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.

On today’s episode of Trend Following Radio Michael starts off discussing his travel. One of his stops in early December was New York City to meet up with a few legends, one of them being Larry Hite. He talks a bit about their lunch conversation and how Larry has climbed the ladder of success. Larry paints the picture that he was just an average Joe from Brooklyn, and his success is fully obtainable if the right desire and drive is there.

Today's subject on Trend Following Radio goes along the lines of the rest of his conversation with Larry Hite. It’s all about the data. Michael makes it clear that his career would not exist if he did not have the opportunity to dig into the trend following data. You see all types of trend following traders up in the same months and down in the same months–that means something. Doesn’t matter why it happened, just that it happened. Further, many make the mistake of not caring about the psychological. You can have the best system under the sun, but if you don’t have the psychological toughness to carry it out then the system does not matter.

Michael goes on to read from an article out of The Washington Post titled, “Jeff Samardzija just proved athletes would be foolish to pick NFL over MLB.” America’s favorite sport is football, hands down. The dream of just about every father in America is for his son to play professional football. However, all data says to stop right now and turn your focus to baseball. The article states, “The top 30 contracts in the history of team sports – ranked by total compensation – all went to baseball players.” When you compare average players in the MLB with top players in the NFL, the MLB still comes out on top. “Through this season, [Calvin] Johnson will have collected $113,816,086 in earnings, making him one of the wealthiest non-quarterbacks in league history. Samardzija, by virtue of the five-year contract he just signed with the San Francisco Giants, is guaranteed to have earnings of $122,725,000 – and have another chance to dip into the till in 2021, when he’ll turn 36.” Mike pulls the article back to trend following showing that trend following numbers have made it and persevered through ups and downs. It may not be the most widely known strategy, but the data is real.

In this episode of Trend Following Radio:

  • The success of Larry Hite
  • Baseball vs. Football
  • Trusting the data
Direct download: 410.mp3
Category:general -- posted at: 10:00pm EST

Today on Trend Following Radio Michael Covel interviews Thomas Sterner, author of “The Practicing Mind.” Tom was in the same career for over 30 years when he decided to make a switch. He self published the first edition of “The Practicing Mind,” and as it snowballed into a phenomenon, publishers started knocking at his door for wider distribution.

This is about practicing focus and learning to calm your mind. Not an easy task in today’s world with media constantly telling us we are incomplete in what we are doing. People incessantly crave closure, but closure is not always the answer. Tom says that immersing yourself in something that is ongoing puts you in a place of “being.” People are always trying to complete the next level, but being in a state of constant expansion is the best state to be in. He says that even the process of writing books does not have a beginning and an end. He looks at it as an ongoing process. When one book ends, then you can move on from saying what you needed to say and move onto the next phase of what you want to be said. Tom shares a personal story about becoming a musician. For years he had felt inadequate as a musician. It took some time but eventually he figured out that he had accomplished many milestones throughout his career but because he had a limitless ability to expand and grow as a musician, he would never reach the state of perfection he envisioned. Almost in an instant, his frustration and negative thoughts about his accomplishments washed away.

The importance of repetition is Michael and Tom’s next topic. Your brain responds to repeated action best. This can vary from swinging a golf club over and over again, to how you meet people and interact with them. Tom says, “Attention combined with intention is the goal.” Your process and repeated practice is what makes achieving a goal feel so good. Anything you can snap your fingers and have doesn’t feel nearly as rewarding. He says that “Your perception of what good is and how good you can get is ever changing.”

Lastly, Michael and Tom discuss multitasking and living in the moment of now. Tom says that the way we envision multitasking doesn’t exist. When you think you are doing a bunch of different things simultaneously, you are not. The brain is operating at higher speeds but we are not letting our brains concentrate in one area for a long amount of time so in consequence, our brain is atrophying. We are losing that part of our mental game. Slowing your mind down brings clarity and thought. Secondly it connects your mind to what you are doing. If you are just reacting to whatever your mind is creating than you have no control over what you are doing. Mindfulness is not something that can be mastered. You have to constantly work at it just like you would never say “I have mastered fitness so I don’t need to work out anymore.” It is a constant practice. The moment you catch your mind running off is when you start training your brain. If you can recognize yourself chasing your mind then that is being aware of where it is going. Mike says, “It is like an organized treadmill that everyone is on. There is this lack of awareness among people that they are not in control.”

In this episode of Trend Following Radio:

  • Attention combined with intention
  • Non-judgment
  • Perils of multitasking
  • Controlling your mind
  • Constant media chatter
Direct download: 409.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel starts off with a short clip from Star Wars. Michael notes that Yoda and the force have unexpected connections with trend following. He then recounts a story that happened to him a few weeks ago where he feels “the force” was involved. While he was waiting to take a red eye to Tokyo with his parents a man asked if he could share the power outlet he was using. That man happened to be one of the world’s most famous computing pioneers. Michael agreed to share the outlet if he could take a selfie with him. It was a weird serendipitous moment that Michael attached “the force.”

Michael goes on to read from an article titled, “Meet David Harding: The Man Behind Models that Beat the Market,” published in The Australian Financial Review. The article highlights Harding’s accomplishments and views on trading. Harding stresses in the article that the only reason systematic trading has gotten big over the years is because it works. Harding’s company, Winton Capital Management, goes completely against the efficient market hypothesis and he has actually made massive money going against the theory. David goes on to say that investment management is an internal psychological war with yourself. You constantly doubt yourself but the challenge is rising above that self doubt and sticking with your system. If you allow every emotion to be built into your system then you do not have a system at all.

“Over-fitting and It’s Impact on the Investor” by the Man AHL Academic Advisory Board is Michael’s next interest. Over-fitting is finding patterns that aren’t actually there. It is a common phenomenon in science as well as trading and other fields of study. Analyzing a companies culture is a good way to produce less over-fitting results. Michael quotes different view points regarding the concept of over-fitting, finishing up with inspirational quotes by NBA player Kevin Garnett and Christopher Hitchens focused on “making it happen.”

In this episode of Trend Following Radio:

  • Star Wars and “The Force“
  • Efficient Market Hypothesis
  • Over-fitting in trading
  • Rising above self doubt
Direct download: 408.mp3
Category:general -- posted at: 10:00pm EST

Today on Trend Following Radio Michael interviews Dave Huss. Dave discusses his transition from marketing consultant to entrepreneur. Formerly Dave did consulting work for paid advertising and now has transitioned into t-shirt design and sales (Michael notes that famed trader Salem Abraham had considered the t-shirt business before trading). He has been able to grow his business quickly due to a website called www.teespring.com. This website allows him to order shirts on-demand without any out of pocket expenses.

Dave comes at t-shirt sales in a trend following manor. One out of every ten shirts that he puts out will be a big winner. He makes it clear that it is very important he has a system. He limits his cost to $20 per shirt for advertising. If he doesn’t get a positive response from his $20 advertising push then he stops. He lets the market decide which t-shirt designs are worth pursuing. He has put out 500+ designs just this year. Six out of ten times he sells zero shirts. Three out of ten of those shirts sell 20 or 30 units and he breaks even, but one out of ten shirts will sell over 1,000 units. He never knows which will be the home run and which designs are going to be the duds.

Dave stresses how online marketing has become more and more a part of our lives. You have to participate in online marketing if you are going to have any kind of business these days. You find your most passionate fans in your business and hit them at the right time. You can’t put your head in the sand and think your business is going to make it.

In this episode of Trend Following Radio:

  • Contract work vs. Entrepreneur
  • Niche markets
  • Online marketing
  • Importance of a system
  • Survivorship bias
Direct download: 407.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel features Larry Hite. Larry is unquestionably one of the founding fathers of systematic trend following. In 1981 he founded Mint Investments and by 1990 it was one of the largest trend following funds in the world. At the same time he formed partnership at Man group, which became wildly successful as well. In 2000 he decided to go another direction, focusing on proprietary trading and research, founding Hite Capital Management. Currently, Larry is partnered at ISAM with his long time colleague Stanley Fink.

Throughout today’s podcast Michael pulls quotes and excerpts straight from Larry’s chapter in “The Little Book of Trading.” Quotes range from probability advice to compound interest and one or all of them are certain to spark certain “Ah-ha” moments. Michael starts with Larry giving advice on the notion of being wrong. Larry stresses that being wrong is ok. He was wrong often and always built the possibility of being wrong into his models. He would ask himself, “How much can I afford to lose?” And work his risk in from there. Hite found that even having perfect knowledge of an end of year price wouldn’t guarantee riches. His research proved that you could only bet with 3:1 leverage on a stock, even if you had absolute knowledge of the stocks year end price, because you can’t predict the path a market might take getting there. Respecting leverage is key. Michael then brings up a dating story Larry shared about probabilities.

Michael then goes into Larry’s risk management. He stresses, “Make sure you are as prepared as possible. You can’t know everything but you can certainly be prepared.” Larry always starts from an assumed position of ignorance. You have to know what you don’t know. If you know what the worst possible outcome can be from the outset then you are starting with a great advantage. Mike finishes with one last excerpt from Larry taken from a paper titled “Life is a Bet.” In this excerpt Larry outlines why life is just a serious of bets. Some are large and some are small. Some seem trivial and some seem to have far greater impact on our lives. However, those trivial bets can quickly become paramount. Never discount a decision. It could be the one that makes or breaks you.

In this episode of Trend Following Radio:

  • Respecting leverage
  • Thinking in terms of odds
  • Being wrong is OK
  • Getting the odds on your side
  • Risk management
  • Life is a series of bets
Direct download: 406.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Didier Sornette. He is Professor on the Chair of Entrepreneurial Risks at Swiss Federal Institute of Technology Zurich. He is also a professor of the Swiss Finance Institute, associated with both the department of Physics and the department of Earth Sciences at ETH Zurich. He has worked on the King effect, a theory used to predict economic bubbles. Didier also set up the Financial Crisis Observatory in October of 2008. He brings an interesting perspective to financial crisis’s, and bubbles.

Didier first realized his fascination with financial bubbles back in 1989. He received a grant to try and solve the equation of prediction. Didier goes on to discuss the different theories that stemmed from his research. A few years later, when the housing crisis hit the U.S., he founded The Financial Crisis Observatory. He founded it as a psychological response to the discourse he had with the markets. People didn’t have a clear view of what was happening. Nobody seemed to know how it happened, but to Didier it was so obvious and natural that the crisis occurred. He wanted to help inform people better with his observatory by showing concrete steps that lead to the housing collapse and other crashes that came before it.

Michael and Didier then go into discussing black swans. Didier does not believe in black swans because they relate to “surprise events.” He says that crisis’s are actually not surprise events at all. They can be expected and are human related. Instead, Didier believes in a notion he calls “Dragon Kings.” His theory is called Dragon Kings because a King is a special person in a country, and dragon means of unique origin. Dragon Kings is how he describes his version of, “surprise events.” Michael and Didier move onto talking about how the world is out of equilibrium. The world is consistently battered with surprises therefore the equilibrium is always off. A lot of economists refuse to acknowledge this and policy makers are not well educated on the subject. Lastly they talk about Didier’s financial bubble experiment. Didier then goes into his background in physics saying it gave him tools to look at things outside the box. Nature doesn’t function in disciplines just like our minds do not work in silos or disciples.

In this episode of Trend Following Radio:

  • The adaptive market hypothesis
  • Dragon Kings vs. Black Swans
  • New economy syndrome
  • Predictive markets
  • Finite singularity
  • Equilibrium of the world
Direct download: 405.mp3
Category:general -- posted at: 10:00pm EST

Michael starts today’s podcast reading the biography of bestselling author Napoleon Hill. Napoleon was born in 1883 and died in 1970. He is most known for paving the way for the new thought and personal success movement with his book, “Think and Grow Rich,” which has become one of the best selling books of all time. Its premise is to help people realize they have the power to create success within themselves by way of conscious and unconscious thought. His message is straightforward, pragmatic and clear.

