Episode 12: Just the Turtles: February Review, Energy Breakouts & Myth Busting
Join Rich Brennan, Jerry Parker, and Adam Havryliv for Episode 12 of Turtle Talk. No guests this month, just the three turtles going deep.
In this episode:
Battle of the Trend Following Indexes – February 2026
Classic Trend Index up 5.3% for the month, delivering a strong 14.6% over the last quarter and 10.5% year to date. All trend following benchmarks posted positive results in February — a rare show of breadth across the entire systematic universe. The Classic Trend Index continues to separate from the pack, with results that reflect disciplined positioning built up over many months, not a forecast of what comes next.
👉 Full report: https://www.aussieturtles.com/battle-of-the-trend-following-indexes-february-2026/
What’s Moved the Needle
Jerry spotlights aluminium and bean oil — a reminder that the opportunity set for classic trend followers extends well beyond precious metals. Bean oil is outperforming almost everything else in the grain complex, and markets that look correlated on the surface can produce dramatically different moves when the conditions are right.
Adam brings the dramatic divergence between European and US natural gas — European gas up close to 100% in a matter of days on localised supply concerns tied to Russia and the Middle East, while US natural gas gave back its gains entirely. Brent crude breaks out above the 200-day moving average and pushes toward $114. A timely discussion on why correlations go out the window when supply chains are under stress — and why that’s an opportunity, not a problem, for those trading enough markets.
🐢 Turtle Tidbits – Deep Dives
Two meaty topics from Jerry and Adam:
Jerry on Diversification
Jerry unpacks a paper arguing that more concentrated portfolios — focused on financials, bonds, currencies and gold — deliver better crisis alpha during stock selloffs. His response: that’s the wrong objective. For classic trend followers, diversification isn’t about lowering volatility or providing crisis alpha protection. It’s about maximising the chance of catching outlier trades. The more markets you trade, the more opportunities you have to be in the right place when the big move comes. Trading fewer, more correlated markets to smooth the equity curve is solving for the wrong thing entirely.
Adam on Trend Following vs. Passive Long Equity
Equity markets are objectively expensive — the Buffett Indicator, Shiller CAPE, Price-to-Sales, and Yield Curve models are all flashing red. With energy prices exploding and a potential regime shift unfolding in the Middle East, Adam makes the case that the next several years could be very painful for passive index investors and very rewarding for classic trend followers. Drawing parallels to the 1973–74 oil crisis (S&P down 48%) and the 2022 episode, he argues that trend following doesn’t just survive these environments — it profits from the very drivers of the crisis, going long the assets that are appreciating and short the indices and bonds that are falling. And crucially, none of it relies on a forecast.
🔍 Myth Busters
Jerry tackles two of the most persistent misconceptions in the trend following space:
Myth 1 — Diversification lowers volatility
In traditional portfolio construction, that’s the goal. For classic trend followers, it’s a red herring. Diversification exists to give you more chances at outlier trades — not to smooth your returns. Over-focusing on correlation between markets actively cuts your profits short and causes you to miss the very moves that define classic trend performance.
Myth 2 — Richard Dennis designed ATR-based dynamic position sizing
Dennis used ATR to normalise position sizing on entry — so each trade risked approximately 1% of equity and losses were comparable across markets. Full stop. The idea of continuously resizing positions as volatility changes — to smooth the equity curve and improve Sharpe — came later, from European systematic managers looking to make managed futures more palatable to institutional investors. It sounds like an enhancement, but it achieves the opposite: it systematically reduces exposure to winning trades and eliminates the outliers that are the heart of classic trend following.
📘 The Fractals of Finance
Rich’s book is available now on Amazon in Kindle, paperback, and hardcover. Search Fractals of Finance or Rich Brennan. If you’ve read it, a short review on Amazon goes a long way in helping more traders discover it.
👉 Available on Amazon: https://www.amazon.com/dp/B0GHTH1WNK
🌐 Episode Resources
The Fractals of Finance (Amazon) https://www.amazon.com/dp/B0GHTH1WNK
📩 Send questions for future episodes: https://www.aussieturtles.com/contact
Closing Thought
March has thrown a few spanners in the works — metals have come off, equities are wobbling, and energies are moving with high volatility. But one month is a slender statistic. The trends that matter are built over years, not weeks. Stay in your system, keep your pants loose, and let the market do the talking.
Stay systematic. Stay patient. And may the trend be with you.
🎙️ Turtle Talk is here to equip traders and enthusiasts with the tools to succeed in the ever-evolving world of trend following. Make sure to subscribe, rate, and share the podcast!
Get the Aussie Turtles® Trend Following Guide
If you want to go deeper into the principles behind trend following and build a process that survives real market conditions, the Aussie Turtles® Trend Following Guide is now available on Amazon.
This book is a field manual for traders who want to move beyond prediction and commit to disciplined, systematic practice. Written by Adam Havryliv and Richard Brennan, it distills decades of experience into a practical and philosophical framework for navigating complex markets.
The guide challenges the myths of consistency and control. It explains why markets evolve through trader impact, serial correlation, and emergent structure rather than forecasts. It does not promise a holy grail system. Instead, it teaches the mindset required to capture the rare asymmetric outliers that drive long term performance.
If you are ready to trade with clarity, resilience, and conviction, this is the place to start. Click on the image below.
