Info

Trend Following with Michael Covel

Bestselling author Michael Covel is the host of Trend Following Radio with 4 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 450+ episodes only at www.trendfollowingradio.com/rss.
RSS Feed Subscribe in iTunes
2017
January


2016
December
November
October
September
August
July
June
May
April
March
February
January


2015
December
November
October
September
August
July
June
May
April
March
February
January


2014
December
November
October
September
August
July
June
May
April
March
February
January


2013
December
November
October
September
August
July
June
May
April
March
February
January


2012
December
November
October
September
August
July
June
May
April
March
February
January


Categories

All Episodes
Archives
Categories
Now displaying: Page 1

Bestselling author Michael Covel is the host of Trend Following Radio with 4 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 450+ episodes only at www.trendfollowingradio.com/rss.

Jan 16, 2017

Michael starts the podcast quoting from a recent blog post of Seth Godin’s called “The Candy Diet.” Most people want a Guru or someone to spoon feed them something, anything. They want to be told what will happen in the future. They are on the “candy diet” that Seth Godin speaks to. People want to be baited with quick and easy. Michael reads from the obituary of the late Jay Forrester next. Forrester made the point in one of his classes that not a single one of his engineering students had ever taken the back of the toilet seat off to see how it worked. Looping back to Godin’s candy diet piece: There isn’t enough curiosity out there.

Michael quotes Jameis Winston, quarterback for the Buccaneers next. Jameis was asked if the Buccaneers were playoff contenders. Jameis’ response was that he was just trying to be 1-0 each week. He was living in the “moment of now.” He wasn’t worrying about week five while he was playing a game in week one. This thought process goes for everything in life, especially trading. You need a systematic approach that keeps you in the moment of right now. Otherwise you become bait.

Jared Kushner ran the Trump campaign. He tried to run the Trump campaign on the cheap. He would see what worked, and if it didn’t work then they would cut their losses quickly. If it worked, they would keep that strategy going and scale it up.

Michael finishes up the podcast talking about the new version of his Trend Following book. He points out some edits the publisher wanted him to make to move toward a more politically correct book. Michael brings in a term coined by Nassim Taleb, “intellectual yet idiot,” to explain his stance on making his book more politically correct.

In this episode of Trend Following Radio:

  • Political correctness
  • Curiosity
  • Living in the moment of now
Jan 13, 2017

Michael releases another mega episode with three trend following traders: Chris Cruden, Salem Abraham and Brian Proctor.

Chris Cruden has been in the trend following space for over 25 years. In 1988 he became a Director of Adam, Harding and Lueck Asset Management Ltd (AHL) in London, a famed trend following shop. He is currently the head of Insch Capital Management.

Salem 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.

Brian 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.

In this episode of Trend Following Radio:

  • Price action
  • Trading only currency
  • Benchmark and time period selection
  • Don’t force the system
  • If you can’t measure it, you can’t manage it
  • Markets teach humility
  • Swiss Franc and Crude Oil
  • Asian economics
  • Location independence
  • The Turtle program
  • Diversification
  • Black Swans
Jan 9, 2017

Michael interviews Evan Carmichael, author of Your One Word: The Powerful Secret to Creating a Business and Life That Matter: "In this bold and empowering guide, entrepreneur and social media sensation Evan Carmichael shares the secret to turbo-charging your path to success on your own terms. With thought-provoking questions and inspiring, instructive examples, Your One Word will help you nail down your personal mottos – the word that captures your purpose and passion. With this operating philosophy in hand, you will then learn how to leverage this powerful tool to create the business and future of your dreams."

The real story? Two guys talking about the psychology behind successful entrepreneurship.

In this episode of Trend Following Radio:

  • Entrepreneurship
  • Your one word
Jan 6, 2017

One of Michael’s favorite things to do is intellectually kick people in the ass. People have stopped thinking. We have social media overload and virtual reality is taking over reality.

Michael brings a clip from Daniel Dennett on the podcast. Daniel specializes in providing people with different tools for thinking. Thinking is not genetic, it is learned. “Do tools evolve and make us smarter? Or do we evolve to become smart enough to make tools?” The answer is: Yes. It goes both ways. Daniel uses a chimpanzee example to explain the difference between our minds and the minds of any other animal.

