Trend Following with Michael Covel

Michael Covel is the voice of Trend Following Radio with 3M+ listens. He is also the bestselling author of TurtleTrader & the classic Trend Following. Trading, economics, human behavior & entrepreneurship--all passionately explored. Guests over 300+ episodes include Nobel Prize winners Daniel Kahneman, Vernon Smith, Harry Markowitz & Robert Aumann. More notables: Tim Ferriss, Ed Seykota, Jim Rogers, Ewan Kirk, Larry Hite, Jean-Philippe Bouchaud, Jack Schwager, Marc Faber, Michael Mauboussin, James Altucher, Gerd Gigerenzer, Dan Ariely, Steven Kotler, Jason Fried, Sally Hogshead, Walter Williams and Tucker Max. All episodes always at www.trendfollowingradio.com/rss.
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Michael Covel is the voice of Trend Following Radio with 3M+ listens. He is also the bestselling author of TurtleTrader & the classic Trend Following. Trading, economics, human behavior & entrepreneurship--all passionately explored. Guests over 300+ episodes include Nobel Prize winners Daniel Kahneman, Vernon Smith, Harry Markowitz & Robert Aumann. More notables: Tim Ferriss, Ed Seykota, Jim Rogers, Ewan Kirk, Larry Hite, Jean-Philippe Bouchaud, Jack Schwager, Marc Faber, Michael Mauboussin, James Altucher, Gerd Gigerenzer, Dan Ariely, Steven Kotler, Jason Fried, Sally Hogshead, Walter Williams and Tucker Max. All episodes always at www.trendfollowingradio.com/rss.

Sep 4, 2015

Today’s guest is author, entrepreneur and professional poker player Annie Duke. Michael Covel and Annie Duke discuss several of the countless ways in which the psychology of gambling overlaps with that of trading, investment and other aspects of business.

Annie explains the importance of thinking probabilistically for decision-makers. Gamblers, like investors, can sometimes become so focused on their losses that it begins to affect their decision-making process in a negative way. Annie calls this “tilt” and says it occurs when players put too much emphasis on outcome. She points out that so long as you are getting an overall return on your investment via a positive expectation, small losses should be both expected and absorbed.

Michael and Annie also discuss further in depth expectancy and how the top minds in both trading and gambling think about the long-term. When involved with risk, it is always important to think realistically. If there is a 90% chance of success, don’t round it up to 100% simply to boost your confidence. This way, if the venture fails, you won’t feel the need to discard your strategy since there was always that 10% chance of failure. Overall, your odds of success are still very good. This is why Annie’s thinking is so important for all of us.

In this episode of Trend Following Radio:

  • Focusing on the process instead of the outcome
  • Understanding that it’s about your return, not you winning percentage
  • Recognizing that in investing, consistency is unnatural
  • Thinking probabilistically
  • Maximizing your expectancy
  • Understanding that a loss doesn’t necessarily reflect bad thinking

Want a FREE Trend Following DVD?  Get it here.

Aug 31, 2015

Human beings have a strange habit of trusting other humans, even when the trust isn’t warranted. Everywhere in mainstream media, statistics are used and misused to convey an agenda. All too often, people ignore the agenda and buy into this engineered information.

To be successful, both in life and in trading, a person must move beyond this behavior. You need to be a skeptic. You can’t put blind faith into a system that doesn’t make its agenda clear. You probably shouldn’t trust it even if the agenda does seem clear. This is just as true when considering pollsters like Frank Luntz as it is when listening to the sales pitches of discretionary traders on Wall Street.

In today’s episode Michael Covel discusses the biases we have as human beings that lead us to poor investing decisions. Most notably, it is a bias that prevents us from trusting algorithmic trading, even when a human alternative is demonstrably worse. Through entertaining and insightful clips, Michael demonstrates why algorithms deserve our trust: their accountability and their ability to be back tested through different market conditions.

The episode is full of interesting sound clips and passages from bright minds such as Penn Jillette, Leda Braga, Daniel Dennett, Lasse Pedersen, and David Harding.

