There is a current meme that trend-following as a strategy is bad because of the extrapolative behavior of investors. Unfortunately, there is a failure to think through the behavior of systematic trend-following versus looking at investor expectations through flows and their return result when plotted against market moves. Trend-following will buy rising markets, but will cut or reverse exposures upon reversal. This behavior is usually faster than the three quarter correlation showed by the author. Additionally, trend-following will use risk management to control exposure and cut loses. This does not occur with mutual fund return chasers.
Yes, performance chasing with the crowds of mutual fund investors is bad, but that is not the same as saying following trends is a bad strategy.