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.
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.
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.
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.
Today on the podcast, Michael Covel speaks with Daniel Simons. Simons is an experimental psychologist, cognitive scientist, and Professor in the Department of Psychology and the Beckman Institute for Advanced Science and Technology at the University of Illinois. Simons is most well known for his work on change blindness and inattentional blindness, two surprising examples of how people can be unaware of information right in front of their eyes. His research interests also include visual cognition, perception, memory, attention, and awareness. Covel relates all this to trading and trend following, particularly the price of oil in early 2015. Covel and Simons discuss Simons’ YouTube success; the definition of inattentional blindness; why our intuition about our own minds is often wrong; money managers and weather forecasters; serial tasking, multitasking, and focus; how Simons became immersed in this area of study; memory and attention, and the myths and misconceptions surrounding them; the notion of intuition. gut decisions, and Simons’ thoughts on Malcolm Gladwell’s “Blink”; the idea of preparation in relation to expert performance; the science behind eyewitness testimony; and how our minds don’t work the way we think they do. For more information on Daniel Simons, go to dansimons.com or invisiblegorilla.com. Want a free trend following DVD? Go to trendfollowing.com/win.
Michael Covel speaks with Mark Mobius on today’s podcast. Mark Mobius, Ph.D., executive chairman of Templeton Emerging Markets Group, joined Templeton in 1987. Currently, he directs the Templeton research team which is based in 18 global emerging markets offices, and manages emerging markets portfolios. Mobius oversees a team of more than 50 people managing some $45 billion. Covel and Mobius discuss key events that happened along Mobius’ development and moved him to find emerging markets as his passion; growth across Asia; the importance of being on the ground to see what’s happening in China to have a true picture of what’s going on; why what’s happening in China now is entirely different from the USSR in the early 1980’s; Mobius’ view on Vietnam, its economic and constructional changes; the two Koreas, and whether we’ll see one Korea eventually; the impact of both North and South Korea on their own; Mobius’ outlook on Myanmar; Singapore as an emerging market, and as it is compared to a city in the States; India, its growth, and how Mobius sees it moving forward; and the importance of travel, and how it changes everybody that goes out there and experiences it. Want a free trend following DVD? Go to trendfollowing.com/win.
Michael Covel opens up his first monologue of 2015 with a quote from Willy Wonka & The Chocolate Factory. There you have it: Willy Wonka completely outlining behavioral economics and proper investing all in a film about candy. Next, Covel quotes John Hussman’s recent piece regarding cognitive dissonance. Today, Covel has three examples of cognitive dissonance. First, Covel speaks of a recent case where a high school student was said to have made 72 million dollars. Of course, the story was false, but Covel explores. Many want to believe that these savants exist, but we all know the truth. Next, Covel discusses Hugh Hendry and why he now believes as an investor you have to sometimes believe in things that don’t necessarily exist. Good strategy doesn’t need to change based on the political winds blowing across the world. Next, Covel gives an example from a CNBC writer named Lawrence Delevingne who wrote recently on “hedge fund robots” doing well in 2014. Covel discusses these “robots” vs. “gut-driven human managers” and picks it apart. Why did trend following have such an excellent year in 2014? Covel explores and notes that trend following isn’t concerned with the previous year--it’s concerned with right now. Want a free trend following DVD? Go to trendfollowing.com/win.
Michael Covel speaks with Bryan Caplan on today’s podcast. Caplan is an American economist and professor of economics at George Mason University, research fellow at the Mercatus Center, adjunct scholar at the Cato Institute, and blogger for EconLog. He works in public choice theory. His books include The Myth of the Rational Voter and Selfish Reasons to Have More Kids. He has also written extensively on open borders and pacifism. Covel and Caplan discuss voting, rationality; defining “rational irrationality”; what voting patterns in America might look like if the American stock market looked like the Japanese stock market; economic growth in benevolent dictatorships vs. republics like the USA; the anti-poverty program in China; Caplan’s view on immigration and its effect on the economy; the case for more kids, and why Caplan was so passionate and so inspired as to put out a book on the subject; why genetics matter more than the style in which you raise your kids; Thomas Piketty’s “Capital in the Twenty-First Century” and wealth and income inequality. Want a free trend following DVD? Go to trendfollowing.com/win.
Michael Covel talks with Tom Basso, the trader most famously known as “Mr. Serenity” in Jack Schwager's "New Market Wizards”. Basso, now retired from managing client money, was president and founder of Trendstat Capital Management. Basso 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. Today, he is a privat trader. This is Basso’s fourth podcast conversation, and Covel and Basso talk about the 50% drop in oil and why trend followers have done especially well with this price movement; why people like to blame speculators, and the value of speculation; emotional rushes and emotional devastation; mentally rehearsing catastrophic events; focusing 1,000 trades into the future; separating your trading from your political opinion; trend following and behavioral economics; the importance of not letting your trading define you; and Basso’s advice to newcomers to the CTA industry. For more information on Tom Basso, follow him on Twitter at @Basso_Tom. Want a free trend following DVD? Go to trendfollowing.com/win.