In this episode of Trend Following Radio:

  • The use and misuse of statistics
  • Using skepticism to your advantage
  • The advantages of algorithmic trading
  • Leda Braga on why ‘Black Box’ isn’t a fair term
  • Daniel Dennett’s simplifications of algorithms and computing
  • Trend following as simple agnostic rules that can easily be passed to a computer
  • Efficient market theory failure during surprises

Get a free Trend Following DVD here.

Aug 28, 2015

Today’s guest is Mark Sleeman of MS Capital Management. Mark is a self-taught trend following trader who’s been trading since the late 80s.

Michael Covel asks Mark about the road that led him to trend following and his early experiences as an trader. Mark talks about how, in the beginning, he was only looking for a way to make money. But with his engineering background, when he happened upon systems trading, everything fell into place. So confident was Mark in both his system and his own abilities, in fact, that he was willing to sell his house to get started (to raise trading capital).

Mark points out that investing based on “bottoms and tops” alone is pointless since no one can predict where the market will turn. The key to smart investing is a diversified portfolio that can sustain small losses long enough to catch those big wins. Trend following is the only proven system with decades of empirical data to back it up, and it’s the only way to trade if you want to become a long term survivor.

Other areas of discussion include the psychology of trading, understanding that patience doesn’t come naturally (has to be learned), and the importance of maintaining a life outside the markets.

In this episode of Trend Following Radio:

  • The fallacy of “buy low, sell high”
  • The psychology of trading
  • Keeping your losses small
  • The importance of maintaining a life
  • Focusing on the strategy, not the instrument
  • Understanding that patience has to be learned

Want a FREE Trend Following DVD? Get it here

Aug 24, 2015

Today, Michael Covel reads a recent piece from Barry Ritholtz about the Death Cross: that foreboding moment when the 50 day MA falls below the 200 day MA. Then Michael looks at how a Twitter debate between Cliff Asness of AQR and Jerry Parker of Chesapeake Capital, sparked by the article, led to an examination of momentum v. trend following.

The so-called Death Cross is viewed by many to be an omen, a signal of dark days to come. And while that could be partly correct in the context of a complete system, the Death Cross is just a signal. It’s a mistake to think of it in apocalyptic terms that something will happen in 6 months time, etc. The Death Cross is the type of signal that can work for the investor with a robust, diversified portfolio within a system that doesn’t aim to predict the future. This is all about what’s happening in the present price, so you can take action now.

Michael also plays and comments on a Bloomberg interview with Barry Ritholtz, discusses the folly of predictive technical analysis, and hammers home the fact that trend following is the only proven form of quantitative trading.

In this episode of Trend Following Radio:

  • The importance of ignoring old concepts
  • Trend Following is about taking action
  • Why no one can predict where the market is headed
  • Incorporating the Death Cross into a diversified portfolio
  • Understanding momentum trading
  • The idea of “heuristics”

Want a FREE Trend Follwing DVD? Find it here

Aug 21, 2015

Today’s guest is Lasse Pedersen, finance professor at Copenhagen Business School, principal at AQR Capital Management, and author of the new book “Efficiently Inefficient”. Pedersen earned his Ph.D. in finance from Stanford University and has over a decade of experience in the industry.

The conversation opens with an examination of the two opposing views on how markets operate. One view holds that markets are fully efficient and reflect real values, while the other contends that market prices are inefficient and tied more to investors’ emotions than anything else. Pedersen discusses his own interpretation — that markets are neither fully efficient nor fully inefficient, but rather a combination of the two — and that it’s this equilibrium that provides the stability needed for investors to make gains.

Michael Covel and Lasse Pedersen discuss the commonalities in the varied strategies of some of the most successful investors in the world, many of whom are interviewed in Lasse’s new book. One such commonality with these investors is their constant awareness of risk management, and the concept of gambler’s ruin. But at the same time, as Lasse is quick to point out, many of these financial legends freely admit that some of their greatest lessons were learned through their losing trades.

Other topics include the rise of quantitative investing, the role of hedge funds in the economy, and how leverage can effectively be used as an investment tool.

