Trend Following with Michael Covel
Bestselling author Michael Covel is the host of Trend Following Radio with 7+ million listens. Investments, economics, decision-making, human behavior & entrepreneurship--all passionately explored. Guests include Nobel Prize winners Robert Aumann, Angus Deaton, Daniel Kahneman, Harry Markowitz & Vernon Smith. Also: James Altucher, Dan Ariely, Jean-Philippe Bouchaud, Kathleen Eisenhardt, Marc Faber, Tim Ferriss, Jason Fried, Gerd Gigerenzer, Larry Hite, Sally Hogshead, Ryan Holiday, Jack Horner, Ewan Kirk, Steven Kotler, Michael Mauboussin, Tucker Max, Barry Ritholtz, Jim Rogers, Jack Schwager, Ed Seykota, Philip Tetlock & Walter Williams. All 600+ eps at www.trendfollowing.com/podcast.

Michael Covel speaks with Mark Manson on today’s podcast. Manson is an author and personal development consultant. Manson has worked with thousands of people from over 20 countries and his writing offers a different take on the self-help genre. Manson calls it “self help from a first person perspective”. He has sold over 15,000 copies of his book “Models: Attract Women Through Honesty” and almost 400,000 people read his site each month. He’s been published and quoted on CNN, Huffington Post, Business Insider, Yahoo! News, The Sydney Morning Herald and a variety of other publications. He is also the CEO and Founder of Infinity Squared Media LLC. Covel and Manson discuss why people are such ass----- on the internet; internet communication vs. real world communication; becoming desensitized to the internet; how Manson came to his entrepreneurial path and how he was inspired by “The 4-Hour Workweek”; location independence and how travel has changed Manson; consumerism in America; having an excess of choice in your life; the type of business Manson has developed and why it’s been successful; why certain approaches to dating aren't emotionally healthy; our bias against performers; and why Manson refers to himself as “self-help for people who don’t like self-help”. For more information on Mark Manson, visit markmanson.net. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 305.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel digs into the epic 2014 crude oil plunge and the profits that have followed (from the drop!). In breaking apart the issue Covel quotes Byron Wien, the Vice Chairman of Blackstone, on his oil predictions. What good is a prediction if it’s not even close to reality? If Wien can’t predict the price of oil how can the average investor? It’s that simple. Covel adds into the discussion the importance of cutting your losses, and why all successful traders do so. Building on taking a loss, Covel opens up catastrophic loss "imagination". Can you imagine a 75% drop in the stock market? Don’t be caught like the fundamental guys with no plan. Prepare for it. Covel also discusses why having a system means not having to be "definite"; having an approach based on the fact that you don’t know what is going to happen next; and why trend following has been buried in the mainstream media. The oil plunge in 2014 has been historic and offers a great example of trend following success in action. Would you like a free trend following DVD? Go to www.trendfollowing.com/win.

Direct download: 304.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Charles Faulkner today on the podcast. Faulkner is an author, trader, and an expert on modeling the knowledge and performance of exceptional individuals. He was originally featured in "The New Market Wizards" by Jack Schwager. Covel and Faulkner discuss the notion of fictional people and why famous figures in finance are “fictional”; the importance of narratives, stories, and metaphors; the halo effect and deluding ourselves; the difference between a story and a strategy; the nature of independent thinking; herd behavior; ego, ignorance, and authority; the five different types of minds: the experiencing mind, the imaginative mind, the reasoning mind, the reflective mind, and the generative mind; system one and system two; why words don’t change people but experience does; experience base and the difference between amateur and professional traders; the two kinds of market wizards; language in the context of the five different types of minds; the importance of asking “how” does the market work over “why”; the importance of luck and time in the case of Warren Buffett; why you shouldn’t get your excitement from trading. For more information on Charles Faulkner, visit charlesfaulkner.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 303.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel speaks with Zbigniew Hermaszewski & Natasha Reeve-Gray, two of the four founding partners of Altis Partners--a very successful systematic and primarily trend following money management firm. Covel, Hermaszewski, and Reeve-Gray discuss Covel’s recent experiences traveling in Asia; the advantages of location independence; early triggers that led Hermaszewski and Reeve-Gray into the systematic trading world and away from the efficient market hypothesis; why Hermaszewskii was motivated to go down the particular path he went down; the advantages of a physics background when applied to trading; looking for predicability in the markets; how Altis uses predictability in the context of their world; the four broad types of market behavior in Altis’ program; trend following and persistence; inter-market relationships; why there are no “manual” inputs in Altis’ systematic program; portfolio construction and why Altis is different from its peers; applying the same models to all markets; and the collegial atmosphere amongst London CTAs. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 302.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Jim Rogers on today’s podcast. Rogers is an American businessman, investor and author currently based in Singapore. He is the Chairman of Rogers Holdings and Beeland Interests, Inc. He was the co-founder of the Quantum Fund and creator of the Rogers International Commodities Index (RICI). Rogers does not consider himself a member of any school of economic thought, but has acknowledged that his views best fit the label of Austrian School of economics. Covel gives some of his personal history with Rogers, noting that he also first read about him in the Market Wizards book. Covel also notes that Rogers’ Investment Biker book inspired him to travel. Covel joins Rogers for an in-person conversation from Singapore. They discuss why it shows that the kind of people that travel are the kind of people you want in your country; infrastructure in China; stereotypes of various countries in Asia; China’s military; current Fed policy in America; what “can-do” spirit can do in a state of decline; why the next crisis might be worse than the last; the importance of language skills; participating in big long-term bets with regard to countries; and why, if he could, Rogers would put all of his money into North Korea. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 301.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel presents a monologue and interviews Travis Jamison on today’s podcast. To start Covel reflects on the first 300 episodes of his podcast. He talks the start of the podcast, key guests and the overall uniqueness of the show. Covel also discusses massive September 2014 trend following performance, whether you can time the top, survivorship bias and the trend following is dead crowd. Next Covel talks with Travis Jamison. Jamison is the founder of Supremacy SEO. He’s a passionate entrepreneur, and a man known for high-level search engine optimization (SEO) chops. Covel and Jamison discuss search in general and search engine optimization; how the fascination with search triggered with Jamison; the idea of manipulation; Google and a monopoly, and some of the competition; Google’s dominance; Google’s definition of “quality”; the EPIC browser; the mindset of being honest on the internet; black hat and grey hat; Google’s penalties, and what can happen when you go too far; if there’s any recovery after being penalized by Google; competitors affecting SEO; Panda, Penguin, and Hummingbird: some of the Google updates; what the future might hold for search. For more information on Travis Jamison, visit supremacyseo.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 300.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Scot Billington and Jon Boorman on today’s podcast. Scot Billington is one of the managers of Covenant Capital along with Brince Wilford. Billington is the Chief Manager, Head Trader, and is responsible for all system development at Covenant. Covel and Billington discuss his firm’s exceptional performance in September of 2014; why low volume and low volatility tend to be accompanied by low returns; whether all of Billington’s trend following trading is predicated on a weekly system; Billington’s background and what got him into the systematic trend following space; why simplicity is the ultimate sophistication; marketing vs. trading reality; why certain investors try and disguise their trend following strategies as something else; why trend following is one of the most repeatable, teachable strateges; why the world still believes in the efficient market hypothesis; why trends continue to emerge as a function of the marketplace; the idea of a barbell strategy; and why upside volatility is not such a bad thing. Next, Covel talks with Jon Boorman in his second visit to the podcast. Boorman is the President and CEO of Broadsword Capital, LLC, a Registered Investment Adviser in Charlotte, NC. Boorman has spent over two decades in global markets, witnessing first-hand some of the most tumultuous periods in financial history. Boorman started the Alpha Capture blog in January 2013 to keep a record of trading signals and market commentary, and demonstrate to a wider audience what could be achieved through trend following. The primary aim has always been to inform and educate. Covel and Boorman discuss the fear of public speaking; the idea of ego in the context of both trend following and buy & hold systems; why you’d seek to minimize rather than eliminate both ego and emotion in the context of trading; how Boorman and Jerry Parker connected and Parker’s early influence on Boorman; both Parker and Boorman’s views on exit strategies; how Twitter changes the level of access we have to each other; whether Boorman’s RIA might move into a fund structure; and process vs. outcome. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 299.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Emanuel Derman on today’s podcast. Derman is a South African-born businessman and writer, best known as a quantitative analyst. His books include My Life As A Quant: Reflections on Physics and Finance as well as Models Behaving Badly. Derman is a Columbia University professor and formerly at Goldman Sachs. Covel and Derman discuss why economics can be an 'incestuous' field; economics as a moral science; why all four of the US investment banks were not allowed to go by the wayside; Derman’s background and his PhD in theoretical physics; Derman’s early eye-opening experiences at Goldman Sachs; model building, and how Derman was indoctrinated into the world of model building; the financial model and science and the physics model and science; short volatility models vs. long volatility models; how one estimates risk; models vs. theories; whether Derman finds a certain amount of pushback from others in the academic community. For more information on Emanuel Derman, visit emanuelderman.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 298.mp3
Category:general -- posted at: 12:05am EST

