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Trend Following with Michael Covel

Bestselling author Michael Covel is the host of Trend Following Radio with 6+ 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 trendfollowingradio.com/rss.
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Now displaying: April, 2017

Bestselling author Michael Covel is the host of Trend Following Radio with 6+ 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 trendfollowingradio.com/rss.

Apr 28, 2017

Scott Hartley is a venture capitalist and startup advisor. He has served as a Presidential Innovation Fellow at the White House, a partner at Mohr Davidow Ventures, and a venture partner at Metamorphic Ventures. Prior to venture capital, Hartley worked at Google, Facebook, and Harvard’s Berkman Center for Internet & Society. He is a contributing author to the MIT Press book Shopping for Good, and has written for publications such as the Financial Times, Inc., Foreign Policy, Forbes, and the Boston Review. Hartley speaks on global entrepreneurship with MIT, the World Bank, Google, and the U.S. State Department. He holds an MBA and an MA from Columbia University, and a BA from Stanford University. He is a term member at the Council on Foreign Relations.

Hartley is the author of “The Fuzzy and the Techie: Why the Liberal Arts Will Rule the Digital World.” Scott brings a wealth of knowledge from across Silicon Valley and beyond to the subject. He gives a perspective: What kind of background do most techie’s start with? The term “fuzzy” relates to liberal arts and “techie” to computer science and electrical engineering.

Michael and Scott also discuss Mark Zuckerberg. Zuckerberg is a curious skeptic. He challenges norms, is deeply curious about science fiction, and has many interests outside of the technical world. How do we know where this curiosity came from? Where did Zuckerberg and other successful techies cultivate their curiosity? Michael and Scott give insight into these questions and finish up the podcast discussing the ethical and moral implications of technology.

In this episode of Trend Following Radio:

  • Ethical side of technology
  • Addictions on top of addiction
  • Artificial intelligence
  • Curiosity and skepticism
  • Frontier markets
  • Liberal arts in the technical world
  • Myth busting the standard path to a tech career
Apr 24, 2017

The new edition of Trend Following has gone from 100,000 words to 230,000. It is out now and it is the definitive effort on trend following. Other books have been written and they have given some good insights. However, this new edition is it. Today, Michael reads passages from the Preface and Chapter 1 of the 5th edition of Trend Following. This sneak peak gives listeners a flavor of how Michael is pushing the envelope in today’s world and further enhancing an understanding of trend following.

In this episode of Trend Following Radio:

  • 5th edition of Trend Following Preface
  • 5th edition of Trend Following Chapter 1
Apr 21, 2017

Erik Wahl is author of “The Spark and The Grind,” “Unthink,” and “Unchain the Elephant.” Starting from an early age Erik was never encouraged in the arts but rather encouraged in his reading, writing and athletics. He believed that if he got straight A’s he would be successful later on in life. Things generally worked out for him–until the Dot-com bubble hit. He was devastated and realized he needed to figure out a new way to live.

Erik started meeting artists rather than business types. He came to find that mainstream society does not understand artists and because of this, many of these people would become, for lack of a better term, “tortured artists.” The love of art is what launched him into work as a professional artist. Art was not about producing a product but rather about a new way of thinking. He began processing information in a whole new way, not just linear.

Everyone has creative ideas. What sets people apart is how they chose to leverage and use it. When Erik does any presentation he starts off creating a painting on stage to rock music in 3 minutes. He is disrupting thinking by showing the audience rather than telling them. Unless you know how to use agility and mental dexterity you will be left behind. Erik teaches how to tap into creativity and adapt to the increasing rate of change happening in the world.

In this episode of Trend Following Radio:

  • Dot-com bubble
  • 2008 crisis
  • Routine and structure
  • Misconceptions of overnight success
  • Embracing the grind
  • Mental agility
Apr 17, 2017

Michael’s first edition of Trend Following hit April 2004. Since both Michael and trend following were largely “under the radar at the time” the publisher did not put much money into the first edition and it was not carried in bookstores. Since it’s inception, however, Trend Following has become a bestseller with 4 editions, 100,000+ sold, and now a 5th edition out April 24, 2017. Michael goes into detail outlining this new edition (double the size) and how it gives Trend Following a whole new look and feel across 688 pages.

In this episode of Trend Following Radio:

  • What went into the newest edition of trend following
  • Performance
  • Survivorship bias
  • Efficient market theory
  • Volatility
Apr 14, 2017

Mark Weatherford is an American cyber security professional who has held extremely high positions in both the public and private sector. He was appointed the first deputy under secretary for cyber security at the US Department of Homeland Security from 2011-2013. Mark brings a wealth of experience and insight into a subject that all of us should be worried about in this day and age. He gives examples of how things are unfolding in regards to the cybersecurity and steps we can take to try and mitigate risk.