In this episode of Trend Following Radio:

  • Discretionary vs. quantitative trading
  • The importance of sticking to your financial plan
  • The various investment styles of the successful
  • How reflexivity affects market prices
  • Backtesting to identify effective investment strategy
  • The role of hedge funds

Get a FREE Trend Following DVD by going here

Aug 17, 2015

Many that aspire to be successful investors or traders look up to Warren Buffett as a role model. Yet the chances of anyone amassing that wealth by following the same path as Buffett are extremely unlikely. Debating survivorship bias seems perfectly appropriate, but that's never broached.

On the other hand, becoming the next Bill Dunn or Ed Seykota (or fill in the blank with the name of any trend follower) has much more possibility. In the trend following world there are many more successful traders, successful examples, which is much more motivational and inspiring.

In this episode, Michael Covel curates excerpts from Kevin Bruce, Jim Simons, and David Harding. All three talking about systems and or trend following. The important point about systems is not just selecting the right one, but also sticking to it once selected. Often people are tempted to make discretionary calls and override a system, defeating its original purpose. Instead, the potential rewards and risks inherent in a trend following system should be evaluated at the beginning, discretionary calls made at the outset, then let the system run without interference. That is the path to potential success.

In this episode of Trend Following Radio:

  • The importance of practice and persistence in trading
  • Finding trends mathematically
  • The importance of not overriding systems
  • Being prepared for drawdowns
  • Looking at the S&P 500 as a trading system
  • Dispelling the myths of the mainstream financial world

Get a FREE Trend Following DVD here.

Aug 14, 2015

Today’s guest is Alexander Ineichen founder of Ineichen Research and Management. He is the author of several books including “Absolute Returns” and “Asymmetric Returns”. Inehichen has been researching and writing about trend trading strategy for decades.

The conversation today focuses on the notion of simplicity as sophistication. Michael Covel and Alexander Ineichen discuss the habit of investors to get caught up in market forecasting fantasies. Often, as research shows, people are drawn toward the excitement of what they perceive as the financial industry dream. They get distracted by what could be the future when they should be directing their attention at what’s happening in the moment. This is also what trend following is all about.

Ineichen explains his particular method of nowcasting, which involves combining hard market trends with socio-economic data from other fields. The end goal is to create a far more robust and stable system for the vast majority of investors. He aims to eliminate the “show element” of forecasting and analyze what’s happening on the ground – now.

Michael and Alexander also discuss the difficulty of investing in tech – prediction doesn’t work there either.

In this episode of Trend Following Radio:

  • Seeing through the market forecasting flash
  • The importance of “check box” methodology
  • Simplification as sophistication
  • The concept of nowcasting
  • Understanding the whole, so you know what can be eliminated
  • Learning to watch for trend reversals

Want a FREE Trend Following DVD? Get it here

Aug 10, 2015

“Should I invest in X?” is a question often heard in the investment world. Coming from the general public it is an especially strong cry out. The answer to that question is simple, although not obvious to many.

What you invest in doesn’t matter; it’s the strategy that matters. Markets are instruments: you can choose the best market and instrument for your purpose, but ultimately it is your strategy for using that market/instrument that determines the outcome.

In this commentary Michael Covel curates several excerpts from Richard Feynman to Paul Samuelson and creates a narrative to illustrate the contrast between fundamental and technical traders. Covel also makes a case study of Commodities Corporation – the hedge fund/incubator that was founded and run by some of the biggest trend following heavyweights of our time.

One of the most notable aspects of Commodities Corporation’s success is their pivot from their original fundamental strategy to a trend following strategy. Though the company is not talked about much today (bought by Goldman Sachs years back), their trend following legacy still permeates the investing world.

In this episode of Trend Following Radio:

  • Defining the exact risks involved in a trading strategy
  • The importance of liquidity: entering and exiting markets with ease
  • What we can learn from the history of Commodities Corporation
  • How the scientific method applies to trading logic
  • How Fundamental Analysis differs from Technical Analysis
  • The origins and basic principles of Trend Following Trading
  • The importance of accepting the risks and committing to your strategy

Want a free Trend Following DVD? Get it here

Aug 7, 2015

Just as shamans have been consulted throughout time to provide the desperate and gullible with prophecies, so too are financial shamans (often masquerading as experts) are looked up to for comforting myths about market direction.