Michael Covel speaks with Gabriel Oettingen on today’s podcast. Gabriele Oettingen is a Professor of Psychology at New York University and the University of Hamburg. Her research focuses on how we think about the future, and how this impacts cognition, emotion, and behavior. Her first book is called Rethinking Positive Thinking. This is an interesting conversation for Covel--Oettingen is looking at data, just like traders would, but she is looking at data on motivation and positive thinking. Is too much positive thinking a problem? It can be. Is there a way to go about thinking about the future, and thinking positively? Oettingen has a framework and structure that can help us all. Covel and Oettingen discuss positive thinking, optimism and over-confidence; how positive thinking can reign in your sense of urgency; the effect of positive thinking on us from a scientific viewpoint; whether Oettingen views her work as an attack on the self-help industry; Oettingen’s process and how she views data; the WOOP (Wish, Outcome, Obstacle, Plan) process; understanding each component part of WOOP; “ah-ha” moments in Oettingen’s early development; the idea of WOOP as mental contrasting; non-conscious processes. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 297.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel interviews Ewan Kirk on today’s podcast. Kirk is the head of Cantab Capital and has brought his firm from $30M AUM in 2006 to over $5B today. Kirk employs several strategies but clearly uses a trend following foundation. Covel and Kirk discuss how consistent and predictable profits are the Holy Grail--you’re never going to get there. Covel and Kirk also explore Kirk’s background, and how someone with a PhD in mathematical physics ends up going to work for Goldman Sachs; why computer programming is “today’s literacy”; standing out from the crowd; trend following in the European scene vs. America; weighting positions based on risk; talking to clients and explaining that losses are statistically inevitable; whether the demand for discretionary traders is waning; how discretionary traders look at a trader like Kirk who is 100% systematic; why discretionary intervention in a systematic trading strategy disqualifies it from being truly systematic; proving a strategy as broken rather than proving that it’s right; why randomness is everything; uncertainty and convictions about technique; capturing the realism of the world in your trading strategy; what actually benefits the economy, society, and the world; seeking client feedback and understanding a client’s drivers; and the importance of consistent marginal improvements. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 296.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel interviews both Gerd Gigerenzer and Brian Wansink on today’s podcast. Gigerenzer joins Covel for his second appearance on the podcast. He is currently director of the Center for Adaptive Behavior and Cognition (ABC) at the Max Planck Institute for Human Development and director of the Harding Center for Risk Literacy. Gigerenzer’s new book is Risk Savvy: How to Make Good Decisions. Covel and Gigerenzer discuss the differences between Daniel Kahneman and Gigerenzer’s views; heuristics vs. statistics; the notion of medical check-ups, prostate cancer, and the PSA test; taking risks, and instincts vs. expert advice; relative vs. absolute risk; Benjamin Franklin’s ledger, heuristics, and romance; intuition, facts, unconscious intelligence, and gut decisions; being risk savvy and ordering in upscale restaurants, why Risk Savvy is an alternative to many other outlooks; the two tools to being risk savvy; the gaze heuristic and athletics; complex problems and simple heuristics. Next, Covel speaks with Brian Wansink. Wansink is the John Dyson Professor of Marketing and the Director of the Cornell Food and Brand Lab in the Department of Applied Economics and Management at Cornell University. His newest book is Slim By Design. Covel and Wansink discuss weight and obesity; our genes and environment as an effect on our health; “doing what skinny people do” and studying buffets; modeling the behavior of slim people; the advantages of chopsticks; the power of the grocery shopper of the household; triggers and tips to avoid unhealthy behavior that happens in restaurants; correlations between where you sit in a restaurant and eating choices; the three types of people in the context of nutrition; the influence of the environment on our eating habits; being slim by design vs. being slim by willpower; pursuing happiness vs. pursuing a purpose. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 295.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Nigol Koulajian and Donald Wieczorek on today’s podcast--two separate interviews back to back. Nigol Koulajian's firm is Quest Partners, LLC and is approaching one billion AUM. Koulajian has a very interesting take on trend following--specifically his take on replicating famous trend following strategies. Koulajian and Covel discuss Koulajian’s background and entrepreneurism within Lebanese culture; how Koulajian got his start, and how he found his way into the systematic strategies he employs today; the influence of Van Tharp; the importance of practices like transcendental meditation and yoga on the mental side of trading and in the context of Koulajian’s work today as a fund manager. the S&P 500 as a trading system; crowd psychology; replication strategies; price action as a trigger for different strategies; volatility, volatility compression, and why volatility is not the way to measure risk in the markets anymore; the Flash Crash; and trend following as a hedge to equity risk. Next, Michael Covel speaks with Donald Wieczorek. Wieczorek’s firm is Purple Valley Capital. Covel and Wieczorek discuss Wieczorek’s early track record; Salem Abraham; drawdowns; Wieczorek’s first exposure to trend following; why losing early in your trading career can be a good thing; why you don’t need to predict market movement to make money; Jack Schwager and the Market Wizards series; and why systematic trading is more than just the technical system. Next, Covel and Wieczorek break apart some of Wieczorek’s monthly performance windows (trendfollowing.com/don.pdf), picking apart the psychology and context of certain months in Wieczorek’s career. Covel and Wieczorek continue on to talk about correlation between famous trend following traders; volatility and risk; and the value of crisis alpha. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 294.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel presents “The State Episode” featuring interviews with Doug Casey and Charles Hugh Smith. State power and central planning are two of the topics on today’s show, and both guests love taking a stab at the state. First, Michael Covel speaks with Doug Casey. Casey is the founder and chairman of Casey Research, a provider of paid subscription newsletter services espousing libertarian viewpoints as the justification for the purchase of highly speculative microcap stocks, precious metals, and other investments. Casey and Covel discuss what it’s like having traveled to over 175 countries and where one can find social and economic liberty today in this world; the advantages of being a perpetual tourist; why Casey describes himself as an anarchist; if whether there is a purpose anymore to voting in the United States of America; loyalty to the country where you were born; those who rule out the possibility of a financial panic in the future; quantitative easing and currency debasement; and what was the trigger for Casey’s turn at life as a global traveler. Next, Michael Covel speaks with Charles Hugh Smith. Smith is an American writer and blogger. He is the chief writer for the site "Of Two Minds". Started in 2005, this site has been listed No. 7 in CNBC's top alternative financial sites. Smith's economic works stress the value and efficacy of decentralizing power and wealth, the individual's power of self-determination and the value of community, which in his view has been diminished by the state. Smith and Covel discuss how winners and are being selected by the state as exemplified by the 2008 financial crisis; alliances between corporations and the state; why there might be an uproar if equity markets were not at all-time highs; what happens when the typical wage earner can no longer substitute debt for earned income; stagnant wages and tradable labor; building your life around non state controlled opportunities; the decentralization of power and wealth; and the reliance on secrecy in politics to avoid accountability. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 293.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Christopher Cruden on today’s podcast. Cruden has been in the trend following space for over 25 years. In 1988 he became a Director of Adam, Harding and Lueck Asset Management Ltd (AHL) in London, a famed trend following shop. He is currently the head of Insch Capital Management. Covel and Cruden discuss why price is an unimpeachable fact; early “lightbulb” moments that brought Cruden to the style of trading he practices today; the notion of going currency only; why Cruden’s program is akin to a raincoat in bad weather; riding increased volatility and increased directional trending; getting clients to understand that you cannot force a system to make money; benchmark selection and time period selection; why the S&P 500 is a trading system; performance drivers; the duration of trades; why if you can’t measure it, you can’t manage it; how Cruden’s strategy would change if Europe reverted back to before the introduction of the Euro; how markets teach humility; why Cruden only trades once a day. For more information on Christopher Cruden, go to inschinvest.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 292.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Steven Kotler. Kotler is an American bestselling author, journalist, and entrepreneur. His articles have appeared in over 70 publications, including The New York Times Magazine, LA Times, Wired, GQ, Discover, Popular Science, Outside, Men’s Journal, Details and National Geographic Adventure. He is best known for his non-fiction books, including the New York Times bestseller Abundance, A Small Furry Prayer, and West of Jesus. His new book is The Rise of Superman. Covel starts off with a personal anecdote about his experiences with 'flow', and Kotler goes onto explain the topic based on Covel’s experiences. Covel and Kotler also discuss synonyms for flow; flow in basketball and other sports; group flow; pattern recognition; the neurological explanation for flow; the four stages of flow; why flow is not just a binary state; spiritual experiences compared to flow states; brain activity during flow states; the “deep now”; getting to the flow state with drugs; the flow state and the act of being on stage; why you need to take risks to get into flow; social fear, risk, and pain vs. physical fear, risk, and pain; method acting, screen presence, and flow; the military and flow research; risk and comfort; the balance between challenges and skills; getting comfortable with being uncomfortable; the fight or flight mindset; and future research into flow. For more information on Steven Kotler, visit flowgenomeproject.co. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 291.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Mark Rzepczynski. Rzepczynski is a Founder and Chief Investment Officer at AMPHI Capital Management. Prior to co-founding AMPHI Capital Management, he was the CEO of the Fund Group at FourWinds Capital Management, where he oversaw alternative investments. Rzepczynski was also President and Chief Investment Officer at John W. Henry & Co., an iconic Commodity Trading Advisor. He is on the Advisory Board of the Chartered Alternative Investment Analyst Association (CAIA), the Associate Editor of the Journal of Alternative Investments, and a former board member of the FIA Futures Industry Association. Covel and Rzepczynski discuss the advantages of podcasting as a format over traditional media outlets; why prices are “primal”; prices as a heuristic; Rzepczynski’s ah-ha moment that brought him to the heuristic of price; why a complex education doesn’t necessarily mean you should use a complex system; why knowing the reasoning behind price movement is unnecessary; VUCA: volatile, uncertain, complex, and ambiguous; VUCA in the context of portfolio management; the zen of trading and portfolio management; the importance of passion in investing; the notion of over-diversification; dynamic allocation; convergent vs. divergent; the improbability principle; tail events and preparing for the unexpected; the notion of systematic vs. discretionary; how trend following is represented in the mainstream media; complexity; risk and return; volatility and complacency. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 290.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Alex Tabarrok and David Nott on today’s two-part podcast, which Covel affectionately calls “The Libertarian Episode”. First, Covel speaks with Alex Tabarrok, co-author of the Marginal Revolution website. He’s an economist at Covel’s alma mater, George Mason University. Covel and Tabarrok discuss China and the importance of teaching Chinese to American children; the greatest anti-poverty program in the world; the difficulty of improving the infrastructure of the United States; regulation and innovation; interest groups; benevolent dictators; the need for a democracy in an information age; innovation in the current American education system; why the American education system is focused on getting you to work for the man; women in the American education system; innovation, intellectual property and patents; the cumulative properties of innovation; grounds for optimism in the United States when it comes to innovation; how George Mason University became a libertarian economist hotspot; if Europe is following the path of Japan; why the European monetary union was a mistake; and why travel can create optimism. Next, Covel speaks with David Nott, president of The Reason Foundation--an organization that is all about free minds and free markets. Covel and Nott discuss The Reason Foundation and what it means to be a libertarian today; how Nott explains being a libertarian to people; how the actor and comedian Drew Carey came to be involved with The Reason Foundation; finding the optimism to stay focused on swaying people to the founding principles of our country; politics in China; the 2008 financial crisis, state control, and Reason’s response to the bailouts; common sense notions; pension reform; drug policy reform; the cultural policies surrounding prohibition; expanding the idea of liberty to younger people; Vernon Smith and Walter Williams. For more information on The Reason Foundation visit reason.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 289.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel interviews Frank Curzio and Robin Griffiths. First, Covel speaks with Frank Curzio of Stansberry & Associates. Covel and Curzio discuss how the fundamental guys justify all time highs in the equity market; the Shiller PE ratio; the importance of analyzing interest rates; Warren Buffett recent investments; what the Fed would do if we went down 30% today; why having a low interest rate environment creates a good situation for stocks; being prepared from a risk management perspective; Zero Interest Rate Policy, its effect on equities and bonds, and tail risk; comparing the environment today to the 1987 crash; hypothetical situations surrounding the S&P 500; exit strategies; and the 24-hour news cycle. Next, Covel interviews Robin Griffiths, Chief Technical Strategist at ECU and formerly at HSBC. Griffiths comes at it from a technical perspective. Covel and Griffiths discuss how to use fundamentals in an age when interest rates are artificially controlled; Griffiths’ history as a mechanical engineer and how he found his way into trading and technical analysis; regression analysis; Elliott Wave and cycles; the idea of whipsaws; geopolitical risks; China, India, and the rise of Asia; not trading off of geopolitical fundamental information; how Griffiths came to the conclusion that the efficient market hypothesis and much of what the mutual fund industry depends on doesn’t hold water; spikes and why people in 2014 think that all spikes are gone; Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay and the cyclical nature of booms and busts; and virtual currencies. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 288.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Toby Crabel of Crabel Capital Management. Covel first reached out to Crabel, who is a short term systematic trader, in 2005. Crabel’s approach is very different from Covel’s, but there are some commonalities: price action driven, systems, models, risk management. But Crabel is working on a whole different time frame, turning his portfolio over typically in less than a day. Crabel, a former pro tennis player, has a philosophical nature and discusses how he executes these philosophies in the trading world. Crabel and Covel discuss Crabel’s history as a pro tennis player and the connection between tennis and the drive he has in the asset management field today; longevity and consistency in tennis and trading; where Crabel stands with the total number of systems he employs; the source of Crabel’s profits and the philosophy behind it; price action; winning and losing volatility; why Crabel needs price movement and volume; the idea of price shocks and the importance of being aware of them; the process of moving from high drawdowns to a much lower drawdown; the importance of diversity; early lightbulb moments that informed Crabel’s trading style; Crabel’s experience with Victor Niederhoffer; how the philosophy of Objectivism has informed Crabel’s life; the liquidity of futures markets; and the importance of persistence. For more information on Toby Crabel, visit crabel.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 287.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Alex Greyserman. Greyserman is Chief Scientist at managed futures firm ISAM. He is also a professor at Columbia University. Greyserman’s new book with previous podcast guest Kathryn Kaminski is titled Trend Following With Managed Futures. Covel and Greyserman discuss the idea of young college graduates writing articles about the death of trend following while firms like Greyserman’s continue to have tremendous success; alternatives to thinking only 'long stocks'; Greyserman’s first meeting with Larry Hite and how they have come to have such a career together; why trend following is about more than getting on the right side of the S&P trade; the difference between cross-sectional momentum and time series momentum; the phrase “crisis alpha” and why trend following does well in times of crisis; the cost of not having trend following in your portfolio; benchmarking and diversification; why the worst thing you can do is “trend follow a trend follower”; the science of trend following; speculation; trend following your life--not just the markets; dispersion among trend following traders; and the effect of a higher rate environment. For more information on Alex Greyserman, go to isam.com or visit Amazon to find his book with Kathryn Kaminski, Trend Following with Managed Futures. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 286.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel speaks with Anthony Todd. Todd is the CEO of Aspect Capital, one of the most successful managed futures trend following firms. Todd co-founded Aspect in September 1997. Before that, he was with AHL. Covel and Todd discuss why prices aren’t random; finding an inefficiency that the academic financial community refuses to acknowledge; the idea of “predictable” patterns in the market; the desire to know static positions; how crowd behavior drives trends; addressing misconceptions; using fundamentals in a systematic way; defining Todd’s medium-term style of trend following; why “it’s less about the genius of the trade and more about the repeatability of the approach”; how long you can be in a particular market before you give up on it; client understanding of trend following drawdowns; the phraseology of “crisis alpha”; the culture that Todd has built at Aspect; and Todd’s advice to young entrepreneurs. For more information on Anthony Todd, visit aspectcapital.com. Receive complimentary trend following DVD: trendfollowing.com/win.