For the remainder of the podcast Michael plays a presentation by Napoleon. The presentation is centered on making a goal and how to use certain tools to achieve that goal. Napoleon starts off by explaining the power of motives. He says you have no right to ask yourself or anyone to do something unless you give an adequate motive. If you give someone a good enough motive to buy something from you or give yourself a a worthwhile reason to achieve a goal you can sell or accomplish anything. You can also trick your mind to believe anything by repetitive action. If you have faith in what you want to accomplish you will accomplish it. On the same note, faith without action is dead and faith without believing is dead. Napoleon believed that 98%-100% of people sell themselves short because they do not believe in themselves. He says, “The power of thought is the only thing humans have absolute control over.” By repetition, thought, and action you can educate your brain to pick up only the vibrations related to what you want. He stresses that you must make sure your subconscious mind knows you are the boss.

The power of motives, thought, and faith in yourself all goes into being able to create and carry out a plan successfully. Napoleon says to write out your major objective in life and give it a timeline. Make sure it is clear and precise. Keep your major purpose to yourself. Your actions speak for themselves, and the envy of mankind can slow you down. Also, leave your plan flexible. Nobody can put limitations on you except for yourself. With that being said, acknowledge your weaknesses but don’t let them overtake you. If you keep your mind positive, it becomes greater than all the negatives.

In this episode of Trend Following Radio:

  • Conditioning your unconscious mind
  • Setting goals
  • Laws of nature
  • Vibrations of thought
  • Using your greatest asset
  • Individual power
Direct download: 404.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Barbara Fredrickson. Barbara is a professor at the University of North Carolina at Chapel Hill. She is the Kenan Distinguished Professor of Psychology, and the Principal Investigator of the Positive Emotions and Psychophysiology Lab at the University of North Carolina. She is a social psychologist that conducts research in emotions and positive psychology. Her main work is related to her Broaden-and-Build Theory of Positive Emotions which suggests that positive emotions lead to novel, expansive or exploratory behavior, and that over time these actions lead to meaningful long term resources such as knowledge and social relationships.

The podcast starts with Michael asking, “When did this fascination start with you?” Barbara explains that she has had a curiosity with emotional behavior all her life, but it was in college when she realized that almost all research was centered around negative emotions. She began being influenced by evolutionary science, neurosciences, and behavioral changes that occur with emotions. She sees her job as figuring out why positive emotions matter, and why they are important. All emotions have specific action tendencies whether negative or positive. She believes that positive emotions broaden our horizons and negative emotions have values that are much more narrow and specific. Positive emotions bring awareness. They help us become better versions of ourselves. Barbara goes on to explain that it’s not the intensity of positive emotions that are important, it’s the frequency. They are like waves, they arrive and then dissipate. Positive emotions don’t typically have as powerful of moments as negative emotions and that is why Barbara believes they have eluded the interest of scientists for so long.

Michael then brings up Barbara’s work with “the undoing effect.” Barbara expands on this hypothesis by saying, “It first started when other scientists looked at the physiological signature of emotions.” The undoing effect counters the current notion that negative emotions have a signature and positive ones do not. The study showed that positive emotions actually act as reset buttons to your negative emotions. Lastly, Barbara helps listeners look at love through the lens of an emotions scientist. She explains that when we share positive emotions with multiple people it is more effective than when we experience that same emotion individually. She also points out that love is made up of micro moments of positive experiences rather than long lasting ongoing experiences.

In this episode of Trend Following Radio:

  • Inner-experiences and well being
  • The undoing effect
  • Positive negative ratio
  • The body’s definition of love
  • Depression
  • The idea of soul mates
  • Emotional connections
Direct download: 403.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel features a presentation by Charles Faulkner. Charles is a trader, mentor and author who has been featured in Jack Schwager’s “Market Wizards” series. Faulkner is an international expert on modeling the knowledge and performance of exceptional individuals, teams and organizations, and applying the latest research in cognitive neuro-science and linguistics. He has appeared on this podcast five times and has received more positive feedback than any other guest.

Today, Charles’ message is about goals. It is about setting large goals that are above and beyond your everyday concerns. Goals that give your life purpose. Charles comes at this topic in a pragmatic and scientific way. He breaks down how our brains function best, making goals easier to obtain. The first example he gives is a “monkey see, monkey do” experiment. The experiment showed that when you do something repetitively in the correct form, you have a much higher success rate than if you were to be sitting in the stands watching or doing a variety of the same act, but only occasionally doing it right. Charles then moves onto a study centered on the idea of taking internal dialogue and externalizing it. When you write down a goal and draw out what that goal means to you, that is externalizing your inner-dialogue. In addition to writing out your goals, it is important to talk them out. Charles has his students ask each other: “What are you going to do to achieve your goals?” “What will you see, what will you feel?” “Where will you be and who will be there?” Asking these questions vivify your goal. On the flip side, it is important to ask about the downsides. The more important the goal, the more negatives it’s likely to have.

“Goals are a way of directing your attention” says Charles. He goes on, “You don’t set one big goal, you set interim goals so you get rewarded along the way.” Charles goes on to talk about the importance of having milestones so you don’t get discouraged when your goal is not met immediately. People become attached to a certain outcome but they don’t think about why that outcome is important. He asks the question, “What is important about making a million dollars?” When you break down the reasoning behind your goal, it may uncover layers you had never thought about.

In this episode of Trend Following Radio:

  • How to set goals
  • How to achieve your goals
  • Externalizing your inner-dialogue
  • The importance of milestones
Direct download: 402.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Ben Carlson. Ben is the Director of Institutional Asset Management at Ritholtz Wealth Management. He first gained fame with his blog, “A Wealth of Common Sense.” Following his blog success Ben wrote the book, “A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan.”

“A Wealth of Common Sense” is geared toward helping investors gain a simpler decision making process and developing a clearer way of thinking. This is where Michael and Ben take the conversation on today’s podcast. Ben says that people usually become their worst enemy while trading. Cycle to cycle or fad-to-fad is how so many plan their investing rather than building their trading off a solid foundation. Studying the emotional side of trading is a relatively new concept that has sprung up in the last couple decades, which causes people to overlook the necessity of its study in their trading. Ben says, “Envy is the worst of all sins because nobody enjoys doing it.” People are constantly tempted to follow what others do. With the amount of information and “noise” thrown around today we are more informed than ever but most aren’t putting that information in the right context.

Ben uses the documentary, “Jiro Dreams of Sushi” as a great example of having faith in a system matched with an extraordinary amount of discipline. There is nothing fancy about Jiro and his sushi. It is his discipline over the years to perfect his craft that has made him arguably the best sushi chef in the world. Whether it is creating the perfect meal or creating the perfect system, you have to give it time to work. Ben says that discipline is just not there for most people. Constantly asking, “Does this still work? Why should I continue to follow it?” Lastly Mike brings up the phrase “Market timing.” On a daily basis there is someone on T.V. predicting what will happen. The two talk about lack of understanding among investors, relating investment advisors as shrinks to their clients. They are not managers of money but managers of people.

In this episode of Trend Following Radio:

  • Diversification
  • The purpose of a long only commodities investment
  • Speculation
  • Index funds
  • Having a plan
  • Risk and Reward
  • Saying no
Direct download: 401.mp3
Category:general -- posted at: 10:00pm EST

Today marks 400 episodes on Trend Following radio. To celebrate Michael has put together a compilation of Tom Basso interviews. Tom has been on Trend Following Radio four times and his interviews have been among the most popular episodes airing on the show. Michael plays the interviews back to back and throws in a bonus interview at the beginning. The bonus excerpt is a Tom Basso presentation from the early to mid 1990s.

Tom Basso is most famously known as “Mr. Serenity” in Jack Schwager’s “The New Market Wizards”. Now retired from managing client money, Tom was president and founder of Trendstat Capital Management. He became a registered investment advisor in 1980, a registered commodities advisor in 1984, and was elected to the board of the National Futures Association in 1998.

Throughout this 4 1/2 hour podcast Michael and Tom cover a broad range of topics including: Tom’s background and how he got into trading, speculation, emotional rushes, emotional devastation, catastrophic events, separating trading from politics, behavioral economics, advice to newcomers entering the CTA industry, location independence, time management, stoicism, black swans, and the importance of routine.

Michael and Tom also go through listener questions spanning topics including: trading regrets, money management vs. trading, tinkering with current systems, drawdowns, one-system vs. multiple systems, thoughts on Alan Watts, emotions during both losing and winning periods, exit strategies, practice trading vs. live trading, money management, risk control, how to handle skeptics, serenity, John W. Henry, coin flip entry method, percent betting, comfort with uncertainty, initial capital at risk vs. unrealized gains, and fighting against your gut reaction. This podcast includes a wealth of knowledge worth listening to over and over again.

Direct download: 400.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Brett Steenbarger. This is his 2nd appearance on Trend Following Radio. He is a Clinical Associate Professor of Psychiatry at New York State University, author of “The Daily Trading Coach,” “The Psychology of Trading,” and “Enhancing Trader Performance.” His newest work is “Trading Psychology 2.0: From Best Practices to Best Processes.”

Michael and Brett start the podcast off by asking the question, “Do people really have that burning desire to succeed?” Brett says he does believe traders are drawn to trading for the money outcome, but also for the allure of not working a 9-5 job or the dream of scoring easy riches. Brett breaks it apart further by explaining the motivations for different traders: Practice and process are essential. He says, “You hear traders talk about finding your edge and sticking to your edge.” Finding your edge is a continual process because the markets are forever changing. You must adapt.

Brett goes on to discuss the importance of back-testing and how valuable it is to your strategy. He gives the example that elite performers spend more time in preparation than in performance. That preparation helps develop a strategy and prepare the performer mentally. It pushes the performer to develop the best of what they are doing. Brett then details the difference between repeated performance and deliberate practice.

Creativity is the next big topic discussed. Brett says it’s an individual’s creativity that breaks them away from the herd. A trader that has the creativity to diversify and test new strategies. Brett then touches on what it means to “trade your personality,” how paramount it is to have the right trading mentor, and the advantages of creating a checklist to bring out your best practices and make them routine. Lastly, Michael and Brett dig into the necessity of eating, sleeping, physical exercise, and yoga to help fuel a positive emotional experience in life and in trading. If you have been having trouble with the psychological aspects of your trading, this episode is for you.

In this episode of Trend Following Radio:

  • The emotional “buy in”
  • Checklists
  • Finding a smooth equity curve
  • Repeated performance vs. deliberate practice
  • The role of fitness and health in trading
  • The moment of now
  • Systems trading vs. discretionary trader
  • Relationship between volatility and volume
Direct download: 399.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel talks critical thinking and behavioral finance. He begins with an article excerpt about locker room etiquette and loops around to the parallels between sports psychology and trading psychology. Michael argues that critical thinking has gone by the way side in the general populace and if you have an alternate way of thinking, one that is not with the masses, then you have a leg up.

Digging in Michael explores excerpts from a paper by Howard Marks titled, “Inspiration from the World of Sports.” The paper outlines the consistencies between sports and trading. Michael discusses bullet points from the article; 1. Trading and sports are competitive. Some succeed and some fail, and the distinction is clear. 2. In the long term the better returns go to superior investors. 3. An investment career can feel like a basketball or football game with an unlimited number of quarters.