In this episode of Trend Following Radio:

  • Flynn effect
  • Surely alarm
  • Genetic evolution
  • Shaping neurons in the brain
  • Intrinsic value
Jan 2, 2017

Michael and Wesley Gray cover wide territory today across the subject of momentum in the markets. Wesley Gray served as a Captain in the United States Marine Corps and taught as a finance professor at Drexel University. He earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania. Wesley is founder of Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. He has published four books including: “Quantitative Value,” “DIY Financial Advisor,” “Embedded” and his newest book “Quantitative Momentum.” He is a contributor to the Wall Street Journal, Forbes, and the CFA Institute.

In this episode of Trend Following Radio:

  • Efficient Market Hypothesis
  • Cross-sectional momentum
  • Time-series momentum
  • Trend following
  • Behavior
  • Career risk
Dec 30, 2016

Episode 515 is another “Mega episode.” It is a culmination of interviews comprised of four of the most successful trend following traders alive today: Ewan Kirk, Jean-Philippe Bouchaud, Martin Lueck and Christopher Cruden.

Ewan Kirk is the head of Cantab Capital and has brought his firm from $30M AUM in 2006 to over $5B today. Kirk employs several strategies but clearly uses a trend following foundation.

Jean-Philippe Bouchaud is founder and Chairman of Capital Fund Management (CFM) and professor of physics at École polytechnique.

Martin 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.

Christopher Cruden has been in the trend following space for over 25 years. In 1988 he became a Director of Adam, Harding and Lueck Asset Management Ltd (AHL). He is currently the head of Insch Capital Management.

In this episode of Trend Following Radio:

  • Importance of consistent marginal improvements
  • Understanding a client’s drivers
  • Benefits the economy, society, and the world
  • Randomness is everything
  • Discretionary traders
  • Losses are statistically inevitable
  • Holy grails in trading
  • Behavioral biases
  • Volatility as measuring risk
  • Exploiting vs. Exploring
  • Tail risk premia vs. Pure alpha
  • Behavioral economics
  • Systematic trading
  • Price action
  • Benchmark selection
  • Time period selection
  • Markets teach humility
        Time management
Dec 26, 2016

Michael has put together a compilation of past appearances aggregated into a four hour episode. Guests today include: Daniel Kahneman, Laurie Santos, Steven Kotler, Anders Ericsson, Philip Tetlock, and Colin Camerer.

Daniel Kahneman has been called the most important psychologist alive today. He is the 2002 winner of the Nobel Memorial Prize in Economic Sciences, and is the guy behind the theories of behavioral economics and behavioral finance.

Laurie Santos is a professor of psychology and cognitive sciences at Yale University. Her research explores the evolutionary origins of the human mind by comparing the cognitive abilities of human and non-human primates. Santos is able to look at monkeys and their behavior in markets and money, and see the similarities with humans.

Kotler is an American bestselling author, journalist, and entrepreneur. His articles have appeared in over 70 publications, including The New York Times Magazine, LA Times, etc.

Anders Ericsson is a Swedish psychologist and Conradi Eminent Scholar and Professor of Psychology at Florida State University. He is internationally recognized as a researcher in the psychological nature of expertise and human performance. His new book is “Peak: Secrets from the New Science of Expertise.”

Philip Tetlock is a Canadian American political science writer currently at The Wharton School of the University of Pennsylvania. He is right at the intersection of psychology, political science and organizational behavior. His book, “Superforecasting: The Art and Science of Prediction,” is about probabilistic thinking defined.

Colin 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 the interface between cognitive psychology and economics.

