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premise that market prices, rather than market fundamentals, are the key aggregation of information needed to make investment decisions. He says, "The markets are people's expectations," and these expectations manifest themselves as price trends. "We live in an uncertain world. One cannot predict the future of anything. In an uncertain world, identifying and following trends may be the only reasonable investment approach over the long term."

Henry feels that a mechanical approach has more value since no scientific approach or solid testing can be applied to discretionary trading.

Henry says that his edge is patience. He takes an extraordinarily long viewpoint and perspective. He expects to hold positions for months rather than days on an average trade. Holding a position for a year or more is not unheard of. Henry says that Wall Street executives tell him JWH is probably the most long-term of the futures traders they work with. He adds, "This [long-term] strategy tends to reduce costs and allows for faster growth."

Henry says that when he first researched the markets in the 1970s, he was looking for a methodology that would work through many market conditions. His research showed that long-term approaches work best over decades. "There is an overwhelming desire to act in the face of adverse market moves. Usually it is termed 'avoiding volatility' with the assumption that volatility is bad. However, I found avoiding volatility really inhibits the ability to stay with the long-term trend. The desire to have close stops to preserve open trade equity has tremendous costs over decades. Long-term systems do not avoid volatility, they patiently sit through it. This reduces the occurrence of being forced out of a position that is in the middle of a long-term major move."

He believes that patience during poor trading periods (such as the past three years for managed futures trading) is the most important weapon in one's arsenal. "I have never felt we have had a black box. We have a philosophy that follows trends as they change and emerge. We set our leverage to ensure we will be there after particularly poor trading periods. We don't seek to have large profits during those periods. We seek to remain in position to follow major trends that can last for years."

Leverage can be anywhere from three to six times capital. Leverage in the managed futures world is different than in the hedge fund world. It is the margin put up versus the value of the contract size, thus reflecting the dollar amount the manager controls.