Of course, we can and should prepare for the many possible market eventualities by looking at the data and trading trends, but to expect anyone to be able to provide absolute predictions for the future is absurd. The truth is that we do not know for sure, and anyone that tells you they do know might as well be gazing into a crystal ball.

Today’s episode looks at the various attitudes and beliefs concerning the falsehood of market predictability. Michael Covel runs the commentary, drawing a narrative thread through various excerpts from some of the most prominent economic and financial thinkers.

In this episode of Trend Following Radio:

  • Recognizing when you are being misled by the experts
  • What to look for in trend analysis and what to be wary of
  • Considering bubbles and other unpredictable global factors in the markets
  • Finding an objective approach to investing based on quantifiable information
  • Considering timeless human investment psychology elements
  • Making investment decisions without being blinded by rigid economic processes or political ideologies  

Want a FREE Trend Following DVD? Get it here

 

Aug 3, 2015

The popular life scripts that were a surefire path to success in the 20th century no longer work today. “Go to college and get a steady job until you retire” is no longer the optimal choice. Yet many people still believe that if they push harder or work more within these old scripts, they will succeed. But much like in trend following, continuing to be mentally attached to a trend that is on the decline will only result in further losses.

In today’s world, the opportunities and rewards associated with entrepreneurship are many. As college tuition rises, the value of a degree decreases, and with many jobs going dinosaur, entrepreneurship is becoming a smarter choice for many – and a less risky choice than standard issue job thinking.

Today’s podcast guest Taylor Pearson is the 26-year old author of the #1 Amazon best selling book The End of Jobs. Pearson has spent the last several years researching and traveling the world and talking to successful entrepreneurs, which inspired him to write the book.

In this episode, Pearson and Covel talk about automation taking away jobs, how globalization and travel are making entrepreneurship more accessible, the difference in mindset between entrepreneurs and employees, and the search for meaning in life and work.

In this episode of Trend Following Radio:

  • How entrepreneurship is becoming safer than jobs
  • Why college degrees are getting more expensive and less valuable
  • The importance of relationships and your network in business
  • Why the occupy movement was flawed from the start
  • Not seeking permission to do something you want to do
  • How the perceptions of risk in our society are wrong
  • Choosing a path in life that has meaning to you

Get a FREE Trend Following DVD here.

Jul 31, 2015

Many of the investment and trading approaches available today simply do not perform the same way in the real world as they do during simulation. This is why it's important to “look under the hood” of your trading strategy to understand how something works instead of simply taking it on faith.


This episode’s guest has appeared on the podcast twice before. Eric Crittenden is one of the key mind's behind Longboard Mutual Funds, a firm that has over 300 million dollars under management. Crittenden was also featured in Michael Covel's "Little Book of Trading".


In this episode, Eric Crittenden talks about creating a mutual fund based on trend following principles, why investment returns are not normally distributed, how financial simulations differ from the real world, and how to control risk in a trend following system.


Eric has many insights into trend following and trading in general, and has the financial data to back up his findings. He has also published several research papers on the matter, which are linked to below.


In this episode of Trend Following Radio:


-Relative momentum vs. time momentum
-Survivorship bias in the financial advisory market
-Defining risk – how much are you willing to lose?
-Why trend following works for both high-risk and low-risk assets
-Identifying the “sweet spot” client for fund managers
-The difference between most mutual funds and direct-managed funds
-Financial simulations vs. real life

Get a free Trend Following DVD here

Jul 27, 2015

There is often misunderstanding among the general public when it comes to probability and risk. For example, 20% of Americans believe they are in the top 1% of income earners, or are soon to be there. This is, of course, statistically impossible.

Statistical thinking needs to have a bigger focus in our society, especially since the amount of data we have to deal with on a daily basis is constantly increasing. We need systems to help us sift through the noise.

Today’s episode is a selection of excerpts from some of the brightest minds of today and yesterday, and their takes on systematic and statistical thinking. Michael Covel provides the commentary. Though this is not strictly a trend following episode, all the material is very much applicable and relevant for anyone in trading or business.

