Agustin Fuentes Interview with Michael Covel on Trend Following Radio.
The 2018 Michael Covel Interview on Trend Following Radio.
Shane Snow Interview with Michael Covel on Trend Following Radio.
Matthew Walker Interview with Michael Covel on Trend Following Radio.
Ep. 657: Philip Maymin Interview with Michael Covel on Trend Following Radio
Seduction and Horse Racing with Michael Covel on Trend Following Radio.
Roy Baumeister is a social psychologist known for his work on the self, social rejection, belongingness, sexuality, sex differences, self-control, self-esteem, self-defeating behaviors, motivation, aggression, consciousness, and free will. Roy has also authored over 20 books throughout his career. He likes to start his research with the premise that he doesn’t know the right answer–trying to have an open mind and clean slate.
Roy started his career studying the idea of self-control. He looked at some of the major crutches people deal with–dieting, quitting smoking, controlling emotions. Roy found that everyone has a limited amount of energy and using that energy toward will power had a limited source of regulation. When people used their energy toward gaining self control in one area, they lost it in another. One way Roy found to boost energy and restore self control in patients was to give a patient glucose. It seemed to restore self-control in the patient, giving them a boost of energy.
Roy also has studied differences in people with high self-esteem as opposed to those with lower self-esteem. Improving self esteem didn’t seem to help make life better or lead to later success but improving self control did. Working on self control was shown to be more important for success than IQ or self esteem. Asian countries, for example, have much more discipline built into their culture than American culture. Roy’s studies have shown that Asians therefore require a lower IQ to be successful because their self control overpowers other inhibitors.
Michael and Roy finish their conversation talking sex. Is it more nature or nurture? Roy has found that female sexuality is more cultural and male sexuality is more nature. Do sex norms change based on female to male ratios? Yes. When you look at populations where there is an un-equal amount of men to women and visa versa the desire for one sex to acquire the attention of the other sex is shifted. Standards are lowered/heightened. Michael includes a 30 minute bonus presentation from Roy expanding on the topics discussed on today’s podcast.
No Real Magic with Michael Covel on Trend Following Radio.
Alexander Elder has written some of the most popular trading books of the last 30 years. He grew up in Estonia among a successful family of doctors. Alexander followed in his family’s footsteps, becoming a doctor and making his way on a cargo ship. He ran from his ship to a U.S. Embassy, escaping from his country. His decision to jump ship was literally the best decision of his life. He is author of Trading for a Living, considered a modern classic among traders, an international best-seller, translated into 16 languages, and recently newly revised and released under the title, The New Trading for a Living. This is his second appearance on the show.
How is Alexander’s trading different? Alexander is motivated by creating quality. He has a sense and intuition for it. Someone who is losing money looks at their situation “like a rabbit running from a snake.” Alexander thinks differently. He trades by way of systems. He has his orders set for the day, goes skiing, then comes back to the computer to watch the last hour of trading to see if he needs to make any adjustments. He learns from his mistakes and makes sure his systems are the highest quality they can be.
What was the pivotal moment that broke Alexander into the trading direction he is in? There was not one moment, but many losing ones. He hates to lose. He overcame his losing over time with persistence and stubbornness. He studied his systems and trades vigorously until he had a winning system.
Another motivation? Knowing that failure was not an option. Alexander grew up in a successful family with money – If he failed in his home country, he would have been taken care of. However, now that he was in the United States, he knew if he failed he would be on the street. There would be nobody to take care of him. Do you hit rock bottom and paddle up? Or do you stay there and become a bum? Alexander chose to paddle up.
Asymmetric Information and Entrepreneurship with Michael Covel on Trend Following Radio.
David Burkus is author of “Friend of a Friend: Understanding the Hidden Networks That Can Transform Your Life and Your Career.” David has delivered keynotes to leaders of Fortune 500 companies and future leaders of the United States Naval Academy. His TED talk has been viewed almost 2 million times and he is a regular contributor to Harvard Business Review. What if the advice we have all heard about networking is wrong? David outlines the right way to network in the modern age.
How do you meet people? How do you meet the right people? Once you meet those people, what do you do with the relationship? Maybe you haven’t talked to someone for a few years but you could still call him or her up and have a personal talk with them. This is an example of one of the most useful networking ties, known as a “dormant tie.” David uses UFC founders, Dana White and Lorenzo Lamas, as an example. They went to high school together, hadn’t talked for years, both had a passion for fighting, but lived in different spheres of the fighting community. After reconnecting at a high school get together they realized they had some aligning career aspirations. They ended up buying the UFC and made it the fastest growing sport in history.