In this episode of Trend Following Radio:

  • Remembering self vs. Experiencing self
  • How the measures of happiness are being implemented into public policy
  • How failure to accept one’s losses can lead to risk-taking in trading
  • Crowd behavior relating economic bubbles
  • Why capitalism is largely driven by optimism
  • Behavioral economics affecting the trading world
  • Monkeys and humans
  • The monkey economy
  • The endowment effect
  • G.I. Joe fallacy
  • Discipline and practice
  • Solo and group practice
  • Flow state
  • Social motivation
  • The late birthday rule
  • 10,000 hours of practice
  • Nature vs. nurture
  • Brain plasticity
  • What are superforecasters?
  • Probabilistic thinking
  • Looking at data
  • The basis of decision making
Dec 23, 2016

Phil Donahue and Ayn Rand are on the podcast today, but one of them is of course dead. Rand is best known for her two best selling novels, “The Fountainhead” and “Atlas Shrugged.” Michael plays two clips of Donahue interviewing Rand. Rand is controversial, but her thinking is accurate and clear. She breaks down altruism, government regulation, free market, monopoly, God, feminism, terrorism, and many more topics. You may not agree with her on all points, but there is inspiration to be taken away from her passion and to-the-point thinking.

In this episode of Trend Following Radio:

  • Altruism
  • Government regulation
  • Acting on faith
  • Living by emotion, not reason
  • Women’s rights
  • Religion
  • Monopoly
  • Spending money on the un-gifted minds rather than the gifted
  • A “me” society
  • Definition of a dictator
Dec 19, 2016

Tim Price has worked in capital markets for over 25 years across three management firms. His book is “Investing Through the Looking Glass.”

Tim thought Brexit would be the biggest thing in politics during his lifetime, until Trump. People love a narrative and those behind Brexit and Trump produced a great one. People were so fed up with the establishment that even though they may not have agreed with the idea of Brexit or the agenda of Trump, they wanted a vote against the establishment.

“What was the driving force behind wanting to write your first book?” The seminal event for him was the collapse of Lehman Brothers, which led him to think: “How on earth did we end up in this mess?” Interest rates are still at zero eight years post crisis and central banks are still printing money out of nowhere. He has spent the years since 2008 researching what the causes were and essentially the “Who done it” in the bailouts. Michael and Tim talk about the economy and the avalanche that is building on the horizon. Michael asks, “How did we get to the point where so many of us have just accepted that there are these show figures making decisions for us that we have no choice in?”

In Tim’s work he takes people on a detailed journey through the banking system, bailouts, bond market, stock market and the solutions. “What other options in trading exist after you have value, momentum and gold?” Michael and Tim discuss why there aren’t really any other options beyond those.

In this episode of Trend Following Radio:

  • Trusting central planners
  • Going against the establishment
  • Banking system
  • Owning gold
  • Lehman Brothers collapse
  • 2008 bubble
  • The Brexit and Trump narrative
Dec 16, 2016

Building off of last weeks podcast Michael brings another dead guest on his show, Alan Watts. Watts is responsible for introducing eastern traditions to the West, i.e. Buddhism. He has been featured many times on the podcast. Is money the root of all evil? Is money the goal? Why are making mistakes so crucial to your life? Does money equal wealth? These are all topics that are discussed and answered on the podcast.

Before Michael plays a clip from Watts, he shares a story from his recent trip to California. Michael had lunch next to a table that was the quintessential example of money, wealth, and the stereotypes that live in Los Angeles. His opening story is food for thought as you listen to Watts and his wisdom.

In this episode of Trend Following Radio:

  • Liberty
  • Relationship between guilt and gold
  • You don’t learn if you don’t make mistakes
  • Psychological attitude toward money
  • Money is just bookkeeping
  • National debt
  • Money as the circulation of information
  • Changing the psychological attitude toward money
  • The cost of paying income tax
  • Psychologically poor
Dec 12, 2016

Milton Friedman is one of Michael’s favorite dead guests to bring on the podcast. He takes complicated subjects and breaks them down clearly. Today, Michael curates two interviews between Phil Donahue and Milton Friedman. These interviews were recorded back in the 1980’s, but many of the points made are more relevant today than ever. Milton foreshadows Uber, talks about the deep state (without mentioning the deep state), brings up airline service and monopoly. His solutions to problems in government 35 years ago were to cut government spending, hold monetary growth back and cut regulations. The same solutions to government are at the forefront of American politics today.