Michael also explores from Howard Marks the career of Yogi Berra, his achievements and his baseball philosophy. Howard points out how consistent Yogi was in his performance and how that is exactly what he likes to see in his investing. Howard then compares Yogi Berra and Reggie Jackson (Reggie was far less consistent then Yogi). Howard says that he would rather have returns like Yogi, nice and consistent. Michael argues the case for trading like Reggie’s baseball performance. He says the Reggie Jackson home run model is more in line with venture capital, film financing, the MIT blackjack team, and trend following trading, for example. The point being that home runs will pay for the strike outs. Michael ends the podcast by pointing out that Reggie and Yogi are ultimately in the same game, but it is up to you to decide what style of trading you want.

In this episode of Trend Following Radio:

  • Consistency vs. the home run
  • Quarterly performance
  • Trend following performance
  • Emotion in human nature
  • Irrationality in investing
Direct download: 398.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Jim Rickards. Jim was front and center during the 1998 LTCM blow-up. He was a partner and general counsel for Long Term Capital Management. Following their blowup, he was principal negotiator in the 1998 bailout of LTCM by the Federal Reserve. He has had a bird’s eye view of some of the most interesting events in the economy over the last 20 years.

Michael and Jim dive right into the sequence of events that lead to the devaluation of the Thai Baht in May of 1997. Jim then goes into the chronology of events that took place leading to the fall of Long Term Capital Management. He makes clear that LTCM had some of the brightest brains in finance working for them at the time, including Nobel Prize winners and a vast number of PhD’s from MIT, Harvard, Stanford, Yale, etc. Jim summarizes the events prompting Russia to default on their debt which let loose a sequence of events leading to LTCM losing four billion dollars in one month. Wall Street cared not for the four billion LTCM loss but because they had over 1 trillion dollars of derivatives contracts tied to LTCM positions. Many thought all of Wall Street would have been taken down if LTCM went down. That was when the Fed intervened and organized a bailout.

Jim goes on to talk about the changes that took place and the lessons that were learned from the fall of LTCM. He says the three lessons that should have been taken away from the crisis were; derivatives are dangerous, leverage is dangerous and getting banks involved is dangerous. The changes started with repealing Glass Steagall in 1999, rewriting laws so they could do “swaps” on everything, and then in 2006 the SEC changed leverage rules on brokers. So in short regulators ended up doing the complete opposite of what they should have learned from LTCM. Michael asks the question, “Why were the same people who were saying that the economy was great till the day it crashed, the same people that were responsible for fixing it?” Jim says policy makers never see bubbles. He gives two possible explanations for why policy makers act as they do; conspiracy or complete incompetence. He believes it is more incompetence rather than a conspiracy and goes on to explain why.

Michael and Jim then dive into “models”. If you have the wrong models you will get the wrong results every time. Michael notes that the right models are rooted in behavioral finance. Jim notes that the Fed does not use behavioral economics. Jim talks about the three elements that his model is based on: behavioral finance, complexity theory and inverse probability. He goes into great depth on what all of those models are and gives real life examples for them.

Direct download: 397.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Kathleen Eisenhardt. Kathleen is Co-Author of the best selling book “Simple Rules.” She is also the Co-Director of the Stanford Technology Ventures Program. Her book’s foundation is based on the argument that too much structure and too many rules don’t get products out the door and the other extreme, no rules or structure tend to not produce results either. In short, simplicity beats complexity. Her book “Simple Rules” is not just about rules in business, but in all aspects of life; sports, entertainment, investing, diets, etc.

Kathleen defines simple rules as shortcuts that save on time and are more commonly known as, “rules of thumb” (heuristics). Michael and Kathleen pull in examples from Google, Netflix, The White Stripes, Billy Bean and the Oakland A’s, General Motors, Stanford football and an expedition in the South Pole launched in 1912. Kathleen shows in all the scenarios how people who modeled the past failed and how the simple route conquered the complex every time. She stresses that the philosophy, psychology, and the system itself may not be so simple, but the rules to follow are.

Kathleen and Michael go on to discuss people who make a living out of of being complicated. Lawyers, accountants, lobbyists make a living out of having a lot of rules nobody can decipher. Kathleen discusses the differences in risk adverse people, more strategic people and the people who just go ahead and wing it in business and in life. Kathleen explains her three step process in creating simpler guidelines. “Bottleneck” is the 2nd rule in the three step process. The “Bottleneck” is what keeps you from getting to the objective. It’s what holds you up from moving forward. You solve the bottleneck and you have solved your problem.

In this episode of Trend Following Radio:

  •     Bottleneck concept
  •     Complexity is not always best
  •     Tax code for political gain
  •     Simplifying government
  •     Improving your probabilities with rules
  •     The Federal Reserve
Direct download: 396.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Rob Walling. Rob may not be a trader, but he is a serial entrepreneur. And trading at its heart, after all, is an entrepreneurial activity. Rob started early. When he was eight his parents purchased an Apple computer and he learned to code to create video games, and when he got into college he realized coding could be profitable. He asked himself, “What can I do that I can leverage?” In the late 90’s he got his first paid job writing code for a consulting firm and around 2007/2008 he transitioned full time into creating and producing his own products.

Rob talks about learning from every job and every encounter. He speaks to real life experience and how it is paramount to success. Rob was passionate from the start about coding. He did it long before he thought it could be a paying gig. Michael and Rob also give examples of why you need to start at the beginning and figure out how to build your audience. If you are in your 20’s you especially need to realize that you don’t know everything. You are missing something. No matter how smart and motivated you are, you need that real life experience.

When trying to start your business Rob gives examples such as: pick a few people that resonate with you and focus in on them, only take the information you need at that point in time, and above all, stop shooting for the Zuckerberg “dream”. He sees so many businesses trying to be a “one hit wonder”. They aren’t thinking about building a business that is going to last. Rob has a straight forward approach to bootstrapping called the stair-step approach that he outlines on the podcast (as well as on his website).

In this episode of Trend Following Radio:

  • Rob Walling’s “Stair-Step Approach”
  • Growth hackers
  • The act of creating
  • Focusing on the “Unicorn” rather than reality
  • Filtering your information
  • Skin deep information
Direct download: 395.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael talks the timelessness of sticking with your system. Michael uses Jack Schwager and his books Market Wizards and The New Market Wizards as prime examples of timelessness. Although they were written years back, he argues they have not lost an ounce of value in today’s trading world. Michael harps on critics that say the Market Wizards books have no place in 2015 markets, noting that one of the great concepts introduced in Schwagers’ books was the notion of “systems”. Although the concept of having a system had been around for over 100 years, Schwager was one of the first to present and teach in an interview format.

Michael then segues into a clip with Howard Lindzon of Stock Twits. Howard further makes the point that having “Any system is better than no system”. He goes on to say, “You have to have a system to beat another system.” Howard talks about Jerry Parker, his trading style and why he has become so successful. Covel asks listeners, “What kind of system do you want? What are the risks and rewards? There are all kinds of systems out there. Have you done the work to find out the pros and cons? What kind of life do you want to have?” The system you choose will dictate that. People who tell you the Schwager books are dated are the same people that will sell you anything. These people go off of gut, intuition or even magical feelings, and that is their decision-making process. Trust that the highest achievers and money-makers on Wall Street trust their systems, painstakingly researched and developed. When times are good they leave it alone, and when times are bad they leave it alone.

Covel plays one last legacy excerpt from Bill Dunn. Dunn lays out that his approach is long term trend following and quantitative. His company does not override their signals ever and they have serious risk management programs in place. They have a 1% probability of losing 20% or more in a one month period. However, the client can choose more or less risk. He shows how his firm does not correlate with the S&P and their positions and trades are completely transparent to their clients. Dunn makes it clear that his performance is not a result of anyone’s judgment. It is a result of long tested simulations and models. Timelessness personified.

In this episode of Trend Following Radio:

  • Human nature doesn’t change
  • Timelessness
  • Behavioral finance
  • Sticking with a system
  • Risk management
  • Bill Dunn on trend following
Direct download: 394.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Emil van Essen. Michael first heard of Emil from former turtle, Lucy Wyatt. The first thing to note is that he is not a trend following trader. He is a commodity spread trader. Emil has been a CTA since 1997, but his first trading experience was at the early age of 12. Emil delivered papers when he was younger and would take the money and invest in rare coins. The owner of the coin store happened to be a commodity trader. He helped teach Emil about trading commodities and even put in trades for him. Emil’s first trading job was in 1986 at the age of 21.

Michael and Emil start the podcast explaining spread trading. Emil describes trend following as one dimensional whereas spread trading in his view has a multidimensional trading surface because of all the directions a trade can profit rather than if the market only goes up or down. Emil refers to his trading as not systematic but model driven. At the base of his every trade is a model and they can tweak the model accordingly as they see fit–a big distinction compared to trend following.

Emil’s firm is one of the only CTA’s that are negatively correlated to trend followers. He also believes that following rules 100% of the time is a bad idea. “Our brains are far more smarter than computers,” he states. Emil adds, “We need to know not to be emotional about trades but if you don’t adapt to change then you won’t last.” Emil also throws around the controversial word, “prediction.” He says that when he says “predication”, it is actually more about “probability.” He tries to find a method that reliably tells him that something is going to happen more often than not. Emil says, “You try and find an edge. Find consistent behavior patterns that give you a risk adjusted return.”

In this episode of Trend Following Radio:

  • Growth of commodity ETFs
  • Diversification
  • Raising money vs. Making money
  • Quality Investors vs. Quantity of Investors
  • Beta and Alpha
  • Not all investors are created equal
Direct download: 393.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael talks about one of his favorite subjects: baseball and numbers. He profiles arguably one of baseball’s greatest managers, Earl Weaver of the Baltimore Orioles. Weaver believed that baseball, just like trend following, always came back to numbers. He knew the right formula was the 3-run home run.

Coincidentally, Covel’s favorite team growing up was the Orioles. They were one of the “it” team in the 1970s and early 1980’s. Unknown to most, Earl Weaver, the Orioles manager, had a strategy that was a foundation for the book (and later turned Hollywood movie) “Moneyball”. His approach to building a winning team not only applies to baseball, but also to many other aspects of life, including trend following.

Covel plays a clip about Weaver, profiling how he operated and changed the mentality of how to put together a baseball team. Focusing on every “out” was at the very core of his strategy. He looked at the whole arc of the game rather than just the beginning, middle or end. Weaver had a plan for every individual player on his team.

Weaver is just as responsible for Covel’s trend following mindset as some of the most successful trend following traders he has met. He showed that home runs win and pay for mistakes. Ask yourself: “How can I put myself in the position to capture the next home run?” That doesn’t mean to be reckless. The podcast ends with a classic Earl Weaver clip that throws a few “F” bombs around. Listener discretion is advised.

In this episode of Trend Following Radio:

  • Trend following as a numbers game
  • Earl Weaver’s Moneyball legacy
  • Why homeruns pay for the losses
  • Consistency as an illusion
  • Trading is/as a game
  • Know your strategy and stick with it
Direct download: 392.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio Michael Covel interviews Charles Poliquin. Charles is recognized as one of the worlds most successful strength coaches and has coached Olympic to professional athletes. He speaks with Michael about his new venture with Ed Seykota as well as his vast health and exercise knowledge.

Poliquin was Canada’s second youngest black belt at the age of 14, has mastered 6 different martial arts, and is influenced strongly by Bruce Lee, karma and other eastern influences. After getting into karate at the age of 10, he moved into lifting weights at the age of 14 and fell in love instantly with the sport. He took on his first training client in his first year of college at the age of 17 and has named himself the “Strength Sensei ”.

Charles gives countless bits of advice on how to keep moving forward in life and fitness: “If you don’t have an expiration date then the goal doesn’t mean anything. There is no pressure.” Keep the competition going with yourself. Also, have a good balance of work and time off. He points out that sleep is one of the most underrated subjects within health and fitness, but it should be a priority. Lastly, Michael and Charles talk about testosterone levels and how they are deeply affecting men and women around the world. Charles explains both the environmental and nutritional basis for low testosterone and why it has such a huge impact on the human mental state.