The basic infrastructure of the internet is essentially the same as it was back in the 90’s. A lot of physical infrastructure hasn’t really changed for most things since they were designed, however there has been layers of technology added. Michael uses the Hoover Dam as an example of old infrastructure with new technology layered on and asks, “Is it possible for the dam’s security to be hacked?” Mark says he always works from the viewpoint that absolutely everything can be broken into.

Michael moves on to ask about Hillary Clinton’s home server and what the scandal entailed. “Puzzling” is the word that Mark uses to describe the situation. She hired a company to build an email server and essentially put it physically in her basement but managed it remotely. None of this made sense or seemed well thought out. There are plenty of things you can do to protect infrastructure and it didn’t seem that they put any of those measures in place.

Michael and Mark end on discussing the idea that intelligence is all about deception. This is one of the biggest challenges in working in cyber security — figuring out what is true and what is false.

In this episode of Trend Following Radio:

  • Cyber hacking
  • Hillary Clinton server scandal
  • Podesta hacking
  • Cyber security
  • “Model what you admire”
  • Partisanship in cyber security
  • Game theory
Apr 10, 2017

To celebrate my upcoming fifth edition of Trend Following (April 24, 2017)…my mega episode with Tom Basso is here again by popular demand. If you want to know the right way to think, Tom brings it. Michael plays all of Tom’s 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 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.

In this episode of Trend Following Radio:

  • Speculation
  • Fighting against emotions
  • Catastrophic events
  • Separating trading from politics
  • Advice to newcomers entering the CTA industry
  • Time Management
  • The importance of routine
  • Money management vs. Trading
Apr 7, 2017

Cass R. Sunstein is the Robert Walmsley University Professor at Harvard Law School. He is also founder and director of the Program on Behavioral Economics and Public Policy and is the most referenced law professor in the United States. From 2009 to 2012 he served under the Obama administration as Administrator of the White House Office of Information and Regulatory Affairs. Cass is the author of “#Republic: Divided Democracy in the Age of Social Media.”

This past Presidential election created a huge rift within parties, largely propelled by social media and even search engine interference. GOOGLE has the ability to filter your searching, pushing things that are suitable to your interests. They are walking a fine line between giving you an easier searching experience and putting you in an echo chamber and shaping how you think. Cass is a big fan of Facebook and Twitter when people are balanced with it. He uses the analogy of cars, “They are great because they get people from point A to point B, however, they do create negatives such as air pollution.” The same can be said for social media.

The founding fathers of the United States wanted a government that gave the opportunity for exposure to the uncomfortable and to have a forum where both sides could interact and hear each other. Madison and Hamilton were told that to have a self governing system it needs to be little and not diverse, but they thought that the opposite needed to happen: A self governing system needs to be large and diverse. If not, the government would end up as a echo chamber. We are now living in what Cass describes as “Hamilton’s nightmare.” Although government is diverse, people are not listening and learning from one another.

In this episode of Trend Following Radio:

  • Echo chambers
  • Limiting people’s horizons
  • Hamilton’s nightmare
  • The daily me
  • Censorship
  • Bernie Sanders followers
  • Donald Trump followers
Apr 3, 2017

Michael has had some of the brightest psych minds on his podcast. Today he pulls together the great psych minds in trading into one podcast. Those interviews include: Brett Steenbarger, Jason Williams, Van Tharp, Daniel Crosby, and Meir Statman.

Brett Steenbarger is a Clinical Associate Professor of Psychiatry at New York State University, and 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.

Jason Williams is author of The Mental Edge in Trading. Jason received his psychiatry degree at John Hopkins. His father is famed trader Larry Williams.

Van Tharp runs the Van Tharp Institute and is 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.

Daniel Crosby is author of The Laws of Wealth: Psychology and the Secret to Investing Success, and co-author of the New York Times bestseller Personal Benchmark: Integrating Behavioral Finance and Investment Management. His background is in behavioral psychology and he sees the markets as a great backdrop to view human behavior in a real world setting. He is also founder of Nocturne Capital.

Meir Statman is a professor of finance at Santa Clara University and a behavioral finance expert. His acclaimed book is titled What Investors Really Want.

In this episode of Trend Following Radio:

  • Envy and happiness
  • Fear of losing vs Fear of missing out
  • Mental accounting
  • Expert discretion
  • Efficient market theory
  • 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”
  • 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
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