Direct download: 285.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel speaks with Jason Fried. Fried is the founder and CEO of Basecamp (formerly 37Signals). Fried is also the co-author of the book Rework, which is about new ways to conceptualize working and creating. Fried and Covel discuss the first dollar Fried made online and other formative experiences; keeping business simple; making something more valuable than the dollars people give you; the intimacy of exchanging money; the idea of doing less than your competitors to beat them; building an audience; the “real world”; why an MBA program might not teach you much about entrepreneurism; corporate structure; focusing on what will not change; zen and the moment of right now; not focusing too far into the future; Fried’s experience with Jeff Bezos; and the idea of improvisation or “winging it” in business. For more information on Jason Fried, visit basecamp.com or follow him on Twitter at @jasonfried. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 284.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel interviews Roland Austrup. Austrup is Chief Executive Officer and Chief Investment Officer at Integrated managed Futures, part of the IAM group out of Canada. Austrup’s firm comes at trading from a slightly different perspective: very systematic, but also using fundamentals systematically. Austrup and Covel discuss how Austrup got started in the industry, and whether he was always a “quant” thinker; early experiences with Ed Seykota; whether Austrup uses a systematic use of fundamentals or a discretionary use of fundamentals; why systematic can be frightening to certain people; managing risk and the return to risk profile; why Austrup targets a downside volatility of 13%; why “the returns will take care of themselves” if you manage risk correctly; trading trends and not market noise; being on the right side of a trend; the phrase “equity-like returns”; reviewing trend following performance in recent years; why Austrup’s strategy is not based on prediction; the importance of a broadly diversified portfolio; lack of correlation to traditional long-only equities strategies; and the current low rate environment. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 283.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Kathryn Kaminski on today’s podcast. Kaminski is deputy managing director the institute for financial research (SIFR) Stockholm Sweden. She’s also a contributor to CME Group. She earned her PhD at the MIT Sloan School of Management. At the MIT Laboratory for Financial Engineering, she conducted research on financial heuristics in collaboration with Professor Andrew W. Lo. Her new book, with Alex Greyserman, is "Trend Following with Managed Futures: The Search for Crisis Alpha.". Covel and Kaminski discuss survivorship bias; Kaminski’s background and upbringing; convergent risk-taking strategies and divergent risk-taking strategies; social networking as an example of risk; Apple as an example of convergent/divergent; the importance of failure; the efficient market hypothesis, the idea that trend following is “voodoo”, and the lack of transparency in trend following; critics of trend following; Kaminski’s “ah-ha” moment with trend following; why trend following works in times of crisis; the adaptive markets hypothesis; looking at markets like ecologies; divergence and “punctured equilibrium”; the process of going back 800 years analyzing trend following; the idea of black boxes; and the acceptance of trend following. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 282.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Vineer Bhansali on today’s podcast. Bhansali is a managing director and portfolio manager at PIMCO. His most recent book is "Tail Risk Hedging". He has 24 years of investment experience and holds a Ph.D. in theoretical particle physics from Harvard University. His new white paper is out titled “Trend Following Through The Rates Cycle”. Covel and Bhansali discuss “Trend Following Through The Rates Cycle”; trend following in the classical sense; how trend following started to become part of the discussion at PIMCO; introducing new ideas to PIMCO, corporate culture, and to clients; the three hypotheses tested in “Trend Following Through The Rates Cycle”; currency trading and trend following returns; why larger trend following shops may have trouble getting into smaller markets; trend following across a diversified portfolio and classical trend following approaches; connecting Bhansali’s hobbies to the quantitative world; structure and thinking in terms of code; imagining and building simulations; being distribution aware; and why being at all-time highs is not the time to feel satisfied. To read “Trend Following Through The Rates Cycle”, visit PIMCO. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 281.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel talks with Joey Reiman and John Brenkus on today’s podcast. First, Joey Reiman, who runs Brighthouse, has been called the “father of ideation”. He’s emerged as the subject matter expert in the area of purpose inspired leadership, marketing, and innovation. His breakthrough purpose methodology and frameworks have been adopted by the likes of the Boston Consulting Group, Procter & Gamble, The Coca-Cola Company, McDonald’s, KPMG, and many other Fortune 500 companies across the globe. As an adjunct professor at the Goizueta School of Business at Emory University, he teaches tomorrow’s executives his revolutionary theories and applications for purpose-inspired profit. Covel and Reiman discuss Reiman’s background and mission in life; looking for meaning; figuring out your “why”; the process of teaching, and the areas where certain people may get tripped up; looking back to your beginnings; the destructiveness of outside voices; calmness and contemplation; solitude vs. aloneness; “money doesn’t create ideas--ideas create money”; why daydreaming isn’t necessarily a bad thing; creativity and environments; changing the world through changing your routine; routine and creativity; thinking with your heart as much as your mind; Apple vs. Google; raw talent, creativity, and environment; lucky people and “yes” people; the power of “slow”; and the importance of storytelling. The second part of this episode is with John Brenkus. Brenkus is the host of the ESPN show, Sport Science. Sport Science is an ongoing television series that explores the science and engineering underlying athletic endeavors. Anything about statistics and science has the potential to inspire Covel and with John Brenkus, he goes straight into it; Also discussed: what triggered the science and sports connection in Brenkus’ brain; science and martial arts; measuring human performance; why success doesn’t follow a straight line; Brenkus’ college experiences and how they are relevant to his work today; the idea of physical limits being reached; why Brenkus became a crash test dummy; the advantage of applying science to any aspect of life; and the Iron Man competition. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 280.mp3
Category:general -- posted at: 9:17am EST

Michael Covel speaks with Mark Broadie. Broadie is the Carson Family Professor of Business and Vice Dean at the Columbia Business School. His research focuses on quantitative finance and sports analytics. His golf research has appeared in academic journals and many golf publications. He developed the new strokes gained approach to analyze the performance of amateur and professional golfers and worked with the PGA Tour on their implementation of the strokes gained putting stat. His newest book is called Every Shot Counts. Covel says: We all know about Moneyball. It looks like Broadie has carved out that niche for himself in golf science. Covel isn’t a huge golf fan, but when it comes to sports and science and statistics, Covel sees the trend following parallels. Covel and Broadie discuss how he became, in Covel’s words, the “Bill James of golf”; how Broadie connected his finance work to the sport of golf; why certain golfers win; why approach shots are the most important; “drive for show, putt for dough”; how Broadie started, the software he used, and how he got better data; whether Broadie had any sense of where the data might go when he first collected it; power as a separator; the connection between sports anaylitics, business analytics, and investing; the psychology of golf; first putts vs. second putts; the world golf rankings, and how these can be fixed. For more information on Mark Broadie, visit everyshotcounts.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 279.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Larry Swedroe on today’s podcast. Swedroe is a Buckingham Asset Management principal. He is also a principal and co-founder of BAM Advisor Services, LLC, and serves as the director of research for both entities. Swedroe has authored or co-authored fourteen books and comes at investing from an evidence-based approach. Covel and Swedroe have different vantage points, but there are some commonalities in their thinking. They discuss forecasters and prediction; the three types of forecasters; confirmation bias; how your political affiliation might change your willingness to listen to forecasts; value perspective vs. momentum perspective; the anomaly of momentum; the evidence-based thinking approach; momentum trading in 2008; how Swedroe prepares for the unexpected; not treating the unlikely like it’s impossible; managing your risk; process vs. outcome; the equity risk premium and bear markets; commonplace crises; planning ahead; and diversification attempts to get outside of equities. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 278.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel opens up relating a Bob Dylan lyric to uncertainty. You can’t tell what’s going to happen tomorrow; you can’t tell what’s going to happen to people in your life. You can just go with it--you can just keep on keeping on. But predicting tomorrow, thinking that you have an explanation as to how it’s going to actually unfold? You’re kidding yourself if you think you can predict tomorrow. People are paid a lot of money to pretend that they can predict tomorrow. But it is pretending, no doubt about it. Covel moves into his main topic for the day, noting that since March of 2009, stocks have taken off. It’s a massive trend--a trend following dream for stocks. Covel also sees that the fundamental guys look at the all-time highs with justifications. Trend followers have no justifications. There have been millions of words since March of 2009 written by fundamental traders justifying the all-time highs, and people get paid a lot of money to write these justifications. What will all those words count for if the S&P makes another 50% drop? How do you make a fundamental decision in the face of a game where fundamentally, the only thing you really have is “can you predict what the Federal Reserve will do next?” Covel also shares some words of wisdom from trend following trader Jerry Parker that he obtained through a recent email, as well as words from Tom Basso and David Cheval. These traders all agree on one thing: ride the trend. Building on these thoughts, Covel moves into talking about football, Chip Kelly, the Philadelphia Eagles, Hal Mumme, and Mike Leach. Covel uses this as a metaphor for why you can’t be a trend following trader in one market alone. So, if you can’t predict tomorrow, what can you do? You can take what’s given. You can take the trend that arrives. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 277.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Richard Lewis. Lewis is the author of When Cultures Collide and When Teams Collide. He is a cross-cultural expert who has been studying language and communication his entire career. He’s traveled to 130+ countries and speaks eleven different languages. Why have a language and communications expert on a trend following trading show? Covel explains: We live in a complete and real world. You’re not just a trend following robot. There are many facets to life and the ability to communicate can’t be ignored. Covel and Lewis discuss how Lewis’ love affair with language started; the best way to start learning a language; travel as a “magic elixir” of sorts; the Lewis model; cultural differences in language, and what Lewis means by linear-active, multi-active, and reactive; the idea of losing face in the context of cross-cultural communication; microculture and macroculture; cross-cultural teams vs. homogenous teams; normal and abnormal in a cultural context; paperwork and punctuality in different cultures; why the linear-active person confronts with logic, the multi-active person confronts emotionally, and the reactive person is never confronting; and why there’s much more to making a deal than just quantity and price. Want a free trend following DVD? Go to www.trendfollowing.com/win.

Direct download: 276.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Joel Mokyr on today’s podcast. Marc Andreessen, one of the founders of Netscape, tweeted that Mokyr was one of his heroes. This intrigued Covel, and hence his desire to have Mokyr on the show. Mokyr is a economic historian at Northwestern University. He focuses on technological progress, and how it affects growth. From Mokyr’s perspective, we haven’t seen anything yet. He’s not trying to predict what will happen next; he’s just confident and ready that big things will continue to happen. Covel and Mokyr define technology; the notion of playing God with technology; how technology and economic growth are intertwined; why screwing up is part of technology; the acceleration of technology; new ways of measuring growth; anesthesia and antibiotics as technologies and imagining new technologies as revolutionary as them; moving from a wheat and steel economy into an information economy; the factory, the separation between firm and household, and the Industrial Revolution; the death of distance; why technology is often not reflected in the GDP; solving the language barrier through technology; why the global acceptance of the English language is driven by technology; why innovation isn’t natural to us; the declining respect of the writings of previous generations; why the median age will continue to increase; why we are moving into a mass-customization society; changes in material science; and the best way to think about the future. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 275.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel welcomes Guy Kawasaki. For those of you that pay attention to being an entrepreneur, Kawasaki’s books have been invaluable over the last decade. Currently, he is the chief evangelist of Canva, an online graphic design tool. Formerly, he was an advisor to the Motorola business unit of Google and chief evangelist of Apple. Covel and Kawasaki discuss a lesson learned from Steve Jobs: “Some things need to be believed to be seen.” Covel and Kawasaki also discuss why being a consultant or an investment banker are two of the worst first jobs you can get; working in sales, and Kawasaki’s early experience in the jewelry business; some of the most valuable attributes of a good salesman; marketing, social media, and why you’d want to have a rabid fan with fifteen followers rather than just another blurb on the back of your book from the so-called big name; why a book review in The New York Times isn’t as important as it used to be; the Amazon and Hachette conflict, and why Amazon is still the best thing to happen to authors in a long time; the two types of people in the world--baker vs. eater; how Kawasaki manages his time; looking at your social media presence as core to your existence; disruptive high growth opportunities; introversion and getting better at standing on stage. For more information on Guy Kawasaki, follow him on Google Plus. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 274.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel speaks with Rande Howell. Sometimes new and experienced traders only want to focus on the system--the rules. They forget the psychology and the mental aspects of trading. Howell has a therapeutic background combined with personal coaching in the fields of human potential and leadership. He has fifteen years of practice as a licensed professional counselor with a Masters in Counseling. Covel notes: if your mind is messed up, it doesn’t matter what system you have--you’re going to fail. Covel and Howell present an interesting conversation to get you in the spirit of the mind. Their topics include what the performance mind is in regards to trading; trading, emotions, and uncertainty; why irrational pessimism is deadly in trading; emotional regulation and mastering emotions; the blurry line between the casino and trading, particularly in Asia; euphoria vs. fear in a trading context; why what you’re afraid of owns you; Jungian archetypes; the Myers-Briggs instrument; biological threat vs. psychological discomfort; the mistake of using trading to measure your worth; getting your emotions right but your strategy wrong; why success in one endeavor doesn’t necessarily mean success in trading; the importance of patience; and the panther vs. the African lion. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 273.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Dan Buettner and John Ratey on today’s podcast. In this two part episode, Covel explains that these two individual’s research is as important for your investing, trading, and entrepreneurial success as any one system, technique, or way of living you might have. Buettner is an American explorer, educator, author and public speaker. He holds world records for endurance bicycling. He is also involved in “blue zone” research and looks at demographics and longevity. John J. Ratey, MD, is an Associate Clinical Professor of Psychiatry at Harvard Medical School, research synthesizer, speaker, and best selling author. His book is called Spark: The Revolutionary New Science Of Exercise In The Brain. Bottom line, everything in your life can change with exercise. If you want to be a fantastic investor, trader, or entrepreneur and your body and mind is not in shape, you have to take a second look. With Buettner, Covel explores age and longevity; “blue zones”; epiphanies and lightbulb moments; “forgetting to die”; loneliness; stress; sacred daily rituals; napping and happy hour; sacred places; relationships and sex. For more information on Dan Buettner go to bluezones.com. With Ratey, Covel discusses exercise as the magic elixir for the brain; prescription drugs and anti-depressants; the joy of movement; exercising the mind; autism; BDNF (brain-derived neuropathic factor); and ADHD and exercise in children. For more information about John Ratey, go to johnratey.com. Want a free trend following DVD? Go to trendfollowing.com/win.  