“Progression not perfection is what you should be focusing on. “ --Charles Poliquin

“The general who sleeps the most wins the war.” --Charles Poliquin

In this episode of Trend Following Radio:

  • Long distance cardio vs. short sprint workouts
  • The importance of sleep to your health and fitness
  • Meditation and mindfulness
  • How testosterone levels affect the psychology of men and woman
  • Relationship between top athletes and top executives
  • How to stay motivated
Direct download: 391.mp3
Category:general -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio, Michael opens up about uncertainty and uses one of his favorite writers to illustrate: Christopher Hitchens. Hitchens is certain that he doesn’t know, and sees doubt and skepticism as our only path to enlightenment. He invites us to open up to the possibility that doubt will always be in front of faith–whatever that faith may be about. Covel sees Hitchens insights well beyond religion, and connects his comments to his trading world.

Next, Michael excerpts a recent soundbite from Jim Simons on Trend Following. He is one of the most successful traders ever. A great track record. 100% systematic. Uses price action. He is very clear that fundamental analysis is not his direction. How does Simons really trade? Will we ever know? No. Simons is tight lipped. Is Simons a trend follower? Does he use trend following at all? Worthy questions given his limited public statements. Covel digs into Simons recent comments about trend following asking the hard questions few are prepared to pose.

Lastly, Covel brings in Alan Watts to connect both Hitchens and Simons. Watts wonders why children have been forced into a learning process that doesn’t help them in the long run. He sees culture as leaving children at a disadvantage. He points out that the rules of the game are not given to children. Children are strung along. The powers that be keep key information away from the child, and even the adult, forcing them to always rely on the system. So while everyone is in desperate need of the future, ignoring the present moment is inevitable. Covel easily connects this to the markets and trading reminding us all that the gatekeepers are not your friends.

In this episode of Trend Following Radio:

  • Christopher Hitchens on certainty v. uncertainty
  • Jim Simons on Trend Following
  • Faith v. Skepticism
  • Is trend following dead?
  • Buying pleasure: a complete fallacy
  • Constraints on the truth
Direct download: 390.mp3
Category:investing -- posted at: 10:00pm EST

Today on Trend Following Radio Michael Covel has a conversation with Joey Yap, Feng Shui expert, founder of the Mastery Academy of Chinese Metaphysics and self-made entrepreneurial millionaire. Feng Shui, as Joey explains it, is “about how your environment supports you”. Further digging into the subject, Joey and Michael examine the world as a network of positive and negative energies.

After explaining some of the core principles of Feng Shui, Joey discuss how the practice has been “bastardized” by the West. Westerners believe it’s the items themselves that project energy – resulting in an entire trinket industry that has developed – when nothing could be further from the truth. The items exist merely for the energy to flow around because, as Joey explains, flow is everything.

Joey then goes on to discuss the myriad ways in which the tenets of Feng Shui apply to the business world. Think of a bustling office as a closed environment of continually crossing positive and negative energies. Collectively, this energy is called the “corporate culture.” But each individual environment is governed by a dominant energy, and that energy is determined by the company leaders. And, as you’d expect, an overall positive energy flowing throughout an environment will always produce better results. Many of the core principles seen in behavioral economics, trend following and Zen shine through in this episode, but from another perspective.

In this episode of Trend Following Radio:

  • Experts: get close to them and learn
  • You can’t predict the future, you can only see patterns
  • If you don’t like your destiny, go the other direction
  • Change your environment, change your life
  • Corporate culture: an energy determined by leaders
  • You don’t have to invent – fix something

Want a FREE Trend Follоwing DVD? Find it here

Direct download: 389.mp3
Category:entrepreneurship -- posted at: 10:00pm EST

On today’s episode of Trend Following Radio, Michael Covel opens the conversation by taking a look at the concept of faith, and how it has no place in the trading world. In trading, logic and reason trump faith. If you can’t “grow” up and use reason to gather information and form strategy, Michael notes, then you have no place at the “adult” table.

Next, Michael outlines core decision-making precepts. Sometimes making the right move means going against your instincts, and it’s at these times that you need to force yourself to make a decision – even if it means quitting. People tend to equate quitting with failure when the truth, as Michael points out, is that sometimes quitting is what keeps you in the game. This line of thinking is again linked to logic rather than faith – the erroneous faith that if you necessarily stick it out (i.e. a losing trade in the markets) success will follow.

Other topics covered in this episode touch on how financial advisors primarily exist to push mutual funds and buy and hold orthodoxy, why investing without a plan dooms you before you begin, and why embracing the challenge of how the world and investing really works makes you a smarter investor.

In this episode of Trend Following Radio:

  • Logic over faith
  • Financial advisors: there to give mutual fund advice
  • Adapting your strategy
  • How quitting can keep you in the game
  • Forcing yourself to make decisions
  • Risk and reward

Want a FREE Trend Follоwing DVD? Find it here

Direct download: 388.mp3
Category:psychology -- posted at: 10:00pm EST

Today on Trend Following Radio Michael Covel talks with author and startup entrepreneur Gabriel Weinberg about the concept of traction. Gabriel points out that in the business world traction is about far more than simply getting a grip and hanging in there – it’s about then moving forward, ultimately toward a defined goal (customers).

Just like a trend following trader that uses quantitative methods to invest scientifically, Gabriel relies on numbers and hard data to inform him about which marketing channels are working and which should be focused on, and which are less effective and should be dropped. The result is a streamlined marketing approach that’s allowed Gabriel, a self-published author, to sell upwards of 35,000 copies of his book.

Michael and Gabriel also talk about how psychology factors into startup entrepreneurship. For anyone investing their time and energy into a project, both passion and resiliency are paramount. If you aren’t passionate about the work you’re doing, and if you don’t genuinely enjoy the challenge of bringing a product to market, then you’re doomed before you ever start. Best, as Michael suggests, to run back to the office cubicle.

In this episode of Trend Following Radio:

  • Reaching your goal, then setting another
  • Resilience: vital to the entrepreneur
  • Committing to your idea
  • Psychology: the main barrier to success
  • Understanding that it’s okay to fail
  • Enjoy the challenge – or go do something else

Want a FREE Trend Follоwing DVD? Find it here

Direct download: 387.mp3
Category:psychology -- posted at: 10:00pm EST

Today on Trend Following Radio, Michael Covel takes time out to highlight the fact that trend following isn’t simply about trading. From gamblers to pharmaceutical executives to those in the film and music industries, trend following is a strategy rooted in human nature itself.

As an example, Michael examines the success of film producer Jason Blum. In direct opposition to the Hollywood mantra of Spend! Spend! Spend!, Blum has chosen another path. Blum, recognizing that big budgets don’t necessarily mean big profits, developed a filmmaking system based on low budget projects. Blum fully understands that close to half of his films will flop. But he also understands that a handful of box office successes will more than cover those losses. This is the essence of trend following.

Michael goes on to quote from a 2005 article by best-selling author Michael Crichton. Crichton, talking about the then-burgeoning field of futurism, explains that these so-called futurists don’t actually know any more about the future than the average man on the street. These “experts” are guilty of the same flawed thinking that spews forth from the minds of traders who think they know what the market will do tomorrow.

In this episode of Trend Following Radio:

  • Why embracing uncertainty pays big
  • Trend following: it’s human nature
  • Losses: acceptable when you strategize to cover them
  • The sunk cost fallacy
  • Opening your mind to alternative ways of thinking
  • The mistake of blindly accepting the word of “authorities”

Want a FREE Trend Follwing DVD? Find it here.   

Direct download: 386.mp3
Category:trend following -- posted at: 10:00pm EST

This time on Trend Following Radio, Michael Covel talks with Paul Slovic. Paul is president of Decision Research and a professor of psychology at the University of Oregon, and today he talks with Michael about the science behind risk perception.

To demonstrate how people tend to conflate actual risk with their perceptions of risk, Michael and Paul discuss a topic that’s always been a hot button issue in the public consciousness, nuclear power. In the early days of this industry, people were rightfully concerned with the possible mismanagement of such a potentially dangerous technology – concerns seemingly crystallized by the partial meltdown at Three Mile Island in 1979. Similar concerns continue to be raised today, particularly in light of the Fukushima disaster of 2011. But as Paul explains, neither of these tragedies can completely outweigh the obvious benefits of nuclear power. It’s a case of risk perception to overcome the actual risk posed.

The conversation also focuses on the role of the media in influencing people’s decision-making processes. Why is it, you might ask, that the media spends so much more time pushing negative stories than positive ones? The answer, according to Paul, goes back to biology. It’s a survival mechanism in human beings that we’re affected far more by negative stimuli than positive stimuli. This makes sense when you consider the external dangers we’ve faced in our evolution. So today, we tend to harp on the bad things that happen while ignoring the good.

In this episode of Trend Following Radio:

  • The psychometric paradigm of risk perception
  • Balancing risk vs. reward
  • The concept of affect heuristics
  • How the media sways the public’s risk assessment
  • Fast vs. slow thinking
  • Risk in the context of decision making

Want a FREE Trend Follоwing DVD? Find it here.

Direct download: 385.mp3
Category:psychology -- posted at: 10:00pm EST

On today’s show, Michael Covel talks about decision-making, and how too often people allow the "rules" of others to dictate the actions they take. This, as Michael explains, is indicative of the politically correct culture that’s taken root in all of society.

What are we to think when wildly successful comedians such as Jerry Seinfeld, Louis C.K, and Chris Rock flat-out refuse to play college campuses because of the close-minded, irrationally sensitive nature of today’s student bodies? How have we arrived at a place where anything less than absolute conformity to preselected attitudes and beliefs means running the risk of being labeled "something"? Racist? Homophobic? Sexist? The list goes on.

What’s worse, as Michael points out, is that this culture of victim-hood has many feeling they’re entitled to certain things simply because they "exist". These are the people who blindly accept societal rules, rather than analyze and develop proper strategy. Good decision-making, whether in trading or everyday life, means developed a plan and a set of rules and then sticking to them. Because in the end, everyone gets what they want (to paraphrase trader Ed Seykota).

In this episode of Trend Following Radio:

  • Good decision-making through clarity
  • Examining identity politics
  • Operating under your own rules
  • Political correctness: it’s about agendas
  • Good trading means using your system and your mind
  • The importance of staying focused

Want a FREE Trend Follwing DVD? Find it here.   

 

Direct download: 384.mp3
Category:psychology -- posted at: 10:00pm EST

Today on Trend Following Radio Michael Covel talks with Lawrence McMillan of McMillan Analysis Corporation. The topic of discussion is options, their value in terms of overall strategy, and how their trading has evolved over the preceding decades.

The conversation opens with Lawrence talking about his days at historic Bell Labs – a research company founded in the 19th century by Alexander Graham Bell – and the initial difficulty in working with options due to their complicated nature and the level of technology required. Later, Michael asks Lawrence to talk about the CBOE Volatility Index (VIX) and how, since the subprime crisis of 2008, many are looking at the VIX as long-term insurance for the future. One of the problems with that strategy, as Lawrence points out, is that many people fail to take into account that VIX only measures market expectations for the next 30 days.

Also discussed today are leverage as a financial tool and the concept of the black swan – unforeseen events that have a major impact, but only rationalized after the fact. Lawrence brings decades of experience and wisdom, gain perspective.

In this episode of Trend Following Radio:

  • American vs. European-style options
  • The logic behind VIX
  • Leverage as a tool
  • Understanding puts and calls
  • Long and short selling
  • Examining the subprime mortgage crisis of 2008

Want a FREE Trend Follwing DVD? Find it here.

