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.
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.
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.
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.
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.
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.
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.
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.
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.