When you start taking chances on meeting people and putting yourself out there, that is when your network really expands. David shares another example of a movie producer who got his foot in the door by getting creative, taking some risks, and reaching out to the right people for conversations. Who do you know? Who do your friends know? Where do you know them from? These are basic questions that can get the ball rolling when trying to expand your network.
Knowing a ton of people is not necessary to be successful, you just need to know the right people to give yourself credibility. Shared activities and hobbies are ways to draw in a set of diverse people to build deep relationships. Networking events have become a thing of the past (thank goodness).
In this episode of Trend Following Radio:
"What Is and Might Be" with Michael Covel on Trend Following Radio is the new weekly view direct from Michael Covel.
From IMDB: “An unsettling and eye-opening Wall Street horror story about Chinese companies, the American stock market, and the opportunistic greed behind the biggest heist you’ve never heard of.” That’s the opening description for a new documentary titled “The China Hustle” (2017).
Today, Michael talks with Director Jed Rothstein about the backstory for his film and the complexity of fairly describing a modern China. Whether you know something about China or not–this conversation will stimulate your China understanding.
Academy Award-nominated and Emmy-winning filmmaker Jed Rothstein specializes in hard-to-get stories from around the world that help people understand one another better. Whether seeking out heavy metal musicians who become Arab-Spring revolutionaries (PBS’s Before the Spring After the Fall); pioneering doctors (HBO’s Coma and Pandemic); Al Qaeda terrorists (The Oscar-nominated HBO documentary Killing in the Name); defenders of free speech (The 2009 Sundance film Shouting Fire); journalists on the front lines (Independent Lens’ Democracy on Deadline)–Rothstein works with people to help them tell their own stories in their own words. His films and television programs have played in festivals around the world, enjoyed special screenings at the United Nations, and been broadcast on HBO, PBS, National Geographic, Amazon Prime, The Discovery Channel, IFC, Channel 4, the BBC, CNN and elsewhere.
Michael reaches back in time to explore a mega episode with three of his favorite guests: Salem Abraham, Walter Williams and Emanuel Derman.
Salem Andrew Abraham (born 1966) is an American investor, hedge fund manager, and philanthropist. He is the president and founder of Abraham Trading Company, a futures investment firm based in Canadian, Texas.
Walter Edward Williams (born March 31, 1936) is an American economist, commentator, and academic. He is the John M. Olin Distinguished Professor of Economics at George Mason University, as well as a syndicated columnist and author known for his classical liberal and libertarian conservative views.
Emanuel Derman (born 1945) is a South African-born academic, businessman and writer. He is best known as a quantitative analyst, and author of the book My Life as a Quant: Reflections on Physics and Finance.
Staying within the title of this episode: three clear thinkers.
Brennan Dunn is an expert on optimizing websites, improving user experience and scaling up sales through automation. He knows how to persuade funnel customers to create a peak-buying strategy.
Reading dialogue from Plato has been a big influence on Brennan and his career. Plato had a way of talking to people on an individual basis. Brennan took the observation and has built his business model around just that – personalization. He figures out what level of awareness a customer may have on the subject he is selling and curates a selling strategy off that knowledge. Brennan calls this life cycle marketing. He segregates emails based on how long people have been on his email list, what your interests are, and different skill levels. People buy more often when they feel an offer has been completely catered to them.
How does Brennan write such effective copy? He starts with someone’s pain and shows them he knows where they are in life, where they want to be, and what their dreams are. Nobody cares much about what the product is, they care about how it will help them get to their dream. Copywriting is more about curating that creating.
What is the best way to get your message or product out to people? What is the most effective platform of communication today? Email. Brennan has launched products through Twitter as opposed to email and the results are nowhere near the same. Email reaches a greater number of people and is not owned by one company – it is a decentralized platform. Michael and Brennan end the conversation talking website development and the importance of usability and simplicity in a website.
In this episode of Trend Following Radio:
Life cycle marketing
Predictive technical analysis is chart/pattern reading. Trend following, on the other hand, is reactive technical analysis – a diversified portfolio perspective of markets using momentum indicators. You never know what will happen in one market so you use diversification to hedge your bets. Predictive technical analysis has no evidence of success. Reactive technical analysis has decades of proof behind it. How do you find this proof? Seek out the track records of traders using trend following. You can see trend followers making and losing money over long periods of time.
Michael reads a review from a critic who is a fan of predictive technical analysis. Michael uses this review to further make his point – there is no chart that can be studied long enough that will tell you which way a market will move. Trading in this way is a recipe for failure. As Ed Seykota famously said, “Everyone gets what they want out of the markets.” When you trade as though you can predict the future, you will most certainly get what you want from the markets – failure.
Tarra Mitchell’s new book is “The Yoga of Leadership: A Practical Guide to Health, Happiness, And Inspiring Total Team Engagement.” Her work digs deep into the psychological benefits of practicing yoga and the benefits it provides for overall life wellness.