Direct download: 383.mp3
Category:general -- posted at: 10:00pm EST

On today’s show Michael Covel examines the duplicitous nature of the mainstream financial media, how its talking heads insist on pretending they can predict the future, and how even its most respected publications promote seemingly opposing ideas.

To emphasize his point, Michael opens the discussion by talking about the publication process for his first book, Trend Following. After being passed on by one publisher, he was eventually signed by the publishing side of the Financial Times conglomerate. The same FT, as Michael points out, that’s been trashing trend following for decades.

And nothing has changed. Michael reads from a September 2015 FT article in which author Stephen Foley gives trend following the traditional mainstream bashing we’ve come to except. But in the same issue, FT conducts an interview with Nobel Prize-winning economist Robert Shiller, in which Shiller says, he sees a massive stock market bubble – the kind of thing trend following has repeatedly proven to be best-equipped to handle.

In this episode of Trend Following Radio:

  • Trend following: a system, not a theory
  • Opinions are worthless without strategy
  • The mainstream media’s continued attacks on trend following
  • No one knows the future – embrace the idea
  • Theories are conjecture
  • Focus on the now – that’s the indicator

Want a FREE Trend Follwing DVD? Find it here

Direct download: 382.mp3
Category:trend following -- posted at: 10:00pm EST

On today’s show Michael Covel talks with memory expert and Memrise co-founder Ben Whately. Not surprisingly, central to the discussion is memory and how the human brain interprets and processes information.

When we think of fond memories, we often see events from someone else’s point of view. Ben explains that this is because in addition to our own personal recollections, we have also encountered alternate perspectives of the event through such devices as photos or home movies. Our brain mashes the imagery together and produces a composite image – a memory.

Michael and Ben talk about how humanity’s view on memory throughout time has always been a reflection of the best technology of the era. This leads to one of Ben’s favorite subjects, language. According to Ben, the way language is taught today – rote memorization – is completely wrong. Language is best learned by immersing yourself in the culture of the people who speak it. Take his memory lessons throughout this episode and apply them tomorrow.

In this episode of Trend Following Radio:

  • Memory, a composite of previously formed memories
  • How memories are encoded in the brain
  • To the brain, remembering equals imagining
  • How the most effective way to teach is to be entertaining
  • Technology, and how it affects our views on memory

Want a FREE Trend Follwing DVD? Find it here 

Direct download: 381.mp3
Category:psychology -- posted at: 10:00pm EST

On today’s show, Michael Covel talks about how people that are ahead of the curve often find themselves isolated – even ridiculed – by those who don’t yet get it. This, as Michael points out, is certainly true for trend following traders, and some of the sharpest push back comes from the talking heads of the media.

To emphasize his point, Michael plays clips from an interview between CNBC’s Joe Kernen and Graham Capital’s Ken Tropin, a highly successful trader who heavily incorporates trend following techniques into his overall strategy. To Michael, of utmost significance in the two men’s exchange, is the fact that Kernen bumbles through the interview wholly unprepared (either via incompetence or on purpose). Kernen didn’t respect Tropin or his strategy enough to do even the most basic homework beforehand.

Michael’s discussion then moves on to the topic of uncertainty. In direct opposition to media personalities, that are paid to pretend to know what the market will do, trend following traders embrace the knowledge that they can’t predict the future. Uncertainty makes the game more exciting, and not just the investment game. As Michael demonstrates, the principles of trend following can be effectively applied across myriad disciplines.

In this episode of Trend Following Radio:

 

  • Recognizing that without a strategy, you’re at the mercy of the machine
  • Embracing uncertainty
  • Understanding that knowing every market move won’t help without a plan
  • The importance of setting your strategy beforehand
  • Seeing that media personalities are paid to pretend to know all
  • How the principles of trend following apply to other disciplines

Want a FREE Trend Follwing DVD? Find it here

Direct download: 380.mp3
Category:trend following -- posted at: 10:00pm EST

Today’s guest is prolific author, mathematician and entrepreneur John Casti. John talks with Michael Covel about social mood, and how ultimately the events that urge populations to move in one direction or another are largely unpredictable.

John discusses the concept of socionomics – the idea that the collective beliefs of a society about its future will influence the kinds of social events to occur in that future. And while these triggers, which John refers to as X-events, can’t be predicted, John explains that they can absolutely be prepared for by understanding the greater social context of the region.

As an example, John cites the so-called Arab Spring. As he points out, no one could have predicted the single event that moved millions in the Arab World to take to the streets in protest. But it wasn’t hard to see that the region had long been primed for something big. Charles Faulkner recommended John as a guest (even though he only knew his work). Good tip from Charles!

In this episode of Trend Following Radio:

  • The fundamentals of socionomics
  • The science of surprise
  • Understanding that social mood is time-dependent
  • How X-events can trigger mood reversals
  • Isolating the collective social belief
  • The mindset of “the crowd”

Want a FREE Trend Following DVD?  Get it here

Direct download: 379.mp3
Category:psychology -- posted at: 10:00pm EST

On today’s show Michael Covel vents some of the frustration he’s been feeling over the past few weeks. Central to his discussion is the idea of failure, and how the vast majority of people are unable – or unwilling – to accept how vital it is to overall long-term success.

Michael opens by pointing out that most people today seem to be under the delusion that someone will always be there to take care of them. This, as Michael explains, is by design. Government and the talking heads of the media want the average citizen to be soft, dependent, and unwilling to take risks. Safety and security, according to the official line, should be valued above all else (even if it is all an illusion).

But this line of thinking doesn’t account for the truly successful of the world. Those who’ve risked everything and succeeded – specifically because they failed and learned from their mistakes. Success requires tenacity and dedication, but neither are required if you don’t take a risk in the first place. Because if you never take a shot, you’ll never hit the target.

In this episode of Trend Following Radio:

  • Understanding that success requires failure
  • Seeing past investment myths
  • Recognizing that no risk means no profits
  • Understanding that there’s no such thing as a perfect strategy
  • Shattering the notion that someone will always take care of you
  • Accepting that there are no guarantees

Want a FREE Trend Follwing DVD? Find it here.

Direct download: 378.mp3
Category:psychology -- posted at: 10:00pm EST

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

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

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

In this episode of Trend Following Radio:

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

Want a FREE Trend Following DVD?  Get it here.

Direct download: 377.mp3
Category:psychology -- posted at: 10:00pm EST

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

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

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

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

In this episode of Trend Following Radio:

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

Get a free Trend Following DVD here.

Direct download: 376.mp3
Category:trend following -- posted at: 10:00pm EST

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

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

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

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

In this episode of Trend Following Radio:

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

Want a FREE Trend Following DVD? Get it here

Direct download: 375.mp3
Category:trend following -- posted at: 10:00pm EST

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

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

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

In this episode of Trend Following Radio:

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

Want a FREE Trend Follwing DVD? Find it here

Direct download: 374.mp3
Category:investing -- posted at: 10:00pm EST

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

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

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

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

In this episode of Trend Following Radio:

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

Get a FREE Trend Following DVD by going here

Direct download: 373.mp3
Category:investment -- posted at: 10:00pm EST

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

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

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

In this episode of Trend Following Radio:

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

Get a FREE Trend Following DVD here.

Direct download: 372.mp3
Category:trend following -- posted at: 10:00pm EST

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

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

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

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

In this episode of Trend Following Radio:

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

Want a FREE Trend Following DVD? Get it here

Direct download: 371.mp3
Category:trend following -- posted at: 10:00pm EST

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

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

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

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

In this episode of Trend Following Radio:

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

Want a free Trend Following DVD? Get it here

Direct download: 370.mp3
Category:investing -- posted at: 10:00pm EST

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

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

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

In this episode of Trend Following Radio:

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

Want a FREE Trend Following DVD? Get it here

 

Direct download: 369.mp3
Category:general -- posted at: 10:00pm EST

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

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

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

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

In this episode of Trend Following Radio:

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

Get a FREE Trend Following DVD here.

Direct download: 368.mp3
Category:entrepreneurship -- posted at: 10:00pm EST

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


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


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


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


In this episode of Trend Following Radio:


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

Get a free Trend Following DVD here

Direct download: 367.mp3
Category:investing -- posted at: 10:00pm EST

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

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

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

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

In this episode of Trend Following Radio:

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

Want a FREE Trend Following DVD? Get it here.

Direct download: 366.mp3
Category:philosophy -- posted at: 10:00pm EST

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

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

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

In this episode of Trend Following Radio:

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

Want a FREE trend following DVD? Get it here.

Direct download: 365.mp3
Category:psychology -- posted at: 10:00pm EST

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

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

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

In this episode of Trend Following Radio:

  • Why simple strategies are better than complex ones
  • The importance of defining your risk as a number
  • How risk and reward are two sides of the same coin
  • Why going for the average is a losing strategy
  • The difference between hiring a financial advisor and an trader
Direct download: 364.mp3
Category:investing -- posted at: 10:00pm EST

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

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

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

In this episode of Trend Following Radio:

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

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

Direct download: 363.mp3
Category:trend following -- posted at: 10:00pm EST

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

Direct download: 362.mp3
Category:investing -- posted at: 10:00pm EST

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

Direct download: 361.mp3
Category:investing -- posted at: 10:00pm EST

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

Direct download: 360.mp3
Category:trend following -- posted at: 10:00pm EST

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

Direct download: 359.mp3
Category:investing -- posted at: 10:00pm EST

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

Direct download: 358.mp3
Category:general -- posted at: 10:00pm EST

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

Direct download: 357.mp3
Category:general -- posted at: 10:00pm EST

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

Direct download: 356.mp3
Category:general -- posted at: 10:00pm EST

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

Direct download: 355.mp3
Category:general -- posted at: 10:00pm EST

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

Direct download: 354.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Steve Burns on his third appearance on the podcast. Steve Burns has been investing in the stock market for over 20 years. He is the author of seven books, ranks near the top 500 of all reviewers on Amazon.com, and is one of the sites top reviewers for books about trading. Additionally, Burns has singlehandedly developed an exceptional Twitter following. Today, Burns and Covel answer questions from readers of Burns' forum. Covel and Burns discuss the self-publishing world; how one goes about making choices in social media; getting over the obstacle of fundamentals; mindfulness and the writings of Alan Watts; backtesting processes; brand new traders being introduced to a model that loses 60% of the time; survivorship bias; predictive vs. reactive technical analysis. For more information on Steve Burns, visit newtraderu.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 353.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Tim Larkin on today’s podcast. Larkin is one of America’s leading Pro-Victim Rights and Personal Safety Advocates. He has had a 25 year career where he has trained over 10,000 clients in 52 countries in how to deal with imminent violence. His books include How To Survive The Most Critical 5 Seconds Of Your Life and Survive The Unthinkable. Covel and Larkin discuss the Virginia Tech killings and why it is important to study violence; looking at sports injuries for the purpose of self-defense; honor in fighting; the relation between prison gang leaders and CEOs; the importance of focusing on the man and his mind rather than the tool; avoidable acts of violence; why the United Kingdom did not allow Larkin into the country; and avoiding violence from a game theory perspective. For more information on Tim Larkin, visit targetfocustraining.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 352.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel offers a reminder of how to think and act when responding to certain types of questioning and the translation to markets. Covel can think of no more perfect example than the “greed” exchange between Milton Friedman and Phil Donahue. Covel discusses Milton Friedman more and brings and expands the discussion into the general take-down of bullshit. Covel also discusses the importance of 'losers' (see: zero sum) in the market and why people acting irrationally offers perpetual opportunities for trend following traders. Next, a personal anecdote regarding a pre-interview for a podcast, Maria Bartiromo, and the fundamental question: “Why will trend following continue to excel?” Finally, Covel moves onto a healthy bit of advice in risk management for your trading. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 351.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Mike Melissinos and Glenn Graham on today’s “emerging trend following trader” episode. In 2011, Melissinos started Melissinos Trading in his parents’ house in New Jersey. Covel and Melissinos discuss Melissinos’ career and beginnings; his history with Bear Sterns; Melissinos’ introduction to trend following; “find trends, align with trends, and manage risks”; the similarities between crude oil, copper, sugar, the Euro, and wheat; and trading based purely on price. For more information on Mike Melissinos, visit melissinostrading.com. Glenn Graham’s firm is Golden Point Capital. Graham has had extensive experience in quantitative trading strategy development in the futures space. He holds the designation of Chartered Alternative Investment Analyst (CAIA), a designation focusing on the alternative asset classes. Graham and Covel discuss Graham’s early trading track record; niche markets and hedging; Graham’s early trading experiences and his history at a high frequency trading firm; early influences in trend style trading; the parallels between trading and backgammon; the importance of the size of your winners over winning percentage; and style drift. For more information on Glenn Graham, visit goldenpointcap.com. For a free DVD: trendfollowing.com/win.