In this episode of Trend Following Radio:

  • Government spending
  • Liberty in trading
  • Government regulation
  • Unknowingly supporting private interests
  • How to prevent monopoly
  • Legalizing drugs
  • Prohibition
Dec 9, 2016

Van Tharp is on today’s podcast. It is his third appearance on the show. Van runs the Van Tharp Institute and is the author of four acclaimed books published by McGraw Hill: Super Trader, Trade Your Way to Financial Freedom, Safe Strategies for Financial Freedom, and Financial Freedom Through Electronic Day Trading. His new book is called Trading Beyond the Matrix. He was also featured in Jack Schwager’s Market Wizard’s: Interviews with Great Traders. Van Tharp received his Ph.D. in psychology, is a certified Master Practitioner of Neuro Linguistic Programming (NLP), a Certified Master Time Line Therapist, a certified Modeler of NLP, and an Assistant Trainer of NLP.

Michael starts the podcast asking Van how he felt the year Eugene Fama and Robert Shiller won the Nobel Prize. Van has a long standing theory that those who win the Nobel Prize are just supporting the ideas of the status quo. It is meant to propel the majority into believing they are in the right. Trend following does nothing to support the status quo, therefore Van says that Michael and himself will not be winning the Nobel Prize anytime soon.

People looking for help constantly approach Van. Michael asks, “What is it like to observe the learning of people who come into your world?” Van goes into the steps he takes new students through when teaching them how to trade. He shares some typical biases that new traders have when starting their training. He first teaches people to understand that they need to take total responsibility for what happens to them while trading. If was easy to make money in the markets then big money would make it hard to participate in the game, but since it is not easy to make money in the markets, they make it easy to join.

Michael switches gears and asks, “When were you first exposed to the ‘how much’ question?” Van says that it was at a workshop with Ed Seykota. Seykota asked, “What is the most important factor in your trading?” Van responded, “Well, It’s you.” And Seykota said, “No, it’s how much.” It all starts with how much you are willing to lose and how much you can afford to lose. Michael moves on to ask “Are there anymore interesting things that you learned from working with Ed Seykota?” Van shares a story about Seykota and the psychology behind what makes him such a legendary trader. He moves on to share some stories about another legendary trend following trader, Tom Basso. Van shares personal stories about how he conducted his business and trading.

Discretionary trading is the next topic. Van says, “If you are a pure discretionary trader, it seems to me that it would be very difficult to implement some of the position sizing methodologies that are in your work.” A trader needs to know when something is not working anymore. You need to be aware of market changes, and subtle changes in that market that no longer works.

Michael ends the podcast asking, “Who changed your thinking in your life? Who helped to send you down this path?” Van started his business around 1982, which coincidentally was probably the low point in his life. He went to a life science church that helped him work on himself. He can’t pinpoint a specific event or person that has molded him into who he is right now, it was a collaboration of events and people.

In this episode of Trend Following Radio:

  • Systems theory
  • Money management vs. Position sizing
  • Ed Seykota’s trading and psychology strategies
  • Tom Basso’s trading and psychology strategies
  • Yoga
  • Training your brain how to think
Dec 5, 2016

“If you are in a dead end existence and feel like you need something else, get on a plane.” Fly to a foreign country, go alone, and do not have a plan. The influx of adrenaline from getting away and exploring can break anyone out of their day to day hypnosis.

Michael plays a series of news clips starting from the beginning of the Presidential race. The various clips start off profiling Donald Trump’s campaign as a joke, and then slowly morphing into him inching his way up in the polls and taking the Presidency. Michael then reads an excerpt from “Follow Me and Die” by Cecil Curry.

Michael ends the podcast with a quote from a recent Financial Times article featuring David Harding. The excerpt explains how Harding exploits the failures in the efficient market theory. He says that the markets are a psychological game and should not based off of fundamentals. Bet your money on the price, not what is happening in politics.

In this episode of Trend Following Radio:

  • Trump as President-elect
  • Trading off of price, not politics
  • Nazi’s in America
  • David Harding
  • Efficient market theory
Dec 2, 2016

Olympic gold medalist Lanny Bassham is on today’s podcast. After falling short in the 1972 Olympics winning the silver medal rather than gold, Lanny went home and re-applied himself. He returned to the 1976 Olympics and won the gold medal in rifle shooting.