Direct download: 272.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel starts off today’s podcast by playing “Soothe Me”, a classic song. There’s no doubt about it: it’s soothing to have all-time highs in the equity market. Today, Covel wants a different perspective from what is out there in mainstream media. First, Covel talks about the S&P 500 index. The S&P is a trading system. It is a specific grouping of stocks put together with certain weightings and certain rules, and it trades in a certain way. And it has to stick to those rules. Covel talks about how the S&P is a system despite most people not knowing that it is one. Covel compares this system to a trend following system (and notes how trend following is applicable to stocks too). Covel talks about the dangers of correlation if you apply your trend following strategy to only equities, and the importance of diversification across different markets. Next, Covel looks at the S&P system vs. trend following systems in the context of crisis, and questions where the S&P would be without zero interest rate policy and Fed intervention. Is the S&P trading system that good that it will be at all time highs forever? Covel moves on to talk about black swans and anti-fragility in the context of the S&P trading system. Finishing up, Covel discusses absolute risk and relative risk. Want a free trend following DVD? Go to trendfollowing.com/win. 

Direct download: 271.mp3
Category:general -- posted at: 11:16pm EST

Michael Covel speaks with Laurie Santos on today’s podcast. Santos is a professor of psychology and cognitive sciences at Yale University. Her research explores the evolutionary origins of the human mind by comparing the cognitive abilities of human and non-human primates. Santos is able to look at monkeys and their behavior in markets and money, and see the similarities with humans. Covel and Santos discuss some of Santos’ early “ah-ha” moments; teaching monkeys about currencies; whether the monkey economy is as irrational as ours; the endowment effect; how monkeys’ behavior in markets quantitatively matches human behavior; whether some monkeys took to the experimental economy better than others; mistakes and predictable errors; why humans might be uniquely irrational when it comes to enjoying what we pay more for; Vernon Smith’s work; relationships between Santos’ work and the financial crisis of 2008; bubbles, monkeys, and Daniel Kahneman; the “G.I. Joe fallacy”; and why we have trouble accepting cognitive limitations rather than our biological limitations. For more information on Laurie Santos visit www.yale.edu/caplab. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 270.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel welcomes Robert Aumann the fourth individual that has received a Nobel Prize in economics to appear on his podcast. Covel and Aumann discuss conflict and cooperation through game theory analysis; Aumann has a very interesting way of looking at the world via his game theory perspective. Aumann and Covel talk about his first experience meeting John Nash and Aumann’s early background; what game theory is trying to accomplish; the economic definition of rationality; the idea of a strategy matrix; the world champions of peace and the best way to maintain peace; the 2008-09 bailouts from Aumann’s perspective and a game theory outlook; behavioral economics; game theory, diplomats, and the Cuban Missile Crisis; the existence of nuclear weapons and the Cold War. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 269.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Gregory Morris on today’s podcast. Morris is Sr. Vice President, Chief Technical Analyst, and Chairman of the Investment Committee for Stadion Money Management, LLC. He also serves as the chairman of the Station Trust Board. In this capacity Greg educates institutional and individual clients on the merits of technical analysis and why Stadion utilizes a technical rules-based model. Greg oversees the management of over $5.5 Billion in assets in six mutual funds, separate accounts, and retirement plans. Investing With The Trend is his new book. Covel and Morris discuss Morris’ history as a US Navy fighter pilot; the checklist and how foundational it is to trading; how Morris had his first exposure and understanding of technical analysis; Russian Roulette and trading; risk vs. uncertainty; process and predictions; having a set of daily actions; and learning lessons through failure. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 268.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Dennis Gartman on today’s podcast. Gartman is the editor and publisher of The Gartman Letter. Gartman appears on CNBC, ROB-TV and Bloomberg television, discussing commodities and the capital markets, and speaks before various associations and trade groups around the world. Covel and Gartman discuss how Gartman first got started; Chicago trading in the late 70’s to the mid 80’s; why you should never add to a losing position; buying strength and selling weakness; systems from Gartman’s perspective, and keeping your systems simple; being patient with winning trades and impatient with losers; Gartman’s daily grind and process; mass psychology, efficient markets, and behavioral economics; Gartman’s thoughts on the market today and geopolitical events; and how we hear about geopolitical events today compared to the past. For more information on Dennis Gartman, visit thegartmanletter.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 267.mp3
Category:general -- posted at: 1:29am EST

Michael Covel opens up today’s monologue by talking about a music video that he thinks sums up today’s society. Next, Covel highlights a clip of David Harding talking to CNBC. Covel highlights some of the past issues Harding has seen in talking to CNBC and plays the clip. Covel discusses the history of trend following and some of the core big-picture ideas employed by traders like David Harding, Larry Hite, Ed Seykota, Bill Dunn, and others. Covel moves into a Twitter discussion he had recently where he posted a Bloomberg article featuring the most misinformed description of trend following he’d seen yet. When the author responded on Twitter, sparks flew. Covel talks about the lessons learned by the exchange: it’s a great opportunity to clarify what trend following trading is, the question of where one makes their money from, and academic chops. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 266.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel talks with Leo Melamed on today’s podcast. Melamed is a pioneer of financial futures, currencies, and stock indexes. Melamed became Chairman of the Chicago Mercantile Exchange in 1969. In 1972, under his leadership, the CME created the International Monetary Market (IMM), the world's first financial futures exchange, and launched currency futures. He is currently Chairman Emeritus of CME Group (formerly the Chicago Mercantile Exchange). Melamed is also the author of Escape To The Futures. Covel and Melamed discuss overcoming odds; China’s futures markets; the middle class in China; Melamed’s experience meeting Milton Friedman and some of the lessons learned; Melamed’s early experiences escaping Nazi-controlled Poland, and eventually going to work for Merrill Lynch; stock futures; and the importance of speculation. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 265.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel talks with John H. Cochrane on today’s podcast. Cochrane is the AQR Capital Management Distinguished Service Professor of Finance at the University of Chicago Booth School of Business. Covel and Cochrane cover wide territory today. Covel and Cochrane discuss Warren Buffett’s quote that he “would have made a fortune” if the banks weren’t bailed out; crony capitalism; why “a good Bear failure may have saved us from a bad Lehman failure”; the cost of regulation; Uber, taxi service, and regulation; why commodities keep getting cheaper and cheaper, but people with expertise keep getting more and more expensive; the idea of discretion; and healthcare. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 264.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Meir Statman on today’s podcast. Statman is a professor of finance at Santa Clara University and a behavioral finance expert. His acclaimed book is titled "What Investors Really Want." Covel and Statman discuss how we make decisions, and how these decisions are reflected in markets; what investors want besides the utilitarian aspect of money; philanthropy and status; why Madoff’s clients’ own greed helped them fall into a trap; envy and happiness; the fear of losing and the fear of missing out; mental accounting; Statman’s drivers and early influences; libertarianism vs. paternalism; Social Security and mandatory retirement savings. For more information on Meir Statman, visit http://www.scu.edu/business/finance/faculty/statman.cfm. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 263.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Terry Burnham on today’s podcast. Burnham is an economist who studies the biological and evolutionary basis of human behavior. He wrote "Mean Markets and Lizard Brains". Covel and Burnham discuss why Burnham removed $1 million from his Bank of America account and said “I don’t trust the banks”; the two ways to think about risk; separating the ideas of luck and skill; the lizard brain and how it relates back to our choices; a story about interacting with Paul Tudor Jones; why markets have momentum; the great driver of conformity; rationality and irrationality; captive chimps vs. chimps in the wild and the differences in behavior; predicting when the Fed will step in; thinking of the worst case scenario for equities and looking to Japan for an example; and negative interest rates. For more information on Terry Burnham, go to terryburnham.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 262.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel talks with Andy Puddicombe on today’s podcast. Puddicombe is the founder of Headspace, an award-winning digital health platform that provides guided meditation sessions. Puddicombe is a former Buddhist monk with a degree in Circus Arts. Covel and Puddicombe discuss Puddicombe’s background and how he came into the position he is in today; some traumatic events which may have had an influence on Puddicombe’s decision to become a monk; Covel’s own meditation experience; comparing mindfulness and meditation; the importance of a daily practice; stress and the science behind meditation; neuroplasticity; the wandering mind and unhappiness; the idea of the present moment, and how traders that embrace the present moment have an advantage; and intuition. For more information on Andy Puddicombe, go to headspace.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 261.mp3
Category:general -- posted at: 10:00pm EST

Today on the podcast, Michael Covel speaks with Sally Hogshead. She’s an American speaker, author, former advertising executive, as well as the Chief Executive Officer of Fascinate, Inc. Hogshead’s newest book is "How The World Sees You: Discover Your Highest Value Through The Science of Fascination". Covel and Hogshead discuss fascination and paying attention; the seven different categories of things that fascinate us; what those who fascinate have in common; developing a personality assessment that shows how the world sees you; understanding your own personal branding; analyzing Michael Covel’s own fascination survey; not being a commodity; why if you’re not generating a negative reaction from someone, you’re probably not fascinating anyone; why you don’t want to be vanilla ice cream. To take the Fascination Advantage test for free, go to howtheworldseesyou.com/you and enter the code “trendfollowing”. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 260.mp3
Category:general -- posted at: 7:00pm EST

Michael Covel speaks with Bucky Isaacson on today’s podcast. Isaacson is one of the early pioneers of managed futures. In 1969, he helped to develop one of the first computerized trading systems. He’s been involved in the managed futures industry ever since, particularly in Asia and the US. Covel and Isaacson talk about the fractured state of conferences these days; what it was like to be involved with a group developing a computerized trading system in 1969; being with one of the earliest incarnations of a managed futures firm; trading attitudes; marketing and doing business in Asia; differences in business practices between Asian countries; Refco, MF Global, PFG and other aberrations that have damaged the Chicago futures brand; Madoff as a marketer; raising the initial capital to start a trading venture; how to differentiate yourself from a marketing perspective; and growth in the managed futures industry. For more information on Bucky Isaacson, visit CTAExpo.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 259.mp3
Category:general -- posted at: 8:31am EST

Michael Covel speaks with Megan McArdle on today’s podcast. McArdle is a Bloomberg View columnist who writes on economics, business and public policy. She is the author of "The Up Side of Down: Why Failing Well Is the Key to Success”. She founded the blog "Asymmetrical Information”. Covel and McArdle discuss “trophy kids” and taking the monkey bars away; the idea of a regulator out there trying to guarantee our safety; why the companies that make it aren’t the ones with the best strategic plan--it’s the ones that execute (and fail well); the power of experimentation; Nobel winner Vernon Smith and experimentation; the idea of learning in crisis; how sunk costs are difficult for a large part of the population to grasp; Van Halen, errors, and M&M’s; normative error; small, manageable risks; forager morality vs. farmer morality; and a story about Kentucky Fried Chicken (KFC). Megan McArdle can be found on Twitter at @asymmetricinfo. Want a free trend following DVD: trendfollowing.com/win.