Direct download: 350.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Donald MacKenzie on today’s podcast. MacKenzie is a Professor of Sociology at the University of Edinburgh, Scotland. He works on the sociology of markets, focusing on automated trading, the use of mathematical models, and the evaluation and trading of bonds. MacKenzie has worked in the past on topics ranging from the sociology of nuclear weapons to the meaning of proof in the context of computer systems critical to safety or security. Covel and MacKenzie discuss economic models; self-fulfilling prophecies and economics; our beliefs and the social world; the definition of performativity; Mackenzie’s analysis and study of the Black-Scholes model; Long Term Capital Management; reflexivity; the intellectual gap between purveyors of the efficient market hypothesis vs. behavioral economists as reflected in the 2014 Nobel Prize winners; and the arms race in high frequency trading. Donald MacKenzie’s book mentioned is called An Engine, Not A Camera: How Financial Models Shape Markets. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 349.mp3
Category:general -- posted at: 10:13pm EST

Today on the podcast, Michael Covel opens up with a monologue and closes with an interview of him covering trend following 'fundamentals'. Covel opens up by discussing how the phrase “black box” is used to marginalize those who practice trend following trading. Next, Covel plays an interview clip from James Simons, the chairman of Renaissance Technologies, who generated for himself over 14B USD all through models. The second part of today’s episode are highlights of Andrew Horowitz’s interview with Covel--an interview *of* Covel this time. Covel and Horowitz discuss the TurtleTrader story; black boxes, emotions, and computers; what trend following is from the most basic level; the question of “why”, and why it might not be as important as many people think; finding which markets to enter; finding the optimal bet size; and how Fed intervention plays into the market. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 348.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Kathryn Kaminski on her second visit to the podcast. Kaminski is Director of Investment Strategies at Campbell and Co--the famed CTA started by Keith Campbell. Today, Kaminski outlines her new whitepaper, specifically diving into correlation among traders (CTAs). Covel and Kaminski discuss correlation between fund managers and strategies; the media’s misrepresentation of systematic strategies; diversification in the CTA and equity world; and why one trend following strategy is similar to just one stock. To view the paper see: www.campbell.com. Want a free trend following DVD, go to: www.trendfollowing.com/win.

Direct download: 347.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Gavin Serkin on today’s podcast. Serkin has been writing about developing economies for the better part of two decades as the Editor of Portfolio International magazine and more recently as the head of the emerging markets international desk at Bloomberg News in London. Serkin led Bloomberg’s coverage of the credit and derivatives markets from 2004 to 2008, winning the Society of American Business Editors & Writers’ Best in Business Award and the Society of Professional Journalists’ Deadline Club Award. Frontier, his new book, is a vivid travelogue of ten countries with the potential to lead economic growth in the coming decade. Covel and Serkin talk about safety issues in frontier lands; men and women in frontier countries; global brands and the direction we’re headed; going through Vietnam with Mark Mobius; Myanmar and violence; relations between the US, China, Vietnam, and Myanmar; Nigeria’s economy and where it’s headed. For more information on Gavin Serkin, visit frontierfunds.org. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 346.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Spyros Makridakis on the show today. Makridakis is the Rector of the Neapolis University of Pafos NUP and an Emeritus Professor of Decision Sciences at INSEAD as well as the University of Piraeus and one of the world's leading experts on forecasting, with many journal articles and books on the subject. He is famous as the organizer of the Makridakis Competitions, known in the forecasting literature as the M-Competitions. His calling is to poke holes in the notion that we can forecast with accuracy. Covel and Makridakis discuss known knowns, known unknowns, and unknown unknowns; the two main types of uncertainty--“subway” and “coconut”; Jim Collins, one of the best-selling business book authors of all time, and why it might not have any use to us; medicine and chance; the placebo effect; acceptance of an uncertain world; and the illusion of control. Whitepapers mentioned in episode: http://www.michaelcovel.com/2015/04/23/spyros-makridakis-interview-followup. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 345.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Martin Lueck on today’s podcast. Lueck holds an M.A. in Physics from Oxford University and currently is the Research Director and President of Aspect Capital. Lueck was originally with Adam, Harding and Lueck Limited (AHL), which he co-founded with Michael Adam and David Harding. At AHL, Martin initially focused on trading system research before taking on responsibility for the further development of the proprietary software language which provided the platform for all of AHL’s product engineering and implementation. Covel and Lueck discuss when he first saw quantitative, systematic styles in action; the beginnings of AHL; early coding experiences; early decisions that lead to a completely systematic strategy; diversification; what percentage of the educated financial audience grasps the strategies that are used at Aspect; behavioral economics; and bringing new potential opportunities into Aspect. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 344.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Ryan Holiday on his third visit to the podcast. Holiday is an American author, writer, and marketer. He is the media strategist behind authors Tucker Max and Robert Greene, the former Director of Marketing for American Apparel and an editor-at-large for the New York Observer. Today, Covel and Holiday discuss the process of writing a book. Whether or not you want to write a book yourself, the timeless topics Covel and Holiday cover apply not just to writing, but to life. Covel and Holiday discuss the idea of always being in a research mindset; why some people don’t take advantage of standing on the shoulders of the giants that came before them; to know where you’re going and to have a plan when it comes to writing; why it’s “all material”; the idea of listening to the same song over and over again; the “flow” state and its importance in writing; the importance of having a purpose in your writing; discipline and commitments; outsourcing and hiring experts for your writing project. For more information on Ryan Holiday, visit ryanholiday.net. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 343.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Victor Ricciardi on today’s episode of the podcast. Victor Ricciardi is an Assistant Professor of Financial Management at Goucher College. Professor Ricciardi is a leading expert on the academic literature and emerging research issues in behavioral finance. He is the editor of several eJournals distributed by the Social Science Research Network (SSRN), including behavioral finance, financial history, behavioral economics, and behavioral accounting. Ricciardi is also the co-editor of the book Investor Behavior: The Psychology of Financial Planning and Investing. Covel and Ricciardi discuss how Ricciardi found his way into behavioral finance; risk perception vs. risk tolerance; the affect and the anchoring heuristic; behavioral finance vs. behavioral economics; looking at behavioral finance in the context of specific strategies; behavioral economics in the context of asset bubbles and the popping of asset bubbles; why economic growth does not increase happiness; mindfulness as an assist in the notion of good decision-making; the notion of animal spirits; and the behavioral school vs. the classical school in academia. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 342.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Michael Dever on his third appearance to the podcast. Dever is an American businessman, futures trader, entrepreneur, and author. Dever is the founder and CEO of Brandywine Asset Management, Inc., an investment management firm founded in 1982, and the author of the best-selling investment book Jackass Investing: Don't Do It. Profit From It. Covel and Dever discuss Dever’s approach which uses multiple fundamentally based strategies in a systematic diversified portfolio that trades across more than one hundred global markets; strategy diversification; the word “predictable” from Dever’s perspective; lack of correlation to other strategies; what Dever means by a “not purely quantitative” strategy; how and why this particular suite of strategies came to exist; the five strategy types; crisis events and black swans; the weakness in the multiple strategy return driver set; the importance of speculators; the fixation on low volatility strategies; and true portfolio diversification. For more information on Michael Dever, visit Brandywine.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 341.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Tim Ferriss on today’s podcast. Tim Ferriss is an author, blogger and motivational speaker known for his bestselling books The 4-Hour Workweek, The 4-Hour Body and The 4-Hour Chef. To Covel Ferriss is otherwise known as the guy who has revolutionized the idea of writing a book; he has engineered the process of a bestseller. If you want to write a book, there is no one else better to learn from. Also a big influence on Covel: the idea of location independence. This is the idea that if you have your laptop and an internet connection, you can work from anywhere. Now, after all these bestselling books, Ferriss has a new TV show, The Tim Ferriss Experiment, all about the process of "learning". Covel and Ferriss discuss why the wrestler Dan Gable is part of Ferriss’ drive; the “grinding” aspect of wrestling, and how that has played into Ferriss’ career; the early lessons learned about making a TV show; the 80/20 rule; comparisons to the Turtle experiment; the idea of getting older, recovery, and athletics. Trailer: https://youtu.be/V4IuXZOIf7E. For more information on Tim Ferriss, visit fourhourworkweek.com/tv. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 340.mp3
Category:general -- posted at: 12:00am EST

Michael Covel speaks with Tim Price on his second appearance on the podcast. Price is the London-based Director of Investment at PFP Wealth Management. Price has over 20 years of experience in both private client and institutional investment management. Price regularly shares his views on his blog, The Price of Everything. What can we see in the central banks? What actinos have taken place in the last few years? Covel and Price discuss why the fundamentals are so 'shocking'; FDR and the Great Depression; why government taking its hands out of the equation can be the solution in a recession or depression; why savers suffer in silence; the three scenarios that occur when you accept that much debt simply cannot be paid back (growth, default, or inflation); the standoff between Germany and Greece, and how the average German might feel today about common currency; and the lack of outrage of zero interest rate policy. For more information on Tim Price, visit thepriceofeverything.typepad.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 339.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with K.D. Angle on today’s podcast. Angle began trading the futures markets in 1979 and developed his first rules-based trading strategy in 1984. In 1985 he created a newsletter called “The Timing Device” that specialized in making specific trade recommendations in the futures markets. After 1995, Angle retired the newsletter and went into asset management on a full time basis while investing the majority of his time and resources into researching and developing rules-based strategies. Covel and Angle discuss Angle’s father’s history, who turned a two million dollar gold investment into a hundred million in just six months, and the lessons learned; whether there was an early trend trading influence beyond looking at Angle’s father’s career; Angle’s experience with Dunn Capital; freedom of location; 100% rule-based and systematic trading vs. adding discretionary elements to your system; and why the client part of the business is so important. For more information on K.D. Angle, visit anglecm.com. Trend following DVD? Go: www.trendfollowing.com/win.

