be seen as a fertile fallacy.
The trouble with institutional investors is that their performance is usually measured relative to their peer group and not by an absolute yardstick. This makes them trend followers by definition.
When a long-term trend loses it’s momentum, short-term volatility tends to rise. It is easy to see why that should be so: the trend-following crowd is disoriented.
