Michael Covel speaks to Tim Dyer, an RIA (Registered Investment Advisor) in La Jolla, CA. Dyer has also seen the brokerage side of the world too, shares insights regarding how these worlds work, and how clients navigate the waters of professional investing advice. Covel and Dyer discuss what an RIA does for the average investor; the difference between trend following fund managers and the RIA world; the difference between hiring Merrill Lynch and hiring an independent RIA; fiduciary suitability; black swan protection; benchmark issues; Warren Buffett declaring The Fed as history's greatest hedge fund; how the Internet might open up the RIA world, and the value of human-based advice in the RIA world; the disingenuousness of focusing only on the benefits, and failing to see the risks; and why some might say it "feels like 1999" today. Want a free trend following DVD? Go to trendfollowing.com/win.
Michael Covel speaks with Michael Konik, author of "The Smart Money". Konik has had a fantastic experience in the world of sports betting, and the parallels between his world and the trend following world are off the charts. Konik and Covel talk about the similarities between Konik's world and the Turtle story; Konik's background and how he came into this world of rule-based betting; some of the stories about "Big Daddy" Rick Matthews (fake name for a very high profile individual featured on 60 Minutes), the main character in Konik's book and the most successful sports wagerer in the world; position limits; Konik's theater background and how it tied in to the experiment; sports betting technique, the line, the Kelly Criteria, and "Big Daddy's" own line; the "brain trust" and how "Big Daddy" led his operation; point spreads; looking for value rather than a favorite home team; the importance of a dispassionate outlook; the importance of knowing why you place a bet or trade; how the brain trust came up with a line better than the other lines out there; the importance of injuries in sports betting. For more information on Michael Konik, visit MichaelKonik.com. Want a free trend following DVD: www.trendfollowing.com/win.
Michael Covel talks to Peter Borish, founder, chairman, and CEO of Computer Trading Corporation. He's also a founding board member of the Robin Hood Foundation, one of the great American charities. Borish has seen much in the financial world over several decades and is a wealth of insights. Covel and Borish have a wide-ranging conversation, covering Borish's charity work, the political side of money, and the trading side. They discuss subjects such as the roots and successes of Borish's charity work; dealing with the fact that you can't help everybody; advice to future non-profit workers; the parallels between non-profits and regular businesses; where things stand today, five years after the 2008 financial crisis; if we're still in an "emergency time" today; corporate welfare vs. social welfare; the lurking black swan and possible equity bubble; discussing whether March of 2009 was like July of 1932; the impact of the internet; Borish's book recommendations and early experiences; and taking the emotions out of trading. Complimentary trend following DVD: www.trendfollowing.com/win.
Whenever Michael Covel sees something totally crazy, totally off the rails, he thinks of "Sloop John B" by the Beach Boys. This is surely the strangest trip he's ever been on. Tonight, he saw Warren Buffett call the Federal Reserve "history's greatest hedge fund". You didn't vote for a hedge fund? Well, guess what? One of America's best investors has declared the Federal Reserve history's greatest hedge fund. Covel discusses hedge funds and "the grand experiment" Buffett talks about. Covel discusses media manipulation and deception. Do you want to be a part of the hedge fund that is the Federal Reserve, or do you want to try a strategy for yourself? Covel moves on to play a clip from Suze Orman, who positions herself as a buy and hold guru, but gives a talk about day trading. Irony is a great way to learn, and boy is there some fantastic irony herein. Receive a free trend following DVD: trendfollowing.com/win.
Today on the podcast, Michael Covel discusses certainty and uncertainty. When it comes to tomorrow, Covel is majorly uncertain. He doesn't know what's going to happen. He can think of the worst case scenarios, though; a Stoic tradition. Many people today figure the crisis of '08 was a few years back, the Fed has everything figured out, and the stock market is at all time highs. There's nothing to be worried about. Covel reads several quotes to start off the podcast, from Gilda Radner and Richard P. Feynman. Covel questions why most investors don't think like this, and notes that 59% of US investors believe the markets can be predicted. Covel discusses the trend following mindset in contrast, and moves on to talk about Ray Dalio and his 100% systematic trading strategy based on fundamentals. But how do you know when you have enough fundamental data to make a decision? How do you account for the remaining uncertainty? Covel explores. Next, Covel talks about using simple heuristics to make decisions. The simplest factor to follow is the price. That's the only thing you can be certain about. So if you can make decisions off price movement, and use that as a simple heuristic for your buying and selling decisions, you might have something that works for dealing with market uncertainty. From a trend following perspective, simple heuristics is all about trading the price. Free DVD: www.trendfollowing.com/win.