Direct download: 338.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel offers a double episode today. First, a recent speech of Covel’s all about trend following. Topics include track records; predictive vs. reactive strategies; quality of life in trading; how Covel got into the world of Trend Following; trading and coding; sophistication vs. automation; trend following performance in 2014; drawdowns in trend following; and trading as a game. Next, an interview with William Ury. William Ury, cofounder of Harvard’s Program on Negotiation, is one of the world’s best-known and most influential experts on negotiation. He has served as a mediator in conflicts ranging from boardroom battles to labor strikes, and from family feuds to civil wars. Covel and Ury’s subject today is negotiation. We’re all negotiating for something: money, love, sex, real estate. In his speech, Covel discusses reactive technical analysis; prediction; why trend following performance in 2014 was so excellent; and the reality of drawdowns. With William Ury, Covel discusses the negotiation with self; Ury’s history with high-stakes negotiations; some of the base human emotions that can be important in negotiations; getting to “yes” with yourself; how Ury became immersed in the world of negotiation; the importance of staying in the present moment. For more information on William Ury, visit williamury.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 337.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Colin Camerer on today’s podcast. Camerer is an American behavioral economist and a Robert Kirby Professor of Behavioral Finance and Economics at the California Institute of Technology (Caltech). Camerer's research is on the interface between cognitive psychology and economics. This work seeks a better understanding of the psychological and neurobiological basis of decision-making in order to determine the validity of models of human economic behavior. His research uses mostly economics experiments—and occasionally field studies—to understand how people behave when making decisions (e.g., risky gambles for money), in games, and in markets (e.g., speculative price bubbles). Covel and Camerer discuss why Camerer was called a child prodigy, and how he looks at that term in the context of nurture vs. nature; synthesizing behavioral economics and neuroscience; understanding Camerer’s studies when traders aren’t looking at the market on a day-to-day basis; how we can stimulate the brain to create a bubble; the ethical issues surrounding Camerer’s work; machine learning and data mining; neuroscience and game theory; comparing humans and chimps in the study of neuroscience; how trust correlates with economic growth; and how emotion functions in the modern world. Want a free trend following DVD? Go to trendfollowing.com/win.  

Direct download: 336.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Andreas Antonopoulos and Harry Yeh on today’s two-part Bitcoin episode. Andreas Antonopoulos is a technologist and serial entrepreneur who has become one of the most well-known and well-respected figures in Bitcoin. With Antonopoulos, Covel discusses acceptance of Bitcoin, and if the State could outlaw it; Third World and Second World acceptance of Bitcoin; the infrastructural needs for Bitcoin; Bitcoin fees and the cost of securing the network; currency issuance; why Bitcoin doesn’t rely on trust; why financial transactions are the most surveilled part of your life in America; the privacy aspect of Bitcoin; currency volatility and the difference between volatility and stability; and where you can get started with Bitcoin. Harry Yeh is Managing Partner at Binary Financial. Binary Financial LLC is an Investment management company focused on the crypto currency space, trading and facilitating large block trades for high net worth individuals and institutions. With Yeh, Covel discusses why Bitcoin is the most volatile alternative asset class, but why it still might be worth it to trade; how Bitcoin is a split between a commodity and a currency right now; being a speculator in Bitcoin and trading Bitcoin like futures contracts; Bitcoin adoption in China; why Bitcoin is tough as a store of value, but as great a trading opportunity; and finally, recommendations on Bitcoin wallets. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 335.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel opens up by discussing a piece about Benoit Mandelbrot and fractals. Covel notes the importance of taking a look at the complexity we see and taking a step back--an inspiration from Mandelbrot. Next, how are trend following returns produced? It’s important to be inspired by them, but it’s also important to understand other aspects of trend following like correlation. Today, Covel discusses the combination of a trend following investment (in this case Bernard Drury) and Warren Buffett into one portfolio. Covel discusses the two strategies and what happens specifically when you combine the two. Covel concludes by sharing a clip from David Harding regarding the importance of strategy. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 334.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Gary Dayton on today’s podcast. Dayton stands apart as a trading psychologist in his use of the Mindfulness-Acceptance-Commitment (MAC) approach to peak performance, a model of human behavior based on mindfulness. Dayton is a psychologist and holds a doctorate in clinical psychology and a certificate in human performance/sport psychology from Rutgers University. He is President of Peak Psychology, Inc., a consulting firm that specializes in developing “peak” performance in traders. Covel and Dayton discuss mindfulness, yoga, and a turnaround in a particularly depressed patient; defining mindfulness; how Dayton went from a clinical psychologist to integrating money, markets, trading, and investing into his work; the importance of a trading process; looking at the lessons and research of Daniel Kahneman; the endowment effect; price action as a heuristic; the importance of an exit strategy; why mindfulness is the most important skill  a trader can develop. Dayton’s book, Trade Mindfully, is available on Amazon. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 333.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Brian Proctor on today’s podcast. Proctor is an original TurtleTrader trained by Richard Dennis and Bill Eckhardt and today is a Managing Director at EMC Capital. He began his futures career in 1982, with experience at both the Chicago Mercantile Exchange and Chicago Board of Trade. Proctor was a participant in the renowned Turtle Program, and managed all trading operations at C&D Commodities through 2000. Covel and Proctor discuss Proctor’s first trading moments and the Turtle program; Proctor’s view on Liz Cheval, what she brought to his firm, and why she’s still an integral part of EMC today; how trend following strategies have continued to excel over the years; diversification and the Swiss franc; black swans and how the impossible can and does happen; and Bill Eckhardt’s influence. For more information on Brian Proctor, visit emccta.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 332.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Douglas Emlen on today’s podcast. Emlen is a professor at the University of Montana. He is the recipient of the Presidential Early Career Award in Science and Engineering from the Office of Science and Technology Policy at the White House. He has also earned multiple research awards from the National Science Foundation, including their five-year CAREER award. Covel and Emlen discuss taking our lessons from animals; the connection with human and animal arms races; international hacking; comparing the fiddler crap to US and USSR bombers during the cold war; defining evolutionary biology; how an arms race can run its course via the example of the sabertooth tiger; the arms race in the trading world; how the cuttlefish has found its way around the “alpha” system; finding “workarounds” when the deck is stacked against you; war games and detente; why predictability in weapons is important; one-on-one showdowns; and the importance of being nimble. Emlen’s book, Animal Weapons: The Evolution of Battle, is available on Amazon. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 331.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Nigol Koulajian on today’s podcast. Koulajian is the Founder and Chief Investment Officer of Quest Partners LLC. He has been designing and trading short-term and long-term technical systems for over 22 years. Covel starts the episode with some comments on Ray Dalio's recent comments drawing a parallel to 1937. Then Koulajian and Covel talk all things trend following in the CTA space. Covel and Koulajian discuss trend following performance in 2014; volatility vs. skew; why having a good Sharpe Ratio is not the be-all-end-all; the notion that alpha in the CTA world is not a result of skill; correlation between tail risk and the Sharpe Ratio; central bank action and the Swiss Franc; why trend following may not be as good in equity market corrections now as it has been in the past; why trend following is not about the super-complicated mathematics; getting outsiders to understand drawdowns; emotional intelligence vs. intellectual intelligence; media bias against trend following. For more information on Nigol Koulajian, visit questpartnersllc.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 330.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Terrance Odean on today’s podcast. Odean is the Rudd Family Foundation Professor and Chair of the Finance Group at the Haas School of Business, University of California, Berkeley. Odean has extensively researched into the empirical data on active trading. He is very well-known for his work in behavioral finance and is once of the early pioneers. Covel and Odean discuss how Odean describes his work; how Odean started his work looking at individual broker statements; the disposition effect; how Odean was able to get individual investor data when he was starting out; looking at early thinkers in the arena of behavioral finance; why people buy low and sell high; why statistics are one of the best ways to understand what’s going on in the market; the difference between male and female investors; why overconfidence hurts investors; attention and how we make decisions; why a simple heuristic from Seinfeld could be the best way for most investors. For more information on Terrance Odean, visit odean.org. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 329.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Robert Seawright on today’s podcast. Seawright is the Chief Investment & Information Officer for Madison Avenue Securities, a boutique broker-dealer and investment advisory firm headquartered in San Diego, California. Seawright is also a columnist for Research magazine, a Contributing Editor at Portfolioist as well as a contributor to the Financial Times, The Big Picture, The Wall Street Journal’s MarketWatch, Pragmatic Capitalism, and ThinkAdvisor. Covel opens up by talking about “A New Kind Of Investment Outlook”, a blog post by Seawright. Covel explains that this episode is all about the right type of thinking when it comes to proper investing. Covel and Seawright discuss topics such as how Seawright was able to put together this blog piece; perfection and prediction; bias blindness; volatility vs. risk; separating your politics from your investing; financial media as entertainment; whether Seawright encountered any pushback after putting out his article; letting go of the high leverage idea; why the more we trade, the worse we do; Nobel laureate David Baltimore; and adversarial collaboration. For more information on Bob Seawright visit rpseawright.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 328.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Susan Polgar and Douglas Goldstein, co-authors of Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing. Susan Polgar, American chess grandmaster, and Douglas Goldstein, Certified Financial Planner, had the unique idea of looking at chess and applying the wisdom to investing. You don’t need to be a chess player to get insights from Polgar and Goldstein. Covel and Polgar discuss Polgar’s early history as a four-year-old chess playing prodigy, and the trouble some older males had in accepting her; nurture vs. nature; the connection between the Turtle story and chess; the skills that chess provides outside of just playing the game; the importance of keeping your emotions in check; process vs. outcome; and thinking through the possibilities from a chess perspective. With Douglas Goldstein, Covel discusses how the idea came about to combine finance with chess in a book; tactics vs. strategy; and pattern recognition. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 327.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Kabir Sehgal on today’s episode of Trend Following Radio. Sehgal is a New York Times bestselling author and Grammy Award-winning producer. He is currently a vice president at JPMorgan Chase. Sehgal’s new book, Coined: The Rich Life of Money and How Its History Has Shaped Us, caught Covel’s eye. This is a subject layered in complexity and depth. Just about everything that goes on in our lives is decided by money and Sehgal digs into its story on a micro level. Covel and Sehgal discuss Sehgal’s history; Sehgal’s experience winning a Grammy for production and the idea of “no boxes”; why Sehgal sees his life like a jazz composition; defining money as a symbol of value; the neurological effects and artistic aspects of money; the currency of the natural world; whether Sehgal sees “money as the root of all evil”; the idea of charity; the politics of money; the internationalization of currency; hyperinflation; gold, and Sehgal’s experience going to the basement of the New York Fed; digital money and bitcoin. Coined: The Rich Life of Money and How Its History Has Shaped Us is available now. For more information on Sehgal visit coinedbook.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 326.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel starts today’s podcast by talking about “robot traders” and major misconceptions. Covel discusses machine learning v. automation and moves into a series of clips that outline trend following philosophy. First, Covel plays a clip from Benoit Mandelbrot to illustrate problems with the Efficient Market Hypothesis. Next, Covel plays two clips from Jim Simons, CEO of Renaissance Technologies, about his experiences as a new trader and on 'luck' (Simons is not a fan of fundamental trading). Building on Jim Simons comes a clip from David Harding of Winton Capital, a multi-billion dollar fund with trend following models at the core. Harding talks about his start, models, math, probabilities, and betting. Next, Covel plays a clip from Salem Abraham. Abraham talks about the markets he trades, and why it doesn’t really make a difference where the money comes from. Covel adds clips from Jean-Philippe Bouchaud, the Co-Founder, Chairman & Chief Scientist of CFM. Covel also plays clips from Svante Bergstrom, Ewan Kirk and trend trading legends William Eckhardt and Ed Seykota. These all tie together to attempt to give a trend trading/quant philosophical stance--the attitude and benefits. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 325.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with David Stockman on today’s podcast. Those that follow business and politics in the United States will recognize his name. Stockman has been a businessman, a Congressman, and Director of the Office of Management and Budget under President Ronald Reagan. Two things caught Covel’s attention: Stockman’s book, The Great Deformation: The Corruption of Capitalism in America, and his comments about President Woodrow Wilson. Covel explains. Covel and Stockman discuss his Woodrow Wilson piece; how Wilson brought the US into World War I and how the pain of the 1930’s and the pivot point of the 20th century was connected; why the ATM’s going dark in 2008 wasn’t a true possibility; zero interest rate policy and how we’re forcing people to spend down principal; and how the Fed can generate massive bubbles. David Stockman’s Contra Corner can be found at davidstockmanscontracorner.com. The Great Deformation is available on Amazon.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 324.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Jerry Parker on today’s episode of the podcast. This is Parker’s fourth interview with Michael Covel. 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 a series of tweets written by Parker and use them as a jumping-off point for conversation. Topics include price action, “normal” market behavior; recent moves in the Swiss Franc; paying attention to entries as well as exits; why investors are often their own worst enemy; the first moment that Parker heard about price-based trading; becoming obsessed with asymmetrical risk and reward; why looking at trend following losses is important; why you can tell a system is robust if it has big drawdowns; and backtesting and treating all trades with equal weight. More: www.chesapeakecapital.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 323.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Sophia Roosth on today’s podcast. Roosth is a Harvard professor that Covel first heard quoted on DNA privacy from Davos. Roosth’s research focuses on the twentieth and twenty-first century life sciences. Her first book, based on four years of ethnographic fieldwork, examines how the life sciences are changing at a moment when researchers build new biological systems in order to investigate how biology works. In this work, Roosth asks what happens to “life” as a conceptual category when experimentation and fabrication converge. Covel and Roosth discuss the Davos event; what becomes of privacy in a moment of internet surveillance; having more information out there as a way to control privacy; biological privacy, and whether our DNA is going down a path where it’s a lot more public; discrimination based on genome; genetic McCarthyism; somatic transfer and cloning; the story of Chance the bull; the idea of de-extinction; the ethics of cloning; molecular gastronomy and world hunger. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 322.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Dr. Michael Lardon on today’s podcast. Lardon is one of the premier mental performance coaches in the world, with clients in more than a dozen professional and Olympic sports. His athletes have won major golf championships, Olympic gold medals, Super Bowls and World Series titles, among other achievements. He is an Associate Clinical Professor of Medicine at the University of California San Diego and a Consulting Psychiatrist to the United States Olympic Teams at the Olympic Training Center in Chula Vista, CA. However, Lardon and Covel's conversation is applicable to everyone, not just certain athletes. They talk about Lardon’s early experiences playing professional table tennis; the “slowing down of time” and how it affects performance; the importance of mental performance in sports; Phil Mickelson’s loss at the 2013 Open and his win at the British Open a month later, and how Lardon was assisting him during this period; “the yips”, and what is going on in the mind when someone can no longer perform a simple activity they used to accomplish easily; neurological vs. psychological “yips”; Lardon’s opinion on what’s happening with Tiger Woods currently; narrow, intense focus vs. dropping the intense expenditure of energy when you don’t need it (ie. what do you do with your downtime?); the process of desensitization; the deliberate plan for improvement and the importance of writing things down. For more information on Dr. Michael Lardon, visit drlardon.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 321.mp3
Category:general -- posted at: 10:00pm EST

