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Trend Following with Michael Covel

Bestselling author Michael Covel is the host of Trend Following Radio with 7+ 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 www.trendfollowing.com/podcast.
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Now displaying: 2018

Bestselling author Michael Covel is the host of Trend Following Radio with 7+ 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.

Sep 17, 2018

Ken Kocienda was a software engineer/designer at Apple for over fifteen years and is now the author of “Creative Selection: Inside Apple’s Design Process During the Golden Age of Steve Jobs.” After being introduced to the internet in 1994 he taught himself computer programming and made his way through a succession of dot-com-era startups, before landing a job at Apple in 2001. He worked on software teams responsible for creating the Safari web browser, iPhone, iPad, and Apple Watch.

Ken entered college with the mindset of becoming a history professor or even a photographer. He had various interests in college, however none of them were in the technology sphere. He moved to Japan after college for a few years and upon moving back to the United States, he was introduced to the internet for the first time and instantly intrigued by it.

Ken interviewed for Apple in spring of 2001 before the iPod had been released--Apple was still relying on the Mac as their main revenue stream at the time. Ken had loved Apple products since he saw his first Mac in 1984 so when he was hired on at Apple it was surreal. His first job was to make Apple a web browser of its own – what we all know as Safari today. Later, in 2004, he joined the team to make the software for the iPhone’s touchscreen operating system, among other products.

Inspiration, collaboration, craft, diligence, decisiveness, taste and empathy are seven attributes Ken uses to describe how Apple became the success story they are today. Steve Jobs and Apple chased perfection and demanded nothing short of it.

In this episode of Trend Following Radio:

Pyramid of demos
Steve Jobs thought process
Apple company philosophy
Completely present in the moment
Reality distortion field
Creative selection
Green Bay Packers and Vince Lombardi

Sep 14, 2018

Terence C.M. Tse is an educator, speaker, advisor and commentator. He is a co-founder of Nexus FrontierTech and co-author of “Understanding How the Future Unfolds: Using Drive to Harness the Power of Today’s Mega Trends.” His mantra is “You can’t predict the future, but you can be ready with a plan.”

Terence’s book focuses on a term he calls “Presentcasting.” He does not promote forecasting but rather teaches people to look at what’s in front of them and see how things are unfolding in current time. He has created the acronym DRIVE – defining 5 interrelated mega trends: demographic and social changes, resource scarcity, inequalities, volatility, complexity and scale and enterprising dynamics. These are the five directions Terence points clients in when they start thinking about improving their lives.

What is one way to step outside the box and get a better look at trends unfolding? Travel. Traveling is crucial to seeing the speed in development and change happening around the world. Desire to climb the economic ladder is not exclusive to one culture or another. Everyone is looking for the same economic wealth. Most cultures promote the desire to get a college degree, however this leaves young adults lacking the ability to take risks. The education system trains students to study, take exams well and work in certain defined jobs. However, in today’s world learning how to deal with uncertainty, have an entrepreneurship mindset, and take a little risk are the skills that will help young adults get ahead an prosper.

In this episode of Trend Following Radio:

Preparing of uncertainty
Entrepreneurship
Economics abroad
New technology
Rise of the internet
Disappearance of white collar jobs
Student loans

Sep 10, 2018

Bob Woodward Spins John Belushi with Michael Covel on Trend Following Radio.

Sep 7, 2018

Gregory Aldrete is a professor of history and humanistic studies at the University of Wisconsin–Green Bay, where he has been teaching since 1995. His emphasis is on rhetoric and oratory, floods in Rome, ancient Greek and Roman history, and daily life in the Roman world. What was life like in ancient Roman times? How did people do things in the ancient Roman Empire? These questions are what fascinates Gregory and keeps him moving forward in his research.

What relevance does ancient history have to us today? We are ever presently walking in the footsteps of those who came before us and until you understand the history of prior civilizations, you cannot fully understand who you are. It is the blunders and the achievements of our ancestors that have built up what we see today. There is not much that can be taken away from talking heads in the news and on Twitter, but much can be learned from the study of history.

How does Gregory describe a military blunder? To be a true blunder, the situation must have been avoidable. It could have or should have turned out a different way, but because of someone’s mistakes it didn’t. One of the biggest failures of leadership, which consequently leads to blunders, is overconfidence. Michael and Greg give examples of catastrophic blunders ranging from the Battle of the Little Big Horn to Napoleon and Hitler.