Michael Covel speaks with Mike Bellafiore, author of "The PlayBook". Bellafiore trades an entirely different style than trend following, operating on a much shorter timeframe. Covel and Bellafiore discuss the real rewards to being a successful trader; passion in trading; why professional traders fail; parallels between trading and writing; Bellafiore's history and definitions of "prop trading"; trading short timeframes and intraday trading; the "prop desk"; ups and downs in Bellafiore's career; the early history of SMB Capital; Bellafiore's early struggles with his father's health concerns, his mother's death, an SEC investigation, and how "The PlayBook" came out of it; the ten attributes of a great trader; trading psychology and mindset; personality types and short-term trading; microscalping and swing trading; expertise, flow, and mastery; process vs. outcome; entrepreneurship; the importance of coaching; and the four ways to become great at anything. Want a free trend following DVD? Go to trendfollowing.com/win.
Michael Covel talks with Patrick Boyle of Palomar Fund Management. Covel and Boyle talk about directional trading; timeframes in trading and short-term trading; Boyle's background and how he came to be a founding partner of Palomar; Boyle's time working with Victor Niederhoffer; Niederhoffer and his teaching lineage; David Harding and Bill Dunn; Boyle's political stances, the Fed, and the SEC; risk and running a directional fund; performance correlation to the S&P and the trend following CTA's; the big picture takeaways that Boyle learned under Niederhoffer; correlations to people who have come out of Niederhoffer's shop; Monroe Trout; testing ideas; how quantitative analysis is different from technical analysis; the book publishing industry, and why all the secrets might not be in a $20 book; where Palomar Fund Management is at today; foundational advice to the budding fund manager; and libertarianism. Free trend following DVD: www.trendfollowing.com/win.
Michael Covel reads a listener letter he received after his podcast with Gerald Celente. Covel discusses the alternative to not trying, inspiration, and what it takes to be the next David Harding or Bill Dunn. The point is not to be one of these people--it's to give you an above-average chance to make money on your own account. It does no good to compare yourself to billionaires. You can shoot for it, you can strive for it, but you can blow a life and never get there. That's just the pure odds of it all. It's about becoming the next you: your situation. The idea is to be above average and to do the best for your life and your situation. That's the objective. Next, Covel talks about a bizarre accident in China leading into a comment from President Obama about booms and busts. Why are we afraid to criticize Obama? Covel explores. Next, Covel plays a clip from Penn Jillette on the truth, and reads from Tim Price's newsletter. We don't know when the next meltdown will be, but we know it's coming. When? You don't know when, but you need a plan of attack. That strategy has to excel when things are getting a little raw or dicey. Next, Covel plays a clip from Nassim Taleb on anti-fragility. If we know that bubbles are just part of the world we live in, what kind of strategy makes sense in a world dominated by chaos? Trend following is the answer. Want a free trend following DVD? Go to trendfollowing.com/win.
Michael Covel speaks with Gerald Celente, the Publisher of the Trends Journal. Covel and Celente discuss how nefarious the zero interest rate policy really is; forced gambling in the equity markets; the desensitization of the American public; the situation with Syria today; post-dot-com bubble policy in America; solutions to the complex problems today, a "reset to morality", and how it's really up to the individuals to take back what they once had (personal responsibility); deregulation and Glass-Steagall; the days of a level playing field in America; Goldman Sachs and Morgan Stanley being saved in the 2008 crisis, and "too big to fail"; fascism in America; Celente's visit to Vietnam; and war and altruism as trends in 2013 and 2014. This conversation with Gerald and Michael is not designed to make anyone money, but rather it is designed to give an honest picture of the landscape across the world in the fall of 2013. Chaos rules. Volatility rules. This conversation spells out why that is true and its up to you to determine a plan to solve it for you and your family. Free trend following DVD: www.trendfollowing.com/win.
Jim Quinn has a blog called "The Burning Platform", and Michael Covel reads a blog post of his called "Trying To Stay Sane In An Insane World". It's tough to disagree with as Quinn hits the mark. This is a fantastic way to think about Covel's world, the trend following world, in the context of trading. In Covel's world, if Quinn is describing the world accurately, there is no better solution for the chaos than trend following. Quinn makes the case that the chaos isn't going to end anytime soon. Covel goes on to read a short excerpt from CBS MarketWatch that dovetails in nicely to the end of Quinn's piece. This piece discusses the blind optimism of many investors. Covel notes that if this is the landscape that we're facing, if this boom-bust cycle is here in perpetuity, then there's only one strategy that makes any sense. There's only one strategy that has any proof of success: trend following. Trend following is the strategy that takes advantage of societal insanity: whether it's the politicians and the bankers, or the people that blindly follow them. At the end of the day once you've accepted the wisdom of these two articles, you can't really get upset about it. That's the world, the hand dealt. So what can you do? You can pretend to know all and be a fundamental follower, but if you've got a rigged system, the fundamentals don't matter. Or you can accept our upside down world and take advantage of it with a trend following mindset and strategy. Free trend following DVD: trendfollowing.com/win.