From Penn Jillette (of Penn & Teller) to Gerd Gigerenzer, to Daniel Dennett, to Richard Feynman, this episode is permeated with wisdom to help you cultivate a trend following mindset.

In this episode of Trend Following Radio:

  • Having a foundation, a system to get through the noise
  • Developing a statistical mindset
  • Understanding risk and knowing how to deal with it
  • Getting “under the hood” of any trading system
  • Richard Feynman’s lecture on computer heuristics
  • What computer heuristics have to do with systems trading
  • A trait that geniuses have in common
  • The importance of isolation and concentration in learning

Want a FREE Trend Following DVD? Get it here.

Jul 25, 2015

Bonus episode that discusses new trend following trading system available now. This episode is only for those listeners seeking a trend following trading system.

Jul 24, 2015

Today’s podcast guest is Chris Clarke, ex-Goldman Sachs executive director and founder of Lawrence Clarke Investment Management. Clarke has been developing trading systems for decades.

The conversation today gets into the psychology of systems trading. Trend following is inherently simple to understand, and does not require above-average intelligence once the system is in place. Yet so many people, including most fund managers, tend to downplay trend following and keep seeking the “holy grail” – a magical system that will supposedly make them money without any downside. An interesting metaphor for this that Chris offers is that of weight loss. Although the theory of it is simple (diet and exercise), most people keep seeking the magic bullet that will make them achieve results without following the system. Much the same with trading.

Another topic that Michael Covel and Chris Clarke talk about is understanding the difference between risk and drawdowns. Drawdowns are normal, and will be there for as long as trend following as a strategy exists, and the markets keep trending. Ultimately, trend following is about human nature, and that’s not about to change.

In this episode of Trend Following Radio:

  • Trusting the system once you choose it
  • Being prepared to trade no matter which way the markets go
  • The importance of edge, and why most gamblers lose
  • Looking at the math behind trading strategies
  • Understanding “market truths”
  • Drawdowns vs. risks

Want a FREE trend following DVD? Get it here.

Jul 20, 2015

An article recently appeared in Forbes, entitled “What Jurassic World Can Teach Investors About The Stock Market”. In it is an interview with Ben Carlson on why simplicity trumps complexity when it comes to investment strategies. Although not explicitly about trend following, the article brings up points about the poor historical performance of financially engineered assets and the superiority of simple systems.

In this monologue, Michael Covel talks about his desire to seek the truth, and the importance of taking personal responsibility for your actions. He also breaks apart the Forbes article on simplicity vs. complexity, and the logical reasons why trend following systems have historically performed better than others.

Also in this episode: the recent study that shows that metal-heads from the 80s are happier and better adapted than their peers.

In this episode of Trend Following Radio:

  • Why simple strategies are better than complex ones
  • The importance of defining your risk as a number
  • How risk and reward are two sides of the same coin
  • Why going for the average is a losing strategy
  • The difference between hiring a financial advisor and an trader
Jul 17, 2015

Continuing the theme of speculation and gambling from the previous episode, today’s Trend Following Radio guest is Blair Hull. Hull got his start playing blackjack in Nevada casinos, and later moved onto trading. He founded his investment firm, Hull Investments, in 1999. The company, which leveraged technological innovations and quantitative models, was one of the world’s premier market-making firms, trading on 28 exchanges in nine countries.

The parallels in Hull’s approach to gambling and trading are many. He stresses the importance of objectivity and sticking to the system, especially during a losing streak when emotions run high. It’s not only about brain power, it’s about discipline.

In this interview, Blair Hull and Michael Covel talk about the parallels between blackjack and stock trading, the importance of money management and discipline when following systems, and the future of trading and market prediction.