Direct download: 258.mp3
Category:general -- posted at: 7:14pm EST

Michael Covel speaks with Cullen Roche. Roche is the founder of Orcam Financial Group, a financial services company based out of San Diego. He also runs a very well-known blog called Pragmatic Capitalism (pragcap.com). His new book, Pragmatic Capitalism, was just released. Roche takes apart the soundbites of the media and gets at how things really work. Covel and Roche talk about entrepreneurism; investing in yourself; the advantages of starting a blog; why the word “pragmatic” is a word that has become central to Roche’s universe; eliminating your biases; why the US going bankrupt is a myth; the myth that central banks exist to enrich bankers; Dr. Laurie Santos and her work with monkeys; bringing risk down to something we can measure; Warren Buffett; and hedging your bets. For more information on Cullen Roche, visit pragcap.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 257.mp3
Category:general -- posted at: 8:34pm EST

Today on the podcast, Michael Covel speaks with Mike Harris. Harris is President of Campbell & Company (3B AUM), the systematic trading firm started by Keith Campbell (Campbell was featured in Covel’s first book Trend Following). Covel and Harris discuss systematic trading in the early 70’s; education about managed futures; correlation with other markets and managers; trading diverse markets; focusing on data rather than the fundamentals; why “commodities” and “CTA” are misnomers; why Harris wouldn’t fly down to Brazil to investigate fundamental information on the coffee market; risk management, drawdowns, and taking small losses; dealing with uncertainty and helping clients to understand the uncertain nature of trading; how human emotion often gets in the way of profitable trading; the efficient market hypothesis and behavioral finance; continuity and how that has been thought through at Campbell & Company; the Sharpe ratio and why it isn’t the best way to look at systematic traders; and why being defensive is central to being a great absolute return trader. For more information on Campbell & Company, visit campbell.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 256.mp3
Category:general -- posted at: 10:13pm EST

Today on the show, Michael Covel speaks with Tyler Cowen. Cowen is an American economist, academic, and writer. He’s the co-author of the popular economics blog Marginal Revolution. Covel and Cowen discuss Sabermetrics and the new idea that we will be judged by numbers; Cowen’s early experience studying under Nobel Prize winner Thomas Schelling; the notion of thinking in terms of paradoxes; why we’re moving from the 1% to the 15%; “average is over” and why Singapore and Israel are the two places in the world where this has come true first; problems because of “average is over” in Singapore; pure free markets; thinking about why past regulations have failed; how computers change us; globalization, where things are headed, and what we should be prepared for; zero marginal product workers. For more information on Tyler Cowen, go to marginalrevolution.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 255.mp3
Category:general -- posted at: 6:26pm EST

Michael Covel speaks with William Poundstone. Poundstone is the author of Fortune’s Formula, a book about the Kelly criterion. This is risk management at its heart. All great trend traders have had to deal with Kelly. Covel and Poundstone discuss Claude Shannon; the connection between Al Capone, the Kelly formula, bookmaking, and the telephone industry; Bell Labs and information theory; why, when betting, if there’s a small chance of losing everything, you will eventually lose everything; criticisms of the Kelly criterion; Ed Thorp, blackjack, and card counting; Long-Term Capital Management; Martingale vs. Kelly; and early development of the Black-Scholes formula. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 254.mp3
Category:general -- posted at: 1:13am EST

Today on the podcast Michael Covel speaks with Perry Kaufman. Kaufman is an American systematic trader, index developer, and quantitative financial theorist. He is considered a leading expert in the development of fully algorithmic trading programs. Covel and Kaufman discuss how Kaufman came to the idea of 100% algorithmic trading systems; the difference between being systematic and being automated; optimization vs. validation; the biggest advantages of testing; why discretion is not part of Kaufman’s toolbox; the problem of tail events; why discipline is the most important characteristic of a systematic trader; the “loose pants fit everyone” philosophy; preparing yourself for uncertainty; comparisons between risk management and risk measurement; the Sharpe ratio; high volatility trades vs. low volatility; why Kaufman places equal weight on both risk management and the underlying system; and systematic trading in established mature markets vs. emerging markets. For more information on Perry Kaufman, visit Amphi Capital. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 253.mp3
Category:general -- posted at: 10:07am EST

Michael Covel speaks with Ben Hunt on today’s podcast. Hunt is the Chief Risk Officer at Salient Partners. Salient is a 19B AUM manager based in Houston, Texas. As Chief Risk Officer, Hunt writes the Epsilon Theory, viewing capital markets through the lenses of game theory and history. Covel and Hunt discuss the power of the crowd watching the crowd; game theory; having a profound agnosticism about what the future holds; the difference between risk and uncertainty in the context of game theory; the Panopticon and the chilling effect of being watched; the “common knowledge game” and the missionary; the island of the green-eyed tribe. For more information on Ben Hunt, visit epsilontheory.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 252.mp3
Category:general -- posted at: 5:58am EST

Today on the podcast, Michael Covel speaks with Andrew Huszar. Huszar is a Senior Fellow at Rutgers Business School and also a former Morgan Stanley managing director. In 2009, he managed the Federal Reserve’s 1.25 trillion dollar mortgage-backed security purchase program. Covel and Huszar talk about looking at the short term; black swans; Huszar’s history and how he came to work for the Federal Reserve; the changing of the banking model in the US from the 1980’s to the late 2000’s; quantitative easing; why Huszar ultimately left the Fed at the beginning of 2011; how the Fed has become over five times bigger in recent history; the current source of Wall Street money; the idea of an overly financialized US economy; and the need for long-term structural changes in the US. You can follow Andrew Huszar on Twitter at @AndrewHuszar. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 251.mp3
Category:general -- posted at: 12:04am EST

Michael Covel speaks with Hersh Shefrin and Arvid Hoffmann on today’s two-part podcast. Hersh Shefrin has done pioneering work in behavioral finance and is the author of Beyond Greed and Fear. Hoffmann is a colleague of Shefrin. He is a Professor of Finance at Maastricht University in the Netherlands. Shefrin and Hoffmann’s paper, Technical Analysis and Individual Investors, came out February 2014. The paper is concerned with short-term technical analysis and retail traders. Covel and Shefrin discuss how Shefrin came to know that behavioral finance was his path; the two-system framework; the connection to behavioral and eating disorders; the disposition effect; when emotion and reason are in conflict; “transferring your assets” vs. “selling a loss”; distinguishing between rules and discretion; how we stick with rules for ourselves given the context of our humanity; the psychological pitfalls of the 2008 financial crisis; the inevitability of market crises; Minsky and Keynes; the psychology of Keynesian economics; and human ideas surrounding uncertainty. With Arvid Hoffmann, Covel discusses the paper Technical Analysis and Individual Investors; the inspiration for the paper; Hoffmann’s definition of technical analysis; the narrow focus of the paper to short-term trading; technical analysis and trend following; “invest as if the market was efficient”, and “restrict your attempts to beat the market”. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 250.mp3
Category:general -- posted at: 6:33pm EST

Michael Covel opens up by discussing a 2011 David Harding appearance on CNBC in his book Trend Commandments. The other day, now in 2014, Harding appeared on CNBC again with Joe Kernen. Covel goes over the clip, discussing CNBC’s policy of prediction and picks, their ignorance of Harding’s style and outlook, and the talking heads in general. Covel then went onto Twitter and posted, eliciting a response from Joe Kernen. Covel analyzes their Twitter exchanges, noting there are plenty of questions beyond what Kernen asked. Why does Harding enter? Why does he exit? How much does he bet each trade? Behavioral finance? Black swans? Trading only price action? It’s always fun to put a lance into the boil of the system and watch it pop, as Covel shows here. Covel surmises that either Kernen was not prepared, or there’s an agenda--it’s an acting job. Want a free trend following video? Go to trendfollowing.com/win. SPECIAL NOTE: I welcome all of my listeners to join this debate on Twitter. My Twitter is @Covel and Joe Kernen is @JoeSquawk. Check out our conversation and please add smart feedback. However, please keep the conversation above board.

Direct download: 249.mp3
Category:general -- posted at: 7:33pm EST

Michael Covel speaks with Mark Miller. Miller is a computer scientist at Google. He has done early work in hypertext, and today is heavily involved in digital rights. His conversation with Michael Covel is wide-ranging, and especially interesting as they look to the future--perhaps even a future after Singularity. Covel and Miller discuss property rights; Hernando de Soto; Bitcoin and digital trust; “smart contracts”; why a contract is like a board game; game theory; 3rd World infrastructure; how program code can become a contract; a closer look at “possession is nine-tenths of the law”; whether the Turing Test was just passed; defining the term “singularity”, and the multiple singularities of the past; A.I. and nanotechnology; how Miller’s work relates to markets; the history of hypertext. For more information on Mark Miller, visit erights.org. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 248.mp3
Category:general -- posted at: 9:10pm EST

Michael Covel interviews Van Tharp on his second visit to the show. Van Tharp runs the Van Tharp Institute and is the author of four acclaimed books published by McGraw Hill: Super Trader, Trade Your Way to Financial Freedom, Safe Strategies for Financial Freedom, and Financial Freedom Through Electronic Day Trading. His new book is called Trading Beyond the Matrix. He was also featured in Jack Schwager's Market Wizard's: Interviews with Great Traders. Van Tharp received his Ph.D. in psychology, is a certified Master Practitioner of Neuro Linguistic Programming (NLP), a Certified Master Time Line Therapist, a certified Modeler of NLP, and an Assistant Trainer of NLP. He has used his expertise in NLP to create the successful models of trading and investing upon which so much of his work is based. Covel and Van Tharp discuss beliefs in the context of trading and investing; the moment of now, and the Navajo’s belief of a never-ending present; the belief examination paradigm; “big money” and what it means to Van Tharp; the idea of “trader jail”; fear of the unknown; the importance of sleep; and the difference between spirituality and religion. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 247.mp3
Category:general -- posted at: 10:37pm EST

Michael Covel speaks with David Ryan on today’s podcast. Ryan was famously first featured in Jack Schwager’s “Market Wizards” book. He is a protege of William O’Neil. Covel and Ryan discuss how Ryan got his start walking up to the front door of O’Neil’s offices; how Ryan would describe his approach to trading today; CAN SLIM trading, and buying the breakout vs. buying the dip; enjoying trading without clients; some good CAN SLIM winners in the past two to three years from Ryan’s perspective; big picture-wise, the max loss that Ryan is willing to take on a position; the type of winning percentages that Ryan really sees; the uneasiness about the overall market system since the 2008 financial crisis and how Ryan looks at how the situation has unfolded; high frequency trading; how the market can be humbling; and getting your ego out of the market. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 246.mp3
Category:general -- posted at: 3:24pm EST

Michael Covel talks with Jerry Parker on his third visit to the podcast. Parker is an original Turtle, trained by Richard Dennis. However, since then he has very successfully run a managed money firm called Chesapeake Capital. Covel and Parker discuss mean reversion trading; what the definition of momentum trading is compared to trend following; why “good enough” is more rigorous than any metric; how the intervention of the Fed has broken up trends and made volatility drop in markets; how the idea of uncertainty and talking in probabilities makes people uncomfortable; the difference between managed futures and trend following; why buy and hold is predicated on trust of the Fed; and why trend followers don’t look to “beat” the market. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 245.mp3
Category:general -- posted at: 4:01pm EST

Today on the show, Michael Covel talks with Dr. Walter Williams. He’s 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 libertarian views. Covel and Williams discuss why Williams calls himself a radical; the morality of markets; the welfare state and bailouts; how Williams didn’t "think poor" growing up; the nefarious aspect of minimum wage; how Williams stayed positive and avoided bitterness despite opposition; Malcolm X. and Martin Luther King, Jr.; why there’s no poverty in the United States; how Williams felt about the Fall of 2008 and the bailouts that took place; how we got to the point where people want to trust the state so much; and how Williams has developed a thick skin to deal with the criticism of his radical nature. For more information on Walter Williams, go to walterewilliams.com. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 244.mp3
Category:general -- posted at: 1:16am EST

Michael Covel speaks with John Mauldin of Mauldin Economics. Mauldin is a noted financial expert, a New York Times best-selling author, a pioneering online commentator, and the publisher of one of the most widely read investment newsletters in the world. Mauldin and Covel discuss credit card rates and zero interest rate policy; the improper use of credit; debt spirals; central bank policies that keep whipsaw periods going; the actions in Japan and how they can spread across the world; the justifications that Mauldin sees behind the scenes; black swans and boom-bust periods; how the 2008 financial crisis wasn’t a true black swan event; the “why” behind zero interest rate policy; and the specter of Keynesianism over the world. For more information on John Mauldin, go to mauldineconomics.com. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 243.mp3
Category:general -- posted at: 1:14am EST

Michael Covel speaks with Dr. Jean-Philippe Bouchaud. Bouchaud is Chairman of the multi-strategy quantitative hedge fund Capital Fund Management (5B+ AUM) and co-supervisor of the research team. He is a well known authority in the field of Econphysics, co-author of "Theory of Financial Risks and Derivative Pricing", a Professor of École Polytechnique where he teaches Complex Systems and has his Ph.D in theoretical physics from École Normale Supérieure. Covel and Bouchaud discuss Bouchaud's physics background and how it collided with the world of classical economics; the Black-Scholes model, and it’s still use; experimenting with simulation; Bouchaud and his colleague's paper, "Two Centuries of Trend Following"; the efficient market hypothesis; why the existence of trends is one of the most statistically significant anomalies in financial markets; how trends predate trend following; why classical economics has no framework through which to understand "wild markets"; benign randomness vs. wild randomness; accepting uncertainty; and differences between physicists and economists. For more information on Jean-Philippe Bouchaud, visit www.cfm.fr. Complimentary trend following DVD from Michael Covel: trendfollowing.com/win.