Lanny was the kid in school that nobody wanted on their team. He was slow, short and uncoordinated. He worked hard, but he was never going to be able to compete against others that were taller, faster and more coordinated. He shares a story about being in school and one of his classmates saying that he would be the least likely person to become an Olympic gold medalist. This prompted him to go home and learn all he could about the Olympics. This began his journey in finding his place in Olympic history.

Lanny moves on to share how much practice and work he had to put in to become an elite performer. He never felt like practice was something he had to do, it was something he got to do. He loved rifle shooting not just because of the action of it, but because he was good at it. He took obstacles and turned them into opportunities.

Next, Lanny says there is a big difference between winning silver and winning gold. When you go back home and everyone asks how you did, they always ask who won the gold, not who won the silver. Lanny relates winning silver saying, “It is like going to the super bowl and losing.” Doesn’t matter that you made it there if you don’t win. He quickly realized the reason he won silver wasn’t because of his shooting capabilities, it was his mental game. He teaches people how to have a mental process and tap into it when they need it the most.

Lanny breaks performance down as a function of three mental processes: the conscious mind, subconscious, and self image. He goes into depth explaining the balance between all of these psychological functions. He says that you need to focus on your process rather than outcome. When you are 100% in control, then you will be much more mentally consistent. Outcome will always follow process. Lanny finishes up the podcast asking the question, “Do you really want it to be easy?”

In this episode of Trend Following Radio:

  • Creating a mental process
  • Changing your self image
  • How the top 5% think
  • Hard work in practice vs. Hard work in tournaments
  • Thinking of process not outcome
  • Valuing performance not just participation
Nov 28, 2016

Michael brings football into the podcast today. He starts off playing a press conference clip with Tony Romo and his response to being injured and falling from his spot as the starting quarterback.

Michael moves on to Donald Trump and what government should be. There are pro’s and con’s to Trump becoming President, but the bottom line is that people voted against the current political system. 50% of Americans decided to roll the dice and see what happens.

Big picture: Your trading strategy must not be based on who the President might be. Just follow the trend.

In this episode of Trend Following Radio:

  • Meritocracy
  • Donald Trump as President
  • Trading off the trend, not fundamentals
Nov 25, 2016

Michael welcomes Daniel Crosby, author of “The Laws of Wealth: Psychology and the Secret to Investing Success.” His background is in behavioral psychology and he sees the markets as a great backdrop to view human behavior in a real world setting.

Michael and Daniel start breaking apart the efficient market theory into two concepts: 1. You can’t beat the market, and 2. The price that you see is always right. They discuss debate in the academic world between the efficient market camp and the behavioral finance camp. Daniel says that the 2008 crash shows where the efficient market theory starts to break down. He moves into value and momentum trading.

Daniel brings in research proving that rules based approaches is 94% more successful than expert personal discretion. “Let your profits run and cut your losers short” is perhaps the biggest rule in trend following which takes great psychological discipline. Daniel says that it is an easy concept to grasp, but so hard to follow. Any investment discipline rooted in human psychology has a much better chance of working and sticking around than other strategies that don’t take human nature into account.

To make the risky choices Daniel says you need a mentor. Humans don’t do well with volatility and uncertainty. We live in the present and not in the future so a lot of people need coaching to look beyond the day to day. The hallmark of a good investor realizes that the rules do apply to them and they own the fact that they are no more gifted or special than the next person. Most investors tend to leave about 50% of their profits on the table due to bad emotional decisions.

Daniel says that everyone talks about the idea of “trouble is opportunity” but they don’t really live by it. People need to take a closer look at what “opportunity” really is. They need a rule, system or automation in place that makes them do the thing they don’t want to do. Michael and Daniel finish up the podcast talking about “benchmarks” and how they hinder investors performance and aid in making bad decisions. People who have personal benchmarks rather than index benchmarks have shown to trade more successfully.

In this episode of Trend Following Radio:

  • Expert discretion
  • Efficient market theory
  • The eradication of guinea worms
  • Human ego
  • Warren Buffett and his trading strategy
  • Passive investing
  • Sigmund Freud’s impact on trading
  • Standard deviation as a proxy for risk
  • Matching “the benchmark”
Nov 21, 2016

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.