In this episode of Trend Following Radio:

  • The importance of having a strategy and sticking to it
  • Why money management and discipline are key to trading success
  • Objectivity vs. emotions in blackjack and stock trading
  • Choosing the right markers and variables
  • Consumption as a function of income and wealth
  • The future of market prediction and machine learning

Want to get a FREE Trend Following DVD? Find it here: http://www.trendfollowing.com/win

Jul 13, 2015

Speculation has become a pejorative for some in recent times. A quick search yields the following definition of speculation: “forming a theory about a subject without firm evidence.” Yet if we look at the origin of the word, “speculor” means “to observe” in Latin. To speculate is to observe, and to make decisions based on those observations. In business and in life, there are ultimately two choices: to speculate or to gamble. The difference between the two is simple: the first has a strategy behind it; the second does not. The first relies on predetermined parameters for making decisions; while the second leaves decisions up to circumstance or emotion. In this monologue, Michael Covel talks about the philosophical foundation of success: speculation. This episode features many notable quotes from famous economists and traders, going back as far as the 1800s. The wisdom of these men is the foundation of trend following, and is as relevant today as ever. In this episode of the Trend Following podcast: why speculation is such an important concept, the philosophy behind trend following, watching results rather than causes, cutting short your losses, timeless excerpts from as early as the 1800s, and the early beginnings of Wall Street. Free trend following DVD: www.trendfollowing.com/win.

Jul 10, 2015

Francisco Vaca can be called a “second generation turtle trader”. He worked with Richard Dennis at C & D Commodities, and for the last 15 years has been closely associated with Paul Rabar. He is now the Co-Chief Investment Officer at Rabar Market Research. Before he became a trader, Vaca was a particle physicist and worked at the famous Fermi lab. This is not an insignificant fact, as his background in mathematics and statistics became very useful in his career as a trader. In this second interview with Michael Covel, Francisco Vaca talks about evaluating the short-term and long-term performance data of fund managers, the benefit of using trend following systems across the entire time spectrum, trend anticipating techniques, and using modern technology in trading. In this episode of Trend Following Radio: the importance of distinguishing between long term and short term track records, “alpha” and “beta” trading strategies, how the holding period length affects the risk-reward profile and return streaks, the benefits of diversification across different holding times, using high frequency trading technology in long term trend following, how correlations are often misinterpreted, and knowing the limitations of your tools. Get a FREE Trend Following DVD: http://trendfollowing.com/win.

Jul 6, 2015

A May 25, 1959 Time Magazine article called “Pas de Dough” was recently forwarded to Michael Covel. It was about a professional dancer named Nicolas Darvas, who had made two million dollars trading stocks. This was probably one of the first trend following articles to appear in a major publication. Sports metaphors when it comes to trend following work great, but there are clearly others. For example, both trend following and dancing judge the public’s enthusiasm and use that as the indicator for the next move. In this monologue, Covel talks about the article and Darvas' book, breaks down the fundamentals of trend following, and explains why the philosophy behind trend following still applies today. He also comments on how trend following can be applied to the current black swan economic situations in China and Greece. What trend following and dancing have in common, the philosophical foundations of trend following, stock trading and location independence, why relying on “fundamentals” is fool’s gold, what being a silent partner in the trend means, why Darvas’ thinking from 1959 still applies today, the importance of having no ego when it comes to trading. Free trend following DVD: www.trendfollowing.com/win.

Jul 3, 2015

There is a common problem in finance when it comes to evaluating investment managers’ performance: the factor or skill vs. luck. When a manager performs well over a number of years, it is not clear whether the success can be attributed to the manager’s skill and strategy, or random luck. And vice versa, when a manager performs badly, it can be difficult to pin-point whether it was due to lack of skill, or simply bad luck. Another factor that is commonly misunderstood in finance is risk. Understanding the differences between risk, volatility, and skew is essential to developing a well-performing trading strategy. Campbell Harvey studies these phenomena. He is a finance professor at Duke university, and research associate with the National Bureau of Economic Research in Massachusetts. His research papers on these subjects have been published in many scientific journals. In this episode, Campbell Harvey and Michael Covel discuss risk tolerance, evaluating trading strategies, Harry Markowitz’ classic paper on portfolio selection, and the importance of differentiating between volatility and skew. In this episode of Trend Following Radio: Survivorship bias, and not being fooled by randomness, Why people with higher risk tolerance experience much higher upsides, Understanding process vs. outcome, The difference between volatility and skew, The importance of recognizing that asset returns are rarely “normally distributed”, When it is appropriate to apply a general framework, and when it is not, The Sharpe ratio – is it always relevant?, Harry Markowitz, Jim Simons, and Nassim Taleb. For more information and a free DVD: trendfollowing.com/win.

