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When oil prices retreat: it's much more difficult to generate consistent returns

According to Bloomberg, Pierre Andurand - a well known and closely followed oil trader - had a rocky start in 2023.

During the first week of 2023, growing concerns about the risk of recession worldwide pushed oil prices below $74 a barrel in New York.

Down 19%

Andurand Commodities Discretionary Enhanced hedge fund slumped 19% last week, according to an investor letter seen by Bloomberg. It's important to note that this fund has been one of the best performing hedge funds in the world last year.

In early 2019, Pierre Andurand closed his firm's New York office after a very difficult trading year in 2018.

Difficult to maintain stellar returns

Pierre Andurand's hedge fund surged 154% in 2020, 87% in 2021 and 59% in 2022. At one point in 2022, his fund was up as much as 160% but gave up a large part of the gains during the second half of the year.

It's easier to generate returns when oil prices - predictably - increase

Pierre Andurand anticipates that oil prices may exceed $140 per barrel in 2023 if Asian economies fully reopen after Covid-related shutdowns.

Whether Pierre's high conviction may or may not materialize, TerraManta has a different perspective.

It is (and will be) much more difficult to generate consistent returns

Most investors prefer to generate consistent returns while anticipating and taking advantage of market volatility in a much more predictable manner.

In early 2018, Pierre Andurand suggested that crude oil prices would reach $100 per barrel. In October 2018, Pierre's fund lost 20% - taking the fund down more than 12% for the year.

An astute reader will observe that history tends to repeat itself.

TerraManta is the only company which uses machine learning to anticipate market behavior and forecast commodity prices without human biases. This bias-free approach is our high conviction strategy.

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