Tarra made a pivot in her career after the 2008 financial crisis. She was working to raise money for a fund of funds and decided she wanted to set off on her own – become an entrepreneur. Her new business was set to get off the ground just as the 2008 crisis was unfolding – tanking her new business opportunity. Tarra then set off on different ventures, eventually leading her to yoga. Yoga quickly became a part of her weekly routine. She decided to go through yoga teacher training, not to become a teacher, but rather to learn more about the practice. Through that experience, she realized she wanted to give back to the world by bringing the benefits of yoga into the finance industry.
Stress, loneliness, happiness, depression – it’s all contagious. Tarra saw yoga as a great way to counter some of the negativity in everyday life. Breathing and moving on a yoga mat settles the nervous system and helps quiet the mind. Yoga also helps bring students to an ongoing place of greater consciousness. Waking up each morning and doing an assessment of what’s needed for the day helps give the mind balance and power over the senses. With Tarra’s previous ties to the finance world, she quickly saw how valuable it could be to the industry.
Tarra not only see’s yoga as a way to settle the mind, but also as a healing agent. Too often, people turn to drugs and alcohol as coping mechanisms. They turn to pills for anxiety, depression, or other ailments rather than trying to develop real skills to help. Tarra teaches her students how to strengthen the mind through practice and gives students a sense of community.
When everything is going great in the market, that’s when it is time to make sure that you have a plan for when it all goes downhill. Michael reads a piece from Ben Hunt titled, “The Icarus Moment,” adding commentary throughout. Michael and Ben may have differing views on trading styles, but philosophically they are aligned.
Everyone, on some level, is stuck on a wheel. People are literally baring their souls on a daily basis. Do you want to hear everyone’s daily fears? Their daily drama? Who we are and what we do has become completely separated. What can we do about all this? Start asking the “why.” Trust your biases. Wisdom comes from the ability to think critically. Think of the why, and not just the what.
Michael ends the podcast with a bonus interview with Anders Ericsson author of “Peak: Secrets from the New Science of Expertise.” Ericsson is a psychologist and Conradi Eminent Scholar and Professor of Psychology at Florida State University. He is an internationally recognized researcher in the psychological nature of expertise and human performance. He studies cognitive ability, personality, interests, and other factors that help researchers understand and predict deliberate practice and expert performance.
Robert Kurson is the author of “Rocket Men: The Daring Odyssey of Apollo 8 and the Astronauts Who Made Man’s First Journey to the Moon.”
How did Robert get hooked on space exploration? He was born in 1963, just five years before the Apollo 8 mission. Some of his first memories were watching rockets take off. He realized he knew a lot of Apollo 11 and 13 but not much about Apollo 8. As he researched the mission he quickly learned that NASA, astronauts, and experts in the field had all talked about this mission being the most astonishing and important of all Apollo missions. Why? Apollo 8 became the first manned spacecraft to leave Earth’s orbit, reach the Earth’s Moon, orbit it and return safely to Earth. The three astronaut crew consisted of Commander Frank Borman, Command Module Pilot James Lovell, and Lunar Module Pilot William Anders.
The U.S. had historically always been behind in the race to space. With Russia continuously one step ahead, Apollo 8 gave us the advantage of having the first crew to reach the moon and paved the way for Apollo 11 to successfully put the first man on the moon.
Where do you pull your inspiration from? Michael opens the podcast quoting Nassim Taleb addressing bullies: Do you throw punches for the sake of throwing punches? No, you throw punches when it will set a standard for others not to mess with you. Michael also pulls inspiration from the 1980’s Dunbar High School basketball team. The 1981–1982 team finished its season undefeated and the 1982–1983 team continued the tradition with a 31–0 record and a #1 national ranking. They produced three first round NBA basketball draft picks. That team has become legendary.
Inspiration can be pulled from extraordinary athletes, writers, singers, and even architecture. Michael recently visited Singapore for a presentation. He has been there many times and describes it as “San Diego on steroids.” He describes the architecture and beauty of the city as awe-inspiring.
Michael ties the podcast together talking trend following and what inspires him about this style of trading compared to fundamental trading.
In this episode of Trend Following Radio:
Josef Marc is an author, entrepreneur, and CEO of Publica developing in the publishing world via blockchain. Publishing companies are some of the most inefficient businesses around today. Josef not only has cultivated a strategy to work around many of the hang-ups created by working with publishers, but has re-imagined the process altogether.