Direct download: 242.mp3
Category:general -- posted at: 4:59pm EST

Have you noticed with equity markets at all time highs there are starting to be justifications again? It reminds Michael Covel of... The “this time is different” routine. Covel moves on to talk about Timothy Geithner’s new book, and how Warren Buffett approached him after bailouts. Covel talks about crony capitalism on both sides of the aisle. Rigged markets at all-time highs are not fun. It may feel great at the time, but there’s a hangover. Covel shifts gears and talks about classical economics. It’s all about assumptions that become axioms. Covel discusses the Black-Scholes option pricing formula, and how the edges are indeed important. Covel can’t predict or tell you when or how, but he can tell you that if you’re in a position with a system to take advantage of price movements, you can benefit on the upside, the downside, and the black swan side. Next, Covel gives an example of someone who was mugged outside of a bar and became a mathematical savant after brain injury. Given these gifts, will he work for Wall Street? There are too many variables to make a prediction, he says. Next, Covel moves onto a TED talk. He’s thought they’ve always been enjoyable--until now. It turns out the TED operation operates like a cult, as evidenced by a clip from the Joe Rogan podcast. Covel wraps it all back to classical economics--it’s a cult, too. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 241.mp3
Category:general -- posted at: 5:28pm EST

Michael Covel speaks with Nir Eyal. Eyal is an educator, author, and entrepreneur who is all about connecting psychology, technology, and business. His new book is titled “Hooked: How To Build Habit Forming Products”. Covel and Eyal discuss how behavior and habits can be engineered, and how technology changes our behavior; the moral implications of habit forming activities; the difference between habits and addictions; breaking “the hook”; the four areas that “the hook” goes through: trigger, action, variable reward, and investment; the IKEA example and how value can be built; Eyal’s mentors and influences; the importance of social feedback from your community; the WhatsApp deal, and how to deal with your “insane jealousy” of the messaging app deal; getting equal pay for equal work, and how that might be embedded in our DNA; and the importance of interface changes when it comes to revolutionary changes in technology. For more information on Nir Eyal, go to nirandfar.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 240.mp3
Category:general -- posted at: 7:04pm EST

Michael Covel speaks with Brett Steenbarger. Steenbarger is Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY. Steenbarger and Covel discuss what a “flow state” is, and why it’s important; how Steenbarger has seen flow connect to the trading world, and the importance of matching your level of difficulty and challenge; risk and risk tolerance; the logical and psychological sides to risk; “what have you done for me lately” attitude for investors; why we don’t grow if we stay within our comfort zones; process vs. outcome; the psychological burden of certain fee structures; some of the common characteristics of successful traders; slow thinking, deep thinking, and fast thinking; where we’re headed regarding prescription drugs related to the mind; trend trading vs. mean reversion; contextualism; trend following vs. momentum trading; and how people actually behave vs. how they describe their behavior. For more information on Brett Steenbarger, go to traderfeed.blogspot.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 239.mp3
Category:general -- posted at: 1:07pm EST

Michael Covel speaks with Larry Hite and Alex Greyserman today on the podcast. Hite is a hedge fund manager and is one of the forefathers of system trading. He was famously featured in the Market Wizards book. A few years ago he started ISAM with Stanley Fink. Greyserman has 25 years of experience in the CTA industry, and was originally hired by Larry Hite at Mint. Greyserman is Chief Scientist at ISAM (PhD in Statistics). He is also a professor at Columbia University. Covel, Hite, and Greyserman discuss Singapore, and Covel’s recent excursions in Asia; how the game has stayed the same despite zero interest rate policy; what people are missing when they say “trend following is dead”; how you’ll never get perfection; their 800 year study, the premise, and what was found out; measuring human nature; the difference between divergent and convergent strategies; risk management; having “perfect” knowledge; using long trends and getting whipsawed in shorter trends; the asset class of trend following compared to the NASDAQ buy and hold, etc.; what’s changed about human nature through all the booms and busts; insurance, hedging your risk, and the risk transference process; asymmetrical leverage; adjusting to new environments; how those that survive are the most adaptable to the environment; and how trend following automatically adjusts to what’s happening. More: www.isam.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 238.mp3
Category:general -- posted at: 4:06pm EST

Michael Covel talks with Sharon Moalem, a physician and author. Moalem’s previous book, “Survival Of The Sickest”, was a New York Times bestseller. His newest book is called “Inheritance”. Covel and Moalem discuss Rafael Nadal as an example of digging deep in genetics; how our bodies are constantly in a state of deconstruction and reconstruction; how DNA is under constant modification; genetic personalized medicine; "Jeff the chef" and an example of specific dietary needs; dysmorphology and analyzing the hands, feet, and face of an individual; Gregor Mendel and his pea experiments in genetics; how your behavior can dictate your genetic destiny; the future of personalized genetic medicine; critics and misunderstandings of genetics; and vitamins on an individual basis. Science in life, science in trading, both excite me. Moalem pulls back the curtain on where healthcare is headed. Will it get there in our lifetimes? Wait and see is all we can do. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 237.mp3
Category:general -- posted at: 4:39pm EST

Michael Covel speaks with Robin Hanson, a professor of economics at George Mason University. Covel and Hanson discuss the definition of prediction markets; how prediction markets are used politically; comparing the prediction markets to the financial markets; Vernon Smith and coming up with the “why” for booms and busts; dealing with a complex world based on our limited abilities; steering towards humanity’s future; Hanson’s physics background, and how he came to where prediction markets became a passion; how prediction markets can make us pay more attention to the truth; Hayek and Mises, and some of their thinking early on; what taboos and idealogical beliefs might stop one from making optimal decisions; if people have employed particular trading strategies to the prediction markets; stop losses as information and as risk preference; setting up a market to bet on geopolitical events in the Middle East, and the controversy based around that; why DC politicians often cannot handle the research Hanson does; and why Hanson has elected to have his head cryonically preserved after medical death based on a cost-benefit analysis. For more information on Robin Hanson go to overcomingbias.com or hanson.gmu.edu. This is a podcast that at first might not appear useful to the trend following community, but it most certainly adds great value. Want a free trend following video: www.trendfollowing.com/win.

Direct download: 236.mp3
Category:general -- posted at: 2:01am EST

Today on the podcast Michael Covel talks with Harry Markowitz, the founder of modern finance and Nobel Prize winner. Markowitz also appeared in Covel’s documentary film a few years back, “Broke: The New American Dream”. Covel and Markowitz talk about Justin Fox and “The Myth Of The Rational Market”; Markowitz’s beginnings, and the Nobel Prize; Markowitz’s 1952 paper; how Markowitz felt about some of his prescriptions and ideas being interpreted into dogma; why Wall Street was not interested in Markowitz’s theories at one time; diversification for the right reason; Markowitz’s new four-volume book; advice on maintaining mental acuity at an advanced age and sounding like you’re 35 when you’re 86 years young; Markowitz’s attraction to the philosopher Hume; if it was fifty years later, if Markowitz would be a quant running a hedge fund today; Markowitz’s legacy; on being comfortable vs. being rich; the leveraged long-only hedge fund industry and being coaxed into putting your money into these institutions; Long Term Capital Management and portfolio theory. What a life! Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 235.mp3
Category:general -- posted at: 11:29pm EST

Michael Covel talks to Ryan Holiday, director of marketing for American Apparel; media strategist for Tucker Max, Dov Charney, and others; and author of the new book “The Obstacle Is The Way”. This is Holiday’s third appearance on the podcast. Covel and Holiday discuss Marcus Aurelius’ philosophy and stoicism, and why it has such a hold on Holiday; distraction; why the impediment to action actually advances action; the unpredictability of the world, and how we react to the world; George Clooney, and his start as an actor related to the obstacles we all face; Steve Jobs’ reality distortion field; what drives Holiday today; how will is the ultimate trump card; the two definitions of will; Alabama Crimson Tide coach Nick Saban and his approach to the moment of now; feeling great about the fight, the adversity, and the challenge; how the process is intrinsically valuable. For more information on Ryan Holiday, go to ryanholiday.net. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 234.mp3
Category:general -- posted at: 2:12am EST

Today on the podcast Michael Covel interviews Larry Doyle. Doyle’s book is called “In Bed With Wall Street”. Doyle is a former JP Morgan banker gets into why the system is fragile despite being five or six years removed from the crisis. Covel and Doyle discuss Doyle’s background and why he put “In Bed With Wall Street” together; Madoff, and what was missed from a regulatory perspective; KYC, or “knowing your customer”; MF Global, Jon Corzine, and touching customer funds; Dodd Frank and the supposed fixes to the 2008 financial crisis, and why Dodd Frank was more of an architectual blueprint rather than a completed piece of legislation; regulatory reforms to help fix the problems created in the 2008 financial crisis; informing the general public of the problems surrounding Wall Street today; the “bribe” of equity markets at all-time highs; manipulation of the markets; why Tim Geithner said “we saved the economy, but we lost the country”; if a crash is the only thing that will bring about change; why the banks must be broken up; and what would have happened if Goldman Sachs and Morgan Stanley had failed. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 233.mp3
Category:general -- posted at: 8:35pm EST

Today on the podcast Michael Covel talks with Tucker Max. Max is a bestselling author and entrepreneur who has sold over 3 million books. Covel and Max talk about their first meeting, and Max’s brutally honest advice to Covel; diet and nutrition; the NCAA, college athletics, exploitation, the media, and having to 'beat' the system; marginal cost and marginal product; entrepreneurial thinking and Max's early career; Max’s experience in marketing; protecting your independence; Christopher Hitchens; facing rejection in publishing, and how rejection is part of success; how success only teaches you to repeat what you did before, and failure forces you to think; what drives Max today; how the landscape has changed in regards to authors; the fight for authority and trust in the publishing world; what motivates Tucker Max today--the quality of relationships you have with other people, and what you do that matters to others. More information on Tucker Max can be found on tuckermax.me. Free Covel trend following video go to trendfollowing.com/win.