Interview with Michael Covel on Trend Following Radio.

Direct download: 320.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Salem Abraham on today’s podcast. Abraham is the President of Abraham Trading Company with a 27-year track record (with much trend following success). Over the years, Abraham has been kind enough to offer Covel fantastic insights. Abraham also appeared in Covel’s film, Broke, and is the last chapter of The Complete TurtleTrader. Today, Covel and Abraham cover some topical market moves--the Swiss Franc and Crude Oil among them. Covel and Abraham also discuss living in Asia and Asian economics; a market lesson Abraham first learned in 1987; the recent action of the Swiss Franc; artificially priced markets and the analogy of a dam; Crude Oil as a trend; speculation at the core of Abraham’s business and its effect on markets generally; the effect of Abraham’s grandfather on his work; the influences on Abraham’s thinking and business decisions; location independence; the importance of a link to the outside world; avoiding disaster; and being agnostic to the market. More: www.abrahamtrading.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 319.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Christopher Chabris on today’s podcast. Chabris is an American research psychologist, currently Associate Professor of Psychology and co-director of the Neuroscience Program at Union College in Schenectady, New York, Adjunct Assistant Professor of Neurology at Albany Medical College and a Research Affiliate at the MIT Center for Collective Intelligence. He is best known as the co-author (with Daniel Simons) of the popular science book The Invisible Gorilla, which presents the results of research into attention and other cognitive illusions. Chabris offers a wide take on what’s going on in our minds. Covel and Chabris discuss witnesses, memory, and the legal system; expert witness testimony; “the play that changed poker”; mastery in any field; the connection between chess and memory; Chabris’ interaction with Neil deGrasse Tyson, and how memory affects our outlook; the stock market, prediction, and forecasting; the importance of confidence with regard to predictions; simple rules vs. complex rules; Oprah Winfrey, Malcolm Gladwell, and intuition; and memory and the influx of information coming at us. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 318.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Peter Shankman on today’s episode. Shankman is the classic entrepreneur: he is the author of Nice Companies Finish First and the founder of Help a Reporter Out (HARO), the largest free source repository for journalists in the world. His new book, Zombie Loyalists: Using Great Service to Create Rabid Fans is out now. First, Covel offers up a monologue. Topics include the end of geography and the importance of globalization; gadgets, software, hacks, and websites as the magic elixir; the importance of dedication, commitment, and alone time; exercise; being able to walk away when negotiating; getting off the sidelines; happiness as a choice; and the necessity of having a niche. Covel and Shankman discuss skydiving and the lessons of preparation and mitigating risk; social media compared to the dotcom bubble; and the importance of creating a good product and customer service despite advances in technology. Ending? Covel summons Alan Watts for good measure. For more information on Peter Shankman, visit shankman.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 317.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel interviews Gary Antonacci on today’s podcast. Antonacci focuses on two issues in the quant world: relative strength price momentum with trend following absolute momentum. He’s developed a strategy where he believes it’s best to combine both. His new book is called Dual Momentum Investing. Today, Antonacci makes the case for this strategy. Covel and Antonacci discuss momentum vs. trend; relative strength momentum, cross sectional momentum, absolute momentum, and time series momentum; trend following vs. managed futures as terms; Antonacci’s early history and how he found his way into the career he has today; three legendary traders that crossed paths with Antonacci early on; the efficient market hypothesis as a less-than-solid foundation; buying higher highs; Ray Dalio and risk parity strategies; academic perspectives on momentum; the interaction and correlation between the two momentum strategies (relative and absolute). For more information on Gary Antonacci, visit optimalmomentum.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 316.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Michael Mauboussin today on his second visit to the podcast. Mauboussin is an author ("More Than You Know", "Think Twice: Harnessing the Power of Counterintuition"), investment strategist in the financial services industry, professor at the Columbia Graduate School of Business, and serves on the board of trustees at the Sante Fe Institute (an independent, nonprofit theoretical research institute). He is managing director and head of Global Financial Strategies at Credit Suisse, where he advises clients on valuation and portfolio positioning, capital markets theory, competitive strategy analysis, and decision making. Covel and Mauboussin discuss multi-disciplinary thinking and its influence on Covel; looking at larger reference classes; the Swiss Franc; Mauboussin’s personal take on the recent oil move; fundamentals and expectation; luck or skill when it comes to trading profits; the paradox of skill, absolute, and relative skill; whether scientific principles of luck exist; defining luck; outcome bias; and the general public perception of behavioral economics. For more information on Michael Mauboussin, visit michaelmauboussin.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 315.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Peter Larson. First, Michael Covel discusses some feedback he’s received from author Jack Schwager about the podcast. Specifically, Schwager brought up the episode from paleontologist Jack Horner. Covel brings another dinosaur hunter to the podcast today: Peter Larson. Larson is an American paleontologist, fossil collector, and president of the Black Hills Institute of Geological Research, a company that excavates, prepares, and sells fossils. He led the team that excavated "Sue", the largest and most complete specimen of Tyrannosaurus rex found to date, and has published numerous scientific and popular works on dinosaur paleontology. A movie based on “Sue”, Dinosaur 13, has been produced as well. You might ask, what’s the connection to Michael Covel? Covel explains that Larson’s story involves government intervention, a massive legal case, and ownership issues in addition to Covel’s personal connection to Larson. Covel and Larson talk about luck’s role in finding dinosaurs; Larson’s personal anecdotes about finding “Sue”; whether Larson knew at the time that he was finding a piece of “land” in a legal sense; the scientific data that Larson was able to glean before the government took the bones; telling a male dinosaur from a female dinosaur; what makes Larson a T-Rex entrepreneur; T-Rex as a predator or scavenger; and the legal case surrounding “Sue”. For more information on Peter Larson, visit BHIGR.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 314.mp3
Category:general -- posted at: 10:00pm EST

Jean-Philippe Bouchaud speaks with Michael Covel on his second visit to the podcast. He is founder and Chairman of Capital Fund Management (CFM) and professor of physics at École polytechnique. Today, Covel and Bouchaud focus on Bouchaud’s co-authored paper, “Tail Risk Premia vs. Pure Alpha”. Additionally, Covel and Bouchaud discuss his firm’s performance for 2014; whether trend following actually “died” prior to it’s “reappearance” in 2014; what trend following manages to exploit; exploiting vs. exploring; looking at volatility as a precursor to profit; volatility as a measure of risk; trend following as a genuine market anomaly; the behavioral biases in play as oil has fallen fifty percent plus; the feedback Bouchaud has received from peers on his newest paper; whether other strategies exploit a genuine market anomaly; Bouchaud’s philosophy on transparency and "secrets" in his work; and why Bouchaud’s work culture is not a culture of MBA’s. Note: In this episode a white paper is mentioned. There are short (www.trendfollowing.com/cfm-short.pdf) and long (www.trendfollowing.com/cfm-long.pdf) versions. Receive a free trend following DVD: www.trendfollowing.com/win.

Direct download: 313.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Dan Hill on today’s podcast. Hill is a recognized authority on the role of emotions in consumer and employee behavior. He runs Sensory Logic, a scientific insights firm that analyzes consumers’ facial expressions to help companies better navigate consumers’ emotional decision-making processes. Before the interview, Covel discusses the Swiss Franc, David Harding, and trend following trading in his introduction. Next, Covel and Hill discuss what a face coding expert is; the evolutionary aspect to face coding and the 43 muscles present in the face; emotional decision-making; how Hill found his way personally into this field; why we feel before we think; being hired by the Milwaukee Bucks; the importance of a smile in the heart of a champion; the difference between technical skill and the factors that Hill is looking for; the importance of having the right amount of happiness; some of the limitations of facial coding; how technology is intertwined with facial coding; why a personality like Richard Nixon may never be President again; the say/feel gap; whether we can learn how to avoid negative facial expressions and emotions; a trading system based on the movement of human faces; and where we might see facial coding moving to in the future. For more information on Dan Hill, visit sensorylogic.com. Want a free trend following DVD? Go to trendfollowing.com/win. 

Direct download: 312.mp3
Category:general -- posted at: 10:00pm EST

Michael Covel speaks with Mebane Faber. Faber is a a noted author (The Ivy Portfolio), blogger, and portfolio manager with Cambria Investment Management. Faber is involved in many different areas of the market, extremely practical and pragmatic. This is Mebane Faber’s third visit to the podcast and he and Covel discuss the podcast medium; trend following, buy & hold, and emotions; anti-fragility; Ray Dalio, risk parity, and his strategies All Weather and Pure Alpha; asset allocation as a buy and hold investor; Faber’s five ETF’s, and his factors for starting one; deflation, inflation, Japan, why traders run out of the store when things are on sale; value investing; and what if governments didn’t meddle with markets. For more information on Mebane Faber, visit mebfaber.com, cambriafunds.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Direct download: 311.mp3
Category:general -- posted at: 10:36pm EST