Jun 29, 2015

Michael Covel presents a monologue today about his recent trip to Mainland China (Beijing). A trip that centered on his presentation to 1100 Chinese investors and traders. For those listeners that have not yet traveled to China--either for business or vacation--Covel offers a wide-ranging primer. There is no doubt that from a business perspective especially--the time for China is now. The population is massive, the energy is overwhelming and the desire is infectious. Regardless of your current understanding of China, your perception of their government or the many other misunderstandings so prevalent in the West--China has at its core a deep desire for business and success. The adrenaline is simply to be felt. And yes, they want to learn trend following too. Free trend following DVD: www.trendfollowing.com/win.

Jun 26, 2015

Today on the podcast Michael Covel speaks with Dr. Jonathan Fader. Fader is a licensed clinical psychologist and is the team psychologist to the NY Mets baseball team. Fader also writes a blog for Psychology Today entitled 'The New You'. He maintains an active clinical practice, is an assistant professor of Family Medicine at the Albert Einstein College of Medicine and teaches in the Beth Israel Residency Program in Family Medicine in New York City. Fader and Covel discuss motivational interviewing, sport psychology techniques, process v. outcome, the mistake of focusing only on results, mental state and stress, mindfulness, Facebook distraction, Eastern traditions, the moment of now, and quieting the mind. Issues discussed apply to life, trading, sports and business--Fader offers insights we can all use. More on Fader at www.jonathanfader.com. If you would like a free trend following DVD go here: www.trendfollowing.com/win.

Jun 22, 2015

Michel Covel offers a take about passion -- the critical element of your success. An excerpt from the recent Birdman film and comments from Pink Floyd's Roger Waters help make the case. In Birdman the Michael Keaton character approaches a critic in a dive bar. Everyone is afraid to approach the critic, the fake gatekeeper. Keaton shows the passion. Are you afraid of the gatekeeper? Great. You have already lost. Next, Roger Waters talking about the classic song Brain Damage from the Dark Side of the Moon reveals his motivation, his passion. "Got to keep the loonies on the path." It doesn't matter your endeavor, trading, investing, entrepreneur--if passion is missing you are the walking dead, already 2 steps behind. The good news? Passion can be turned on instantly. It is in your power.

Jun 19, 2015

Michael Covel speaks with Ed Seykota on his second visit to the podcast. Originally profiled in the classic book 'The Market Wizards', Seykota has played a pivotal role in the growth of trend following trading for 40 years. This conversation breaks down into three parts: Govopoly, the Trading Tribe and trend following. Govopoly is Seykota's most recent book. In it he sees the economy transforming from a free and open societal structure to a controlled structure. The Govopoly system is taking over. It's not about another election to solve this, or to try and fix it. It is what it is and best we can all do is to cope with it. Seykota sees the Trading Tribe as one means of coping. The Trading Tribe is an association of people who commit to excellence, personal growth and supporting and receiving support from each other. The members of the Trading Tribe trade roles, becoming in turn senders and receivers for each other. Lastly, Seykota and Covel discuss trend following. Specifically, Seykota shares early experiences with Richard Donchian and his solo time with mainframes testing some of the first trend systems via computer. Finally, Seykota shares his motivation for his life (and some insights about puzzles). For more: www.seykota.com. If you would like a free trend following DVD go www.trendfollowing.com/win.

Jun 15, 2015

Michael Covel discusses one of Michael Mauboussin's white papers, “The Babe Ruth Effect”. This paper first caught Covel’s eye over a decade ago. It makes the critical point that big wins can pay for small losses (expected value thinking). Covel discusses the expected value mindset and how it relates to other fields, especially venture capital through a blog entry by Chris Dixon. Next, Covel connects a podcast episode titled “Good Bubbles, Bad Bubbles, and Where Unicorns Come From” with Bill Janeway, a venture capitalist and partner at Warburg Pincus. Covel shares a few excerpts covering liquidity and survivorship bias (all in this frequency v. magnitude mindset and all relating back to the Babe Ruth effect). Covel brings these topics to trend following as well. Want a free trend following DVD? Go to trendfollowing.com/win.

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