Direct download: 232.mp3
Category:general -- posted at: 12:40am EST

Michael Covel discusses a white paper titled "Two Centuries of Trend Following". Covel likes the fact that when he goes through their references, it's all other academic white papers. Then, sandwiched in between the other white papers, "The Complete TurtleTrader" is referenced. Covel posted this on Twitter and received a response in which someone wanted to talk about the last couple of years of trend following performance. Trend following performance is going to differ depending on the trader, what’s in their portfolio, the type of system they’re trading, and the risk they’re taking. There isn't some one magical elixir. Covel believes that you’re better off in the long-term trend following world, rather than in the short-term world. Still, the person Covel interacted with on Twitter was not concerned with the two centuries of trend following that the white paper talked about, but rather, "what have you done for me lately?" Covel moves on to talk about a recent monologue he did concerning a Yahoo Finance article in which he questioned the vocabulary of the talking heads. Covel looks at the responses to that episode, and then the larger view: Most people don’t have the foggiest clue what trading is; what Wall Street is. They’ve been listening to nonsense in the media. The lure is still out there. The buy and hold lure is still out there. But even worse is that "get rich quick" attitude. People don’t understand it as a science. Covel looks at at "The Wolf of Wall Street" and analyzes a segment from the movie. Covel uses it as an example of how most people view money-making and Wall Street. People don’t think like Covel’s podcast guests and writing subjects; they don’t think like Marty Bergin at Dunn Capital or Ed Seykota. This is what Covel is up against. He wants people to understand the science of trading. Covel also notes that his old newsletter system is being changed. If you want to continue to receive Covel’s newsletter, go to trendfollowing.com/subscribe-now. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 231.mp3
Category:general -- posted at: 2:22am EST

Today on the show Michael Covel speaks with Mark Minervini. Minervini is the author of 'Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market' and was featured in Jack Schwager’s 'Stock Market Wizards'. Minervini and Covel discuss the importance of influences outside of the finance world; Minervini’s atypical background in music and how he got to where he is today; capturing 'super performance' and the trend; the importance of cutting your losers short; how Minervini spends his day; Richard Love and 'super performance' stocks; why Minervini is not a fan of diversification beyond the minimum amount that you can get away with; Richard Donchian, Jesse Livermore and their influence on Minervini; timeless strategies; Paul Tudor Jones and 'losers average losers'; the importance of not just trading what you know; 'new high ground' and not being afraid of buying higher highs; risk management and bet sizing; the biggest areas where new traders often start off on the wrong foot; Howard Lederer and poker players as an analogy to traders; why you shouldn’t even turn on the television as a stock trader. For more information on Mark Minervini, go to minervini.com. Want a free trend following video? Go to trendfollowing.com/win.

Direct download: 230.mp3
Category:general -- posted at: 4:52pm EST

Michael Covel talks with Bill Adams in his second visit to the podcast. Adams is a private trader and systems developer. He is based in Zurich and works with institutional clients. Adams and Covel discuss if Adams views himself as a trend following trader; why the word futures can be problematic; broad diversification and diversifying on a number of different tiers; risk-based diversification; why making sure you're in the game is the most important factor; why every business is seasonal; why price is the most important aspect to a trade; how Adams has (or doesn't have) the "expertise" to trade certain markets; informing your system of various events as a quantitative or systematic trader; thinking about Adams' strategy in the context of evolution; core baskets vs. satellite baskets; the adaptive aspect of what Adams does; the philosophical and operational aspects of volatility; average true range as a volatility measure; trading to make a return vs. trading as an economist; Adams' greatest areas of challenge and frustration; Michael Lewis and whether the markets are "rigged"; and execution strategy. Want a free trend following video? Go to trendfollowing.com/win

Direct download: 229.mp3
Category:general -- posted at: 12:14am EST

Michael Covel cuts up a Yahoo Finance segment called "Are Social Media Stocks In A Bear Market?" with Michael Santoli and Jeff Macke. Covel dissects the terminology and words used by the media, and the position of the talking heads on this Yahoo Finance article. Covel discusses the idea of researching stocks. There is advice that says you should be doing one hour of fundamental research per week on every stock you own. If you own 50 stocks, that's 50 hours a week. Covel thinks this advice is asinine, and points out that the best traders don't do that. If the best traders in the world don't do that, why should you? It doesn't matter what the research tells you; if you don't have a stop loss, you're going to lose your money. Period. Covel then moves on to the Jeff Macke/Michael Santoli segment and dissects it each step of the way. Covel breaks down the terminology, including "crowded longs", "chatter from brokerage firms", and "hedge fund favorites". Covel also discusses how we don't know the why behind bubbles, inspired by his Justin Fox interview from a few days ago. Covel also discusses why you don't need to know what a good price is on the way down; defining "smart money", "aggressively buying", and "leadership" in a trading system; and whether or not the market is "anxious". Covel ends with something inspired by James Altucher's article, "Ten Reasons You Have To Quit Your Job In 2014". Want a free trend following video? Go to trendfollowing.com/win. 

Direct download: 228.mp3
Category:general -- posted at: 5:07pm EST

Michael Covel speaks with Justin Fox. Fox is the executive editor at the Harvard Business Review Group. He writes a blog for hbr.org (http://blogs.hbr.org/fox/) and a monthly column for Time magazine. Fox is also the author of "The Myth Of The Rational Market: A History of Risk, Reward, and Delusion on Wall Street". Covel and Fox discuss Harry Markowitz, Bayesian statistics, and making smart decisions in an uncertain world using quantitative tools; stocks, beta, and the importance of making useful predictions; Commodities Corporation and trend following trading in the early 1970’s; why a market in which everyone was rationally anticipating the future would be a random market; Amos Hostetter; how the behavioral mindset started to unfold in the 1970’s; Eugene Fama and the efficient market hypothesis; the Capital Asset Pricing Model; why well-designed markets and well-informed investors are prone to manias and panics; and individuals making errors vs. the group getting it right. Justin Fox can be found on Twitter at @foxjust or on the web at byjustinfox.com.

Direct download: 227.mp3
Category:general -- posted at: 7:39pm EST

Trend following wisdom with the most inspiring Market Wizard Ed Seykota.

Direct download: 226.mp3
Category:general -- posted at: 4:59pm EST

Michael Covel speaks with Thomas Gilovich. Gilovich is a professor of psychology at Cornell. He is an expert on behavioral economics and decision making. Covel and Gilovich discuss how his world dovetailed into money and markets; basketball, streak shooting, and the “hot hand”; randomness and the clustering illusion; the missing Malaysian Airlines flight and probability; the reluctance to accept a probabilistic view of the world; politics, predictions, and probabilities; people who see the world in black and white; drawing conclusions from incomplete and unrepresentative evidence, and how to avoid that folly; the position of the devil’s advocate, and the importance of that role; Gilovich’s response to the media’s talking heads, and their often black and white opinions; behavioral economics vs. traditional economics; when people do the wrong thing because the public demands it; Bill James and the closer; instinct vs. considered judgment and test taking; irrationality in financial markets and bubbles; loss aversion; and why you don’t need to be better than the market. More information on Thomas Gilovich can be found at psych.cornell.edu/people/thomas-gilovich‎. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 225.mp3
Category:general -- posted at: 12:13am EST

Michael Covel speaks with Tom Dorsey, of Dorsey Wright & Associates. Dorsey expands on his view of technical analysis, with a specialization in point & figure and relative strength. It’s a little different from Covel’s world, but occupies the same head space. Dorsey Wright & Associates was started in 1987, and Covel asks how Dorsey first came to technical analysis. Covel and Dorsey also discuss dealing with a bear market in Dorsey’s early days; early training in options; how Dorsey learned about point & figure trading; definitions and explanations of point & figure trading; how point & figure works like a tennis match; automating your strategy; the criticism of “black boxes”; a third grade experiment; how Charles Schwab changed the world; and how technology influences the technical analysis world. More information about Tom Dorsey can be found at dorseywright.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 224.mp3
Category:general -- posted at: 3:42am EST

Michael Covel speaks with Marc Faber, Editor and Publisher of "The Gloom, Boom & Doom Report", in person on the podcast (recorded in Chiang Mai, Thailand at Faber's office). Covel and Faber discuss the current state of Russia; changing geopolitics; Faber’s experience living through the Cold War; the difference between Crimea’s value to the west and its value to Russia; why the Russians perceived the uprising in Kiev to be financed by western power; China’s reaction to the situation in Crimea; the construction boom in China; the difficulty of forecasting China’s geopolitical changes; positive and negative valuations of the market, and finding investments to be “cheap” or “expensive”; Faber’s advice to young people following his path today in the face of money printing and bailouts; what can be done about wealth inequality; making a living in the face of instant communication and globalization; central banks’ role in wealth inequality; why money printing leads to bubbles; Warren Buffett’s involvement with the bailouts, and how his government connections have helped his investments; and how governments are assimilating everything; “Capitalism and Freedom” by Milton Friedman; and the cost of large government in the US and elsewhere. Plus, included are Faber's views on relationships, contrasting the West and Asia along with Facebook fame (not related to investing, but wise and entertaining words). Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 223.mp3
Category:general -- posted at: 3:01am EST

Michael Covel speaks with Martin Bergin, CEO of Dunn Capital Management. Bill Dunn and Dunn Capital were famously profiled in Covel’s book Trend Following and they have a 39 year track record of trend following performance. Covel and Bergin discuss the early stages of Dunn Capital, and how it arrived where it is today; trend following with futures; volatility within Dunn’s system, and why volatility is important to the overall performance; targeting losses; how history informs system creation; adapting to the marketplace and to available technology; what it means to be 100% systematic with no overrides; defining “black box” systems, and the difference between Dunn Capital’s strategy and black box strategies; location in relation to Dunn Capital, and why it isn’t necessary to be in a big city like London or Tokyo; how the core of Dunn Capital has stayed the same while certain aspects of business has evolved; decreasing drawdown without decreasing profitability; behavioral finance and dealing with biases; the adaptive nature of trend following; predictive vs. reactive trend following; and Dunn Capital’s fee structure. More information about Dunn Capital can be found at dunncapital.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 222.mp3
Category:general -- posted at: 12:19am EST

Michael Covel speaks with Howard Lindzon. Lindzon is a Canadian entrepreneur, author, financial analyst, technical analyst and angel investor. Lindzon manages a hedge fund, serves as managing partner of the holding company Social Leverage, limited partner at Knight's Bridge Capital Partners, and is the co-founder of StockTwits. He’s also known for the satirical podcast Wallstrip. Lindzon and Covel discuss the commonalities between the angel investing world and trend following; over-diversification; diversification in private investments vs. stocks; how Lindzon got the entrepreneurial “bug”; Lindzon’s early career as a stockbroker; the beginnings of Wallstrip; Lindzon’s comedy influence; how Wallstrip led to the next four years of Lindzon’s investments; how Lindzon’s mistakes helped him grow as an investor; Lindzon’s experience with fraud committed by a business partner; keeping your business drama-free; the issue of distraction; Lindzon on the birth of StockTwits; the investment that changed Lindzon’s financial life in 2005; the future of StockTwits as Lindzon sees it; social leverage; the art of curation and verticalization; and thinking of the financial web as a social bank account. Howard Lindzon can be found on www.howardlindzon.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 221.mp3
Category:general -- posted at: 12:20am EST

Michael Covel speaks with Victor Sperandeo. Sperandeo was originally featured in The New Market Wizards by Jack Schwager and has a Wall Street career that spans back to 1966. From trader, to historian, to a man with very strong public policy opinions, Sperandeo comes to the podcast to discuss his career and views with Covel. Sperandeo and Covel discuss recent public policy directions; trading against your public policy interests; zero interest rate policy; whether the S&P is a “bribe”; the Fed mandate to keep stocks from falling and to stop volatility; the wealth effect; why the stock market going up is a very poor instrument to fix the economy; the trend towards socialism; Sperandeo’s experience working with George Soros; Sperandeo’s experience with the DTI index; black swans and the effects of large, catastrophic events on the market; why the only way to protect yourself is extreme diversification; volatility balancing; and Sperandeo’s experience as a young man and how he came into the trading world. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 220.mp3
Category:general -- posted at: 8:00pm EST

Today on the podcast, Michael Covel talks with Carl Richards of Behavior Gap fame. Richards is also a Certified Financial Planner. Behavior Gap, featured in the New York Times and often posted by Covel, features sketches filled with insights into finance and into life. The Behavior Gap brings good investing and behavioral economics together in an understandable, digestible format. Covel and Richards discuss Richards’ new radio venture; how Richards came to start The Behavior Gap; outliers, and living your own bell curve; risk on a daily, weekly, and monthly basis; the definition of radical self-awareness; mindfulness and awareness as applied to our financial decisions; habit, action, feeling, and thought; simplicity and effectiveness; government intervention in the markets; quantitative easing; buy and hold in Japan; loss aversion and the pain of loss; and feeling loss more than the joy of gain. More information on Carl Richards is available at behaviorgap.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 219.mp3
Category:general -- posted at: 6:36pm EST

Michael Covel speaks with Sam Polk on today’s podcast. A friend of Covel’s that has previously been on the podcast, Peter Borish, recommended that Covel speak with Polk. Polk wrote an interesting op-ed in the New York Times called “For The Love of Money”. Polk is a former wall street banker who walked away after making millions. Today, Polk runs a non-profit to help the poor understand nutrition. However, his op-ed is definitely controversial. Covel and Polk discuss the intensity surrounding the reaction to Polk’s op-ed piece; reactions from friends and colleagues about the article; envy and jealousy in the Wall Street world; Polk’s background and life growing up; filtering cultural messages; the line between individual responsibility and being part of a system; crony capitalism; power dynamics; the mythology of risk-taking in America; the solution for the investment banks out there; and Polk’s non-profit which he runs today. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 218.mp3
Category:general -- posted at: 1:05am EST