Jim and Michael start the conversation off talking about WikiLeaks, who the global elites are, and how they are slowly being exposed. WikiLeaks is showing the private face of how politicians think and giving a behind the curtains look into their lives. People are losing confidence in these “elites” and the “elites” are starting to lose confidence in themselves.

In Jim’s latest book, “The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis,” he talks about 1998, 2008 and 2018. Jim gives these dates as examples of financial crises that happen (and will happen) every six to ten years. He relates financial panics to earthquakes. If you could stop an earthquake mid earthquake, this is similar to how we have been dealing with financial crises over the years. When bubbles are created, and then bailouts occur, government is only putting a stopper in the problem, however the problem is still there and building. The next bailout can’t come from the central banks.

Jim and Michael finish the podcast discussing cyber hacking and WWIII. Jim believes WWIII has already begun between Russia and America on a cyber warfare front. Cyber warfare has been happening between Russia and the U.S. for years. It is the worse kind of attack because you can get into major operating systems. Jim uses the operating systems of the Hoover Dam or getting into the operating system of the New York Stock Exchange as examples. If a terrorist got into the operating system of the Hoover Dam and opened up the flood gates it would wipe out hundreds of thousands of people.

In this episode of Trend Following Radio:

  • IMF
  • Long Term Capital Management
  • Federal reserve and bailouts
  • Efficient market theory
  • Bayes theorem
  • Complexity theory
  • Cyber warfare

Free copy of Jim's new book: Go here.

Nov 18, 2016

John Miller, author of “QBQ: The Question behind the Question”, is on today’s podcast. John’s message is all about person responsibility. His dad was the wrestling coach at Cornell University and he taught John the foundation for his way of thinking early on.

What could I have done different? How could I have done a better job? These are just a couple questions John tells people to ask themselves before they try and pass blame onto someone else. John shares a personal story of someone going above and beyond in their service. This story is referred to as “The coke story.” He shares it with every audience he speaks in front of because it is the perfect example of someone going above and beyond. John says that people need to rise above situations, swallow pride, and fix problems even if it wasn’t their mistake to fix.

Next, John shares what he did before writing books and doing speaking engagements. He was bored and depressed working behind a desk. Michael asks, “Even in a bored and depressed state, did you ever have a victim mentality in your psyche?” John shares another personal story about him shutting down an entire branch of his company (for good reason) so he could move locations and be in a more positive place. He says that he has always been proactive in how he looks at a situation. He gives a few “rule of thumb” phrases to try and stay away from: Whenever you ask “Why me”, that is falling into a victim mentality. “When” questions are typically linked to procrastination. “Who” questions seek culprits or people to pass blame onto. Ask questions that contain an “I” in there because "I" can only change me.”

In this episode of Trend Following Radio:

  • Staying accountable for your actions
  • Social media bullying and accountability
  • Stress is a choice
  • Asking yourself the right questions to stay accountable
  • Entitlement
Nov 14, 2016

Are markets efficient? Can you beat the market? Is the market the right price? These are questions Michael answers today. Michael brings in Benoit Mandelbrot to help explain the efficient market hypothesis and where we have all gone wrong in our thinking over the years. Next, he goes to Richard Feynman to explain the scientific method and how one goes about comparing and contrasting. Lastly, Michael lets Gerd Gigerenzer elaborate on the concept of heuristics.

In this episode of Trend Following Radio:

  • Efficient market hypothesis
  • Scientific method
  • What is a heuristic?
  • The market price
  • What if money was no object?
Nov 11, 2016

Roger Housden is an author, speaker, and writing guide. He writes for “living and writing wild.” He has authored 22 books and has been featured everywhere from the New York Times to the LA Times. His latest book is titled, “Dropping the Struggle.”

Michael and Roger start the episode by breaking apart Roger’s book title, “Dropping the Struggle.” Roger looks at different areas of life where struggle doesn’t work such as the struggle for meaning or purpose of life, the struggle for love, and the struggle against change, just to name a few. Next, Roger expands on the idea of “the moment of now.” He says that the idea of “fate” does not mean that your life is predetermined. The love of ones fate, and embracing fate as your life is how you write your own story. Planning for the future has its place, but when it preoccupies current life completely, then it can be problematic.

