Lasertrader's Place

A Potpourri Of Trade Ideas and Setups

A Word Of Caution

Regarding New Managed Funds from Dr. Thomas Carr aka Dr. Stoxx at Befriend The Trend Trading

I just received an email from Dr. Thomas Carr at Befriend The Trend Trading, LLC ( Befreindthetrend.com ) announcing 2 new Managed Portfolios to be launched in 2012. Dr. Thomas Carr also refers to himself as Dr Stoxx. If you stumble upon this page I am hoping that you are doing due diligence before you decide to entrust Dr. Carr with your money.

I have not seen him mention his previous Fund that he closed down in 2009. Please be sure to ask him for a complete set of records showing the performance of that fund. I had a relative that was invested in the fund and in less than 1 year Dr. Carr managed to lose 70% of the assetts of the fund and then close it and send out what was left to the investors.  I personally do not believe a professional fund manager could ever let a fund lose 70% of the value without going to cash. Below is the text of an email I received on 12/28/2009 in response to my asking Dr. Carr what had happened. I have also added at the bottom of this page a copy of the announcement of the new funds. Please do your own due diligence before investing in what he is offering. 

Email Dated December 28, 2009 from Tom Carr to me:

Hi Bruce,

Thank you for your recent note. I fully understand your disappointment in
the fund’s performance, especially in 2008/09 before we closed it. We
lost money too which, as a young family trying to get out of debt, we
could hardly afford to lose.

The problems began in the spring of 2008 when I teamed up with an
investment research team to build trading systems based on both
fundamentals and technicals. Their initial success inspired me to move
much of the fund into these systems. Then the market crashed, which I did
not see coming, bringing the fund down with it.

At that point I switched over to several “micro-trend” strategies I had
developed. These proved profitable with the high market volatility but
once that dried up in early 2009, they stopped working. Our losses were
compounded by a large position in SHY, the short-term treasuries ETF,
which I thought would be a safe place to put cash. It wasn’t (no bids at
auction).

In early July (2009) I sent a note to subscribers in which I outlined
these developments (previous notes kept investors informed along the way)
and described our new ETF-Reversal strategy. At that point the ETF system
was doing well and I was hopeful for more of the same. Then the system
went into a severe drawdown, along with a number of our Trend Trade picks.
Hopeful for a turnaround, I was not quick enough to reduce our position
size, a poor choice on my part. We closed the fund the next month and
returned all funds including management and accounting fees.

In short, my mistakes lay in being overly optimistic about my own trading
systems. I should have been more defensive against the inevitable
draw-downs all systems experience. The truth is that I traded horribly
through the market crash and rebound and did not acknowledge that reality
early enough. I was not quick enough to change to a quickly changing
market. I should have done more to curb my optimism at a time when things
were getting tough.

I hope this note answers at least some of your concerns. If it would
help, I can send you our trading record with lists of all closed trades.
I’m back in my office on 1/12/2010 and can send you the spreads then (by
email).

Regards, Tom Carr.

Annoucement of the 2 New Managed Funds Received November 26, 2011

http://consumerthoughts.weebly.com/

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3 Responses to “A Word Of Caution”

  1. Afamiii said

    1. It is easier to research all the trading methodologies and write about them than to successfully trade money (I know I’ve been through the ups, downs and sideways).
    2. At least he had the decency and honesty to acknowledge his mistakes. This is a good sign, because it creates the type of humility that is necessary to be a trader.
    3. Dr Carr does not have a good enough grasp or risk management (or does not have the psychological/emotional skills to implement good risk management skills).
    a. His book Trend Trading for a Living does not go into much depth in terms of risk management (a red flag, given that it is actually the most important element of successful trading – more important than both screens and entries.
    b. If he did he would not have lost 70% of his fund. Even in his book (Ch 3 – Developing a Traders Mind) he talks about Keeping losses small and never overtade. Implementing just these two rules should have kept him to below 25% drawdown over 2008.
    4. Most other trend following systems performed well in 2008/09, so I can’t imagine what he was doing.

  2. Harry Who said

    I was a member of Befriend the Trend for 6 months now and when my membership was up on August 16 on Saturday, my credit card was debited on Monday August 18. So I emailed him on August 20 to ask to terminate my membership and ask for the refund because I was only 2 days late. I only have 1 email back from him informing me to cancel any recurring paypal transaction for the future billing. I asked him to apply a refund for the unused 88 days of the membership. So far I have written him 4 email but never heard back. I called the number listed in the Credit Card transaction, which 330 408 3052 is not even a valid number. So my advice to everyone, think twice or three times before subscribing to his newsletter. Heck, just don’t do it.

  3. Phil said

    Wow! That’s an eye opener! You would never get the impression anything was ever less than rosy after looking at his website. While I appreciate Dr. Carr’s honesty in this letter, I won’t be wasting my time reading his books and testing his strategies. Thank you for sharing this letter!

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