Michael Covel received an email from Jonathan Garner about a blog post from Derek Hernquist titled “I Have No Idea What Tesla Is Worth, Do You?”. It linked to a CNBC interview with an analyst named Brian Shannon. Covel plays the CNBC clip and gives commentary at specific points. Covel shares the technical analysis viewpoint with Shannon, but disagrees when it comes to price targets. Covel also points out some terms that aren’t part of the vocabulary of a trend following trader. A pure, predictive technical analyst could go that direction, but that’s not trend following. Covel isn’t trying to slam Shannon, who is trying to fight the good fight from a price action perspective. Rather, Covel focuses on CNBC’s coverage and one particular talking head who has no idea about technical analysis. Covel points out that even if you’re a purely fundamental trader, you have to know what trend following is, what it does, and how it behaves. Covel focuses on price action and momentum, not Tesla’s latest announcement. Shannon concludes by talking about risk management, which Covel then discusses. Covel ruminates on why trend following and technical analysis are so confused, and talks about the difference between predictive and reactive technical analysis. Continuing on with another example, Covel tells a story about a young man he met who invested in $10,000 worth of Facebook stock, and why it’s important to have an exit plan. Covel was forwarded the young man’s blog post, which stated the decision to invest in Facebook was based off a wealthy friend’s advice. If you’re going to follow advice, make sure it isn’t made up out of thin air. If you’re going to follow a thought process about how money is made, you have to scientifically dig in and look at the process. If not, it’s just gambling. To close out, Covel talks about a piece he re-read from Malcolm Gladwell about how Nassim Taleb first met Victor Niederhoffer. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 217.mp3
Category:general -- posted at: 5:26am EST

Michael Covel talks with writer and trader Jack Schwager, author of the Market Wizards series, in his third visit to the podcast. Today, Covel and Schwager discuss his newest book, The Little Book of Market Wizards. Schwager also has a new program out called Fund Seeder. Covel and Schwager discuss how Fund Seeder acts as a liaison for traders and investors; the difficulty of starting out as a new trader; how Fund Seeder is a global opportunity; Schwager’s last book, Hedge Fund Market Wizards; the timeless quality of the Market Wizards books; Jesse Livermore’s Reminiscences of a Stock Operator; how human nature is the only thing that will never change; looking for a “secret recipe” in the Market Wizards book; “The Upside of Down: Why Failing Well Is The Key To Success” by Megan McArdle; why failure is smart and an essential part of success; the importance of failure in the context of education; behavioral economics; Jack Horner and thinking outside of the box; the importance of loving what you do for a living; and the importance of travel. More information about Fund Seeder can be found at fundseeder.com. The Little Book of Market Wizards is also available now from all major retailers. Free trend following DVD? Go to trendfollowing.com/win.

Direct download: 216.mp3
Category:general -- posted at: 12:39am EST

Michael Covel interviews Al Abaroa today. Abaroa is Chief Investment Strategist at Kingsview and has been a registered broker and trader since 1993. He has seen all aspects of the investing industry. Today, Covel and Abaroa talk about a white paper that Abaroa wrote about trend following. Abaroa and Covel discuss how people forget that anything can and will happen; why we’re seeing optimistic behavior in the market; the similarities between the WhatsApp/Facebook acquisition and the AOL/Time Warner acquisition; Abaroa’s wealth formula; “reasonable returns”; long term vs. short term outlooks; the advantages of youth in trading; lifespan growth, and retirement; Tom Basso and black swan events; looking back on major crashes; development and distribution as the two modalities of price; focusing on price action; the Global Volatility Index; looking at black swan periods as a place to profit; the asymmetrical return stream and the asymmetrical nature of trend following; why trend following produces returns a minority of the time; position sizing; fixed contract allocation vs. fixed fractional contract allocation and their role in position sizing; trend following investors and market timing; seeking immediate gratification in trend following investments; and looking at trend following track records. Abaroa can be reached at al@kingsview.com and the white paper discussed can be found at www.michaelcovel.com. Want a free trend following DVD go to www.trendfollowing.com/win.

Direct download: 215.mp3
Category:general -- posted at: 4:45am EST

Michael Covel opens up with an excerpt from “River Deep, Mountain High”. A lyric invented for a bubble. Covel moves into a description of a trend following firm with a long track record and discusses their history and key features. Covel notes location independence, consistency, cutting your losses short, taking on volatility, being able to take advantage of outlier moves, and being 100% systematic. Covel also discuses being agnostic to which markets that allow you to make your money, as well as being agnostic to market direction and which markets you have in your portfolio. In reaction to a critical e-mail, Covel plays a clip of Charlie Rose talking to recent podcast guest Daniel Kahneman. Kahneman discusses trading, the ability to make money in the markets, prediction/forecasting, “Moneyball” by Michael Lewis, and Kahneman’s view on all of these. Covel also moves on and talks about his role as a curator. Want a free trend following DVD go to www.trendfollowing.com/win.

Direct download: 214.mp3
Category:general -- posted at: 7:54pm EST

Michael Covel talks with Jonathan Hoenig. Hoenig is a regular on many news and cable news shows--you’ve seen him everywhere over the past decade. However, he got his start on the Chicago trading floors, and he talks to Covel today about his new documentary, “Pit Trading 101”. Covel and Hoenig talk about Hoenig’s branding for his hedge fund, Capitalist Pig; why capitalism has become demonized; the difference between capitalism and crony capitalism; Ayn Rand and capitalism as the “unknown ideal”; how Hoenig ended up in the Chicago trading pits, and what we can learn from studying pit trading today; the physical type of pit traders; the subculture of the pits; where Hoenig sees futures markets going; the blame of speculators; and America’s place in the world today. Want a free trend following DVD go to trendfollowing.com/win.

Direct download: 213.mp3
Category:general -- posted at: 7:05pm EST

Daniel Kahneman has been called the most important psychologist alive today and joins Michael Covel on the podcast. Kahneman is the 2002 winner of the Nobel Memorial Prize in Economic Sciences. Together, Covel and Kahneman discuss Kahneman’s beginnings, and how he came to realize he was looking at the world from a different vantage point than most; how Kahneman’s work is foundational to trading; questioning the dogma of rationality; happiness, and the distinction between the remembering self and the experiencing self; the consumption of memories; the danger not making peace with a loss; bubbles and crowd behavior; happiness research and public policy; emotion, possibility, and probability; hope and fear; why optimism is the engine of capitalism; and the influence of prospect theory. Want a free trend following DVD go to trendfollowing.com/win.

Direct download: 212.mp3
Category:general -- posted at: 5:11am EST

Michael Covel talks with John Bollinger on today’s podcast. Bollinger is responsible for a technical indicator that just about everyone has heard of: Bollinger Bands. Bollinger has been popularizing price-based indicators since the early 1980s, and Bollinger Bands arose from the need for adaptive trading bands and the observation that volatility was dynamic, not static, as was widely believed at that time. Covel and Bollinger discuss Bollinger Bands as described for the lay person; defining when a price is relatively high or relatively low; defining “relatively high” and “relatively low”; measuring volatility to determine the “width” of a Bollinger Band; standard deviation; the beginnings of Bollinger Bands, and how John Bollinger came to put it together; different ideas about volatility in the 1980s; some of Bollinger’s early curiosity triggers, and why he started digging into finance after going to art school; light, film, and Bollinger’s experience at the School of Visual Arts; Bollinger’s experience in his apprenticeship to learn technical analysis; “the best authority is the price itself”, and why this statement isn’t very well accepted in the mainstream; differences between fundamental and technical analysts; Bollinger’s look at media and the presentation of his message over the years; why Bollinger would be known as a quantitative analyst instead of a technician if he started his career now; position sizing; and why volatility is the least understood aspect of the market. More information on John Bollinger can be found at www.bollingerbands.com. Want a free trend following DVD go to trendfollowing.com/win.

Direct download: 211.mp3
Category:general -- posted at: 8:28pm EST

Michael Covel reflects on the recent guests he’s had since his last monologue, including guests like Ed Seykota. Covel discusses Seykota’s book, “Govopoly”, and how government and crony capitalism is eating the US from the inside-out. If you have to navigate a system like this, that’s unpredictable at its essence, there’s no better way to maneuver around the chaos than with trend following. Covel discusses how trend following, and being an entrepreneur, gives you freedom. Covel moves on to talks about the 2014 conference in Singapore, where Covel is preparing to have some of the best and brightest names in trend following. Covel then plays a clip from CNBC featuring David Harding. Covel discusses the clip and gives his commentary, discussing momentum and trend following in Harding’s own work, and how the talking heads just don’t get it. Covel questions why CNBC would bring on someone and act like they have no idea of what he does, and spends some time exploring why CNBC would have someone on and ask the questions they ask. Harding also interestingly notes that he is not at the particular conference he is at to learn strategy; Covel explores why Harding might not want to learn strategy at a conference with some of the world’s most powerful people, and what this might mean to the young trader.

Direct download: 210.mp3
Category:general -- posted at: 6:30am EST

Michael Covel talks with Dave Rapach, a professor of economics at the John Cook School of Business at Saint Louis University. Rapach comes at trend following from an academic perspective, and he explains it from this vantage point. Covel and Rapach discuss why trend following works from an academic standpoint; "publish or perish" and the difficulty of publishing scholarly articles on trend following; early research on trend following, the random walk theory, and Burton Malkiel’s “A Random Walk Down Wall Street”; Warren Buffett, Bill Dunn, and survivorship bias; a paper that Rapach traces to the reintroduction of trend following and technical analysis to the academic community; measuring systematic risk; Eugene Fama’s recent nobel prize; how the trend following world has been neglected by the academic community; how Rapach found his way into the academic finance world; Covel’s experience digging in to trend following research in the early to mid 1990’s; some of Rapach’s recent papers; and why recessions are good for trend following. For more information on Dave Rapach, visit http://sites.slu.edu/rapachde. Want a free trend following DVD go to trendfollowing.com/win.

Direct download: 209.mp3
Category:general -- posted at: 7:01pm EST

Michael Covel speaks with Ed Seykota. Seykota was famously first featured in the original “Market Wizards” book. He’s also appeared in Covel’s “Trend Following”. Covel considers Ed a friend and a mentor, and Seykota has provided a major influence on Covel’s work. Their conversation today gets into a bit of trend following, but it’s mostly about Seykota’s new book, “Govopoly”. Together, Covel and Seykota discuss Seykota’s concerns about our economy; the assimilation model and how Seykota sees assimilation happening today; the definition of “govopoly”; how Seykota’s mentor’s work plays into Seykota’s work today; thinking about systems; what we can do to “fix” the economy, or to at least prepare yourself; the exponential curve that assimilation takes; noticing things before they’re important; why Seykota doesn’t provide a “solution” to the problem and instead advocates for the system to correct itself; what we can do as people in response to the system; Detroit as a microcosm of the US; and ways to make money during the assimilation.

More.

Direct download: 208.mp3
Category:general -- posted at: 11:21am EST

Michael Covel interviews Dominic Frisby, a self-proclaimed accidental financial bod, comedian, actor of unrecognized genius, voice of many things, & presenter. His new book is called “Life After The State”. Covel and Frisby talk about Frisby’s beginnings as an actor and comedian; what comedy can teach us about finance and the discipline of clarity; how Cuba’s currency confusion led the nation to unfortunate circumstances; real estate; other peoples’ trust in the state; how the poor and needy would be cared for in a society without a state; the monopoly on compassion; how the state takes a piece of everything; “greed is good”, “money is the root of all evil”, etc; crony capitalism; predation vs. productivity; the influence of lobbyists; the duopoly on money by banks and the state; education; Bitcoin, digital currency, and taxation. For more information on Dominic Frisby, visit www.dominicfrisby.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 207.mp3
Category:general -- posted at: 10:05pm EST

Michael Covel talks with Harry Dent in his second visit to the podcast. Dent studies demographic and historic trends to see major events unfolding long before the mainstream media has them on their radar. Dent’s new book is called "The Demographic Cliff". Covel and Dent discuss why demographics are so important; the definition of the "demographic cliff"; demographic comparisons between the US and Asia; rates of urbanization and GDP in emerging countries; the baby boomer generation; the Japanese "coma economy"; why the retirement age needs to be raised; how real estate in America will never be the same; and "die-ers" vs. buyers. For more information on Harry Dent, go to www.harrydent.com. Want a free trend following DVD? Go to www.trendfollowing.com/win.

Direct download: 206.mp3
Category:general -- posted at: 7:29pm EST