Next, Michael and Roger talk about the always occurring “end of the world” debate going on. They use the upcoming election as an example. Once the presidential election is over, the debate will move onto something else. Life is a constant river. There will always be ups and downs. It is just the way the world works. It is how people respond to the ups and downs that define how things work out.

Love is the next topic of conversation. Roger says that there will always be imperfections with love but even those imperfections contribute to who we are as people. If you take those imperfections out, then we wouldn’t be the people that we are. It is part of the process of humility. Michael and Roger finish up discussing the differences between eastern and western cultures.

In this episode of Trend Following Radio:

  • Reflective contemplation
  • The moment of now
  • The fantasy of control
  • Imperfections with love
  • Buddhist culture
  • Individuality in western culture
Nov 7, 2016

My special 500th episode is a 6-hour aggregate show featuring Charles Faulkner.

Nov 4, 2016

Jenny Blake is author of “Pivot: The Only Move That Matters is Your Next One.” She is a former Google employee and has a perspective that everyone can learn something from, especially if you feel like you are at a plateau in life.

Michael and Jenny start the conversation off with the benefits of yoga. Jenny says that “Your body is your business.” She quickly realized that when her body was operating at 50% then her business was operating at 50%. Yoga has always been her outlet and her source of strength, flexibility, and one of her biggest accelerators of focus.

Michael asks, “How did we get to this point where everyone thinks that life goes in a straight line?” Jenny says we are all hungry for a sense of adventure, however we so often resist change. 2008 was a game changer that made many realize that anything can happen at any time. Social media has contributed to this also by creating a sense of restlessness and what Jenny refers to as “cognitive junk food”.

Jenny talks about the word “plateau” next. Plateau is the word she uses for when one thinks things/life are generally OK and then things start to gradually decline. When you hit a plateau, it is usually a case of mastering the job that you are doing at hand. It isn’t about personal failure. Plateau’s are more about figuring out what is next, how you can continue to grow, and how you can make the most impact on the world, Jenny interviewed a wide variety of people from peak performers to others who peak in some other way. She found that pivots were the most successful when the answer was already within someone. When it doesn’t work out is when people try to pivot too sharply. We can’t always know 100% if a pivot is going to work or if it is right but you need to put yourself outside of your comfort zone and take the risk.

Jenny moves on to explain what she calls “the pivot method”, which is comprised of a four step process. Plant, is the first step: One foot stays planted and the other foot pivots and scans the other options. It is about where you want to end up one year from now. The second step is scan: As you plant your feet you scan all the options. The third step is piloting: This is the experimentation phase. The last step is launch: This step is exactly how it sounds, you are launching into whatever that pivot is that you have been experimenting with. Michael and Jenny give lots of personal examples of all of these steps and go into great detail.

In this episode of Trend Following Radio:

  • Ditching the cognitive junk food
  • Efficiency
  • The pivot method
  • Mindfulness practice
  • The happiness formula
  • Rejection is a stepping stone
Oct 31, 2016

Norton Reamer is the former Chief Investment Officer and CEO of Putnam Investments. He also founded and ran United Asset Management for 20 years. He has 50 years of experience on Wall Street. Today, Michael and Norton talk about his new book, “Investment: A History.” It is a detailed anthology on investment.

Norton stresses that everyone has a responsibility to understand their investments and to educate themselves to know what they are getting themselves into. Most people seem daunted by the challenges of investing. Real ownership, seeking a value, the role of leverage, and resource allocation are four key points of investment that Norton lays out in his book. When someone makes an investment, they need to really own that investment. It isn’t just a piece of paper.

Michael moves the conversation to economic bubbles and asks, “What are some of the timeless lessons that can be learned from bubbles you have witnessed in your lifetime?” Norton’s favorite bubble to have witnessed in his 80+ years is the latest bubble that popped in 2008. It was the way in which the bubble was created that fascinated him. He relates it to the great depression and discusses the similarities in recovering from it.