We have reached an era where people no longer care who the publisher is. Buyers can do their own research, read reviews and decide if they want to buy. How does blockchain technology help with this process? During an author’s campaign period, excitement can be generated through blockchain. Searching the content of books is easier through blockchain and there is a deeper sense of engagement throughout the community. Blockchain developments not only supply a platform for an author to get their name out, but it also creates a unique vehicle for payment. Josef also explains how blockchain can help with the re-sale of books and track when, what and who is buying a book or product.
For years Amazon has had a monopoly on book sales. Amazon relies on customer reviews to promote books and get others to buy. There is one small problem with this process – it is almost impossible to track the legitimacy of these customer reviews. How are reviews more accountable through blockchain? Everything is tracked and users have “tokenized” accountability.
Alison Gopnik is an American professor of psychology and affiliate professor of philosophy at the University of California, Berkeley. She is known for her work in the areas of cognitive and language development, specializing in the effect of language on thought, the development of a theory of mind, and causal learning. Her primary study is looking at how we learn and grow from the earliest years of our lives.
How did Alison get started down this path? She is the eldest of 6 children brought up in a bohemian style family. Being the oldest of 6 she had a deep understanding of children at a young age. She saw relationships between play and learning in babies first hand and was intrigued early on.
Alison also looks at the relationship between how long a baby is a baby before adulthood and how that relates to the rest of their life that follows. Humans generally have twice the amount of childhood than any of our animal relatives. If we have these extended periods of learning, compared to other mammals, what are human babies doing in that time? What are the other animal babies doing in that time? How does this time shape the rest of our lives in comparison?
Why is Alison so passionate about her work? She works with children everyday. She observes, plays and sees first hand how important they are. Other fields of science, particularly the artificial intelligence community, is beginning to take notice of her work. They are starting to look at children and cognitive development to help advance their programming. Introducing play and adaptation to their systems is one thing scientists have taken away from observing children. The more you play around and experiment in your childhood, the more you are able to adapt and adjust to the unknown environments. How do you go about taking on new challenges? Exploring and having fun with things often helps to solve problems quicker.
What are some lessons we are learning about kids and technology? Will this generation’s technology ruin the world? Michael and Alison end the podcast discussing the ever changing technological advances and what impacts it may or may not have on the world and the children living on it.
Martin “Marty” Bergin and James Dailey are on the podcast today. Bergin is the President and owner of DUNN Capital Management. He began working with DUNN in 1997 and took over the day-to-day operations of the firm in 2007. He became owner in 2015 (Bill Dunn remains Chairman). James Dailey became CEO of Dunn Capital in March 2016. DUNN has a track record that spans over 40 years.
Today’s podcast was recorded the week after the February 2018 volatility. Inevitably, when there is volatility in markets, machines are blamed. DUNN Capital is a trend following trading firm who uses computers for everything they do. They know fintech well. That said, there is a difference between DUNN Capital and “the machine” traders.
DUNN Capital trades from a higher volatility perspective and it has worked out well for them. They don’t charge management fees, but rather are completely incentive fee based. Further, at DUNN Capital they don’t reduce volatility for the sake of possibly reducing bad events–they still want strong profits and that is the only way they make money. Unfortunately, investors always remember drawdowns and they do try to minimize those without compromising their core system.
Finally, and this a surprise for many, DUNN Capital’s office is quiet and not very exciting. Trend following after all is about discipline and blocking out all of the media noise and information. DUNN’s investors get that. DUNN is managing money for the long term, not short term. Their trend following is geared toward data and everything in their research shows that long term trend following trading is their best opportunity.
Michael Covel walks the line on trend following.
Oliver Hart is the 6th Nobel Prize winner to appear on Trend Following Radio. He is a British-born American economist, and currently the Andrew E. Furer Professor of Economics at Harvard University. He received the Nobel Memorial Prize in Economic Sciences in 2016 for his work on contract theory.
Oliver is an expert on contract theory, theory of the firm, corporate finance, law and economics. He studies how ownership roles, structure and contractual arrangements are used in the governance and boundaries of corporations. How did he get his start? After receiving his PhD from Princeton in 1974, he began studying general equilibrium under uncertainty – particularly the behavior of firms when under uncertainty. Summer of 1983 was when his career path shifted – specifically to contracts. He became less interested in what firms should do, and more interested in how firms align with what shareholders want them to do.
Following the 2008 financial crisis, Oliver believed it was dangerous to start intervening in such a fragile economy. Yes, it was an unprecedented crisis but, Oliver believes it was totally overblown. No physical or human assets were disappearing and we had mechanisms such as bankruptcy to fall back on. What was the reasoning behind some banks beings saved and others not? Wall Street was bailed out but mainstream was not? Oliver looked at the crisis as arbitrary and rigged. Michael and Oliver wrap the podcast up discussing the differences in block chain and bitcoin and end the podcast with a 6 minute bonus Q&A.