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Futures Magazine on "Top Trader All Stars of 2003"
Gerstein Scores Again

Mar 01, 2004

Though much time has passed, Red Oak's original and only product—the Discretionary Trading Program—is still going strong. The following comments are excerpted from the March 2004 Futures Magazine. Reporter Daniel P. Collins speaks with Red Oak Commodity Advisors co-founder Gary Gerstein and notes “Gerstein scores again.”

Futures: “The best performers of the year were CTAs with long track records. . . . They proved the adage of sticking with what works. . . . What worked in 2003 was a diversified portfolio of markets being traded from a long-term perspective with solid risk management procedures.”

Gerstein: “When potential investors make the choice between someone who is batting 1.000 over three years as opposed to someone batting 0.400 over 15 years, there is a tendency to go with the person who batted 1.000. The number of people who can bat 0.400 over a 15 year period, you can count on one hand. They are not infallible; they are just very good.”

Futures: “Being discretionary allowed Red Oak to take advantage of large trends but also gave it the ability to get out when the getting was good . . . .”

Gerstein: “The trick to fundamental analysis—given the fact that everyone knows the basic fundamentals—is anticipating what fundamentals will look like three, six and twelve months in the future and the effect that price has on supply. You need to give a great deal of weight to the fact that high prices set in motion forces to bring about increases in supply and reductions in demand that you can’t see but will show up in the future. You look at this known information which everyone has and then you anticipate what effect this information is going to have on the flow of future supply and demand.”

Futures: “Gerstein doesn’t just depend on being right all the time, he likes to give himself an edge. Red Oak plays close attention to the cost of carry. If the front month price of a commodity is at a significant discount to further out months that will add more credence to going short that commodity, or Gerstein may hold off on a buy, even if his analysis calls for a long position.”

Gerstein: “We want to be long things in backwardation [back months are lower than front months] and short things in contango [back is higher than the front].”

Futures: “Seeing that Red Oak is a long-term trader, the effects of cost of carry can play a significant role in profits. Gerstein estimates this adds about 3% to performance per year.”

This transcript includes the opinions of investment personnel of Red Oak. While the firm’s investment strategy and philosophy is implemented to generate positive results for its clients, there is always a risk of loss in trading commodity futures. Only risk capital should be used to make such investments.   

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This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. CTA database
This fund was ranked based on the data in BarclayHedge's. CTA database


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This fund was ranked based on the data in BarclayHedge's. CTA database

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This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. CTA database

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This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. CTA database

2010 Awards

This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. CTA database

2009 Awards

This fund was ranked based on the data in BarclayHedge's. CTA database
This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. CTA database
This fund was ranked based on the data in BarclayHedge's. CTA database
This fund was ranked based on the data in BarclayHedge's. Managed Futures Database
This fund was ranked based on the data in BarclayHedge's. CTA database
This fund was ranked based on the data in BarclayHedge's. Managed Futures Database

2008 Awards

This fund was ranked based on the data in BarclayHedge's. CTA database
This fund was ranked based on the data in BarclayHedge's. CTA database
This fund was ranked based on the data in BarclayHedge's. Managed Futures Database

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Copyright © year Red Oak Commodity Advisors, Inc.

Past performance is not necessarily indicative of future results. The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

 

Risk Disclosure Statement

Qualified Eligible Person Status. Futures trading involves a high degree of risk. Clients should only use risk capital to invest. Clients are only accepted if they satisfy the requirements in order to be deemed a “Qualified Eligible Person” as defined in Commodity Futures Trading Commission (“CFTC”) Regulation 4.7. By checking the box below, I certify that I am indeed a “Qualified Eligible Person” as defined in CFTC Regulation 4.7.