Next, Norton gives his perspective on efficient markets vs. the behavioral school. He says that it is a conundrum that has not yet been solved. Survivorship bias is the next controversial topic. They discuss the success of Warren Buffett and the “survivorship bias” argument that has been attached to him. Buffett has been around for many decades and both men agree that there is much that can be learned from Buffett. On the other side of the spectrum is Bernie Madoff. Norton explains how an operation like Madoff would be almost impossible to pull off in today’s markets. He also agrees with Michael in saying, “I would be deeply skeptical of someone producing 1% returns every month. You need risk to have returns like that.”

Michael brings up tail risk next. Norton describes tail risk as, “A one in a one hundred year event.” Things can be rare and unlikely but it is not the same as saying something is impossible. Conditions can always get extreme and produce “a one in a one hundred year event” and wipe you out. Norton uses Long Term Capital Management as a great example. Michael and Norton finish the podcast stressing that people can never be too cautious when investing in the markets. Educate yourself and prepare for risk adequately.

In this episode of Trend Following Radio:

  • Personal responsibility in the stock market
  • The role of financial leverage
  • Resource allocation
  • The suspension of diligence during economic booms
  • Efficient markets vs. Behavioral markets
  • Warren Buffett and survivorship bias
  • Tail risk
  • Quant and momentum style trading
  • Practicing caution in the markets
  • What impact does interest rates have on the value of assets
Oct 28, 2016

David Stockman is on the podcast today for his second appearance. He is a former United States congressman, who also served as the Director of The Office of Management and Budget under president Ronald Reagan. His books include, “The Great Deformation”, and “Trumped: A Nation on the Brink of Ruin… And How to Bring it Back”.

Michael and David start off discussing the recent news of Larry Summers suggesting that the Fed should start buying common stocks. David says that this is an act of sheer desperation and that any economist, 20 years ago, would have never come up with such an idea. What has happened is that policy makers have been led into a dead end path. “Madness” is how David describes the Fed right now. The mentality people have today, with Janet Yellen, is that intervention is necessary and without it, the whole system will fall apart. This mentality was not present prior to the year 2000 or maybe even 2008. Wall Street and Washington applaud the policy only because the market continues to go up.

Michael turns the conversation to the present election and asks David how he perceives the rise of Donald Trump and Bernie Sanders. “What does it say about America’s present state of mind?” David says it shows that America has had enough. The public is responding to Trump because he isn’t part of the system. Regardless of Trump’s stance on issues he will probably get a large part of Sanders supporters because they both have an “against the grain” political stance. David refers to Hillary Clinton as “the class president of a failed generation”. He gives examples back to 1991 when Bill Clinton was president, pointing out the senseless wars and damage that has been done to the economy due to policy. Clinton is “A survivor of what has been a 30 year consolidation of bad policy” says David. Hillary Clinton was the survivor who happened to be in the right place at the right time.

Next, David goes into his stance on Glass Steagall and how he would reinstate it in a way that would re-stabilize the financial system. Michael then has David elaborate on Deutsche Bank and some of the other problems the European banking system is facing. Michael asks, “What will happen if there is another 50% decrease on the S&P? What will the authorities do next?” David believes they are out of options. Going to negative interest rates will create a firestorm that they can’t take on. It will induce the sensible people in America to riot. A real correction will not happen until the market is able to stay down and correct from the damage that happened in the propping up in 2008. Michael and David finish up the podcast discussing the Chinese economy. David believes their economy is just as unsustainable as the United States. They are a “huge financial accident waiting to happen”.

In this episode of Trend Following Radio:

  • Glass Steagall
  • Clinton and Trump campaigns
  • Donald Trump and Bernie Sanders supporters
  • Deutsche Bank
  • European banking system
  • Sub-zero interest rates
  • Chinese economy
  • 2016 Election as a turning point in America
Oct 24, 2016

Michael Covel interviews Milton Friedman. Of course, Friedman is dead. Such the conundrum.

In this episode of Trend Following Radio:

  • Free lunch myth
  • Robin Hood myth
  • Collectivism
  • Case against equal pay for equal work
1 2 3 4 5 6 7 Next » 21