In this episode of Trend Following Radio:

Butterfly effect
Overconfidence in leadership
Napoleon’s biggest blunder
Battle of the Little Big Horn
Hitler
D-Day
Technology and understanding its potential

Sep 3, 2018

Speed with Michael Covel on Trend Following Radio. Michael goes back to his archives for two of the fastest men in the world. Risk takers extraordinaire!

Aug 31, 2018

Safe is Not Really Safe with Michael Covel on Trend Following Radio.

Aug 27, 2018

Bob Enck is the CEO of Equinox Funds and has overseen all operations at the fund since March of 2007. Prior to joining Equinox Funds, Bob worked for about 20 years with large, highly regulated health care organizations including Bristol-Myers Squibb as well as with more entrepreneurial venture capital funded organizations.

When was Bob exposed to trend following for the first time? What was his a-ha moment? While he was doing merger and acquisition work, a couple of his friends consistently would ask him to look over literature from their firm to get input. His first exposure to trend following came from that research. The concept of trend following clicked with him and “just made sense.” His real light bulb moment was realizing that Equinox funds could make money in up and down markets. His friends soon asked him to join their company as CEO.

What is so unique about Equinox Funds? They have paved the way in researching and developing alternative investment strategies for clients through unique investment vehicles. They created the first multi-strategy managed futures mutual fund–the Frontier Fund. In a field where many companies tend to become complacent and set in their ways, Equinox brings innovation and creative thinking to the market. Bob and Michael explore the full range of issues across the alternative space.

In this episode of Trend Following Radio:

Trend following in up and down markets
Drawdowns
Trend following performance
Discretion
WTF
Forecasting

Aug 24, 2018

Peter Leeson is an economics professor at George Mason University and is known for connecting rational choice theory with unusual domains. He looks at human behavior as a series of puzzles that are being solved by those involved. He focuses his studies on everything from bizarre rituals and superstitions to the behavior of Caribbean pirates. Peter’s work has also been quoted as “Freakonomics on steroids.”

How does Peter come up with some of his “crazy” ideas? He likes to have a broad library to read from, particularly history books. As he reads he comes across a lot of practices that may seem outlandish to most, but fascinating to him. From there he digs deeper and finds meaning in certain practices through religion, economics, politics, etc.

Throughout Peter’s work it is clear that the main motivator driving behavior is incentives. What happens when we have government incentives vs. private incentives? Michael and Peter finish the podcast talking government intervention, wealth creation and cultural behavior driving capitalistic efforts.

In this episode of Trend Following Radio:

Somalia pirates
Anarchy vs. government
Medieval law and order
Trial by jury
Logic of incentives
Street hustlers

Aug 20, 2018

Brooks Koepka has won three major golf championships in the last 14 months. He has had the emotional fortitude to push through the obvious pressures of being on the top, especially for being only 28 years old.

Brooks wasn’t able to go pro right out of college and moved to Europe to get his PGA tour card. He wasn’t thrilled about having to go overseas to get his chance at the pros in the U.S., but with a chip on his shoulder he used that as motivation to push forward, excel and win championships.

In this episode of Trend Following Radio:

Emotional fortitude
Operating outside the system
Extreme focus
Cryptocurrency crashes

Aug 17, 2018

Lawrence Krauss is a theoretical physicist and cosmologist, professor at Arizona State University, director of its Origins Project and author of bestselling books: “The Physics of Star Trek” and “A Universe from Nothing.” He is an advocate for science based data, public policy based on sound empirical data, and scientific skepticism. His goal is to reduce the influence of superstition and religious dogma in popular culture. His most recent book is “The Greatest Story Ever Told–So Far: Why Are We Here?”

When did Lawrence first discover he was a skeptic, someone who would think outside the box? He was encouraged to think for himself from a very early age. He grew up Jewish but slowly grew out of ideas that surrounded the religion. No real a-ha moment, just gradually decided that religion wasn’t something he could believe in. In 6th grade he also began doing poorly in school. His parents moved him to a different school where he subsequently did much better. Lawrence knew that he wasn’t a different person, but it was other people’s expectations that wavered how he performed. From then on, he was conscious of not letting others opinions of him bring down his performance.

Richard Feynman has played a large role in Lawrence and his studies. He is a great example of someone who did not let other’s hinder him. Feynman was charismatic, intelligent, and excited about all things new – he didn’t rely on other’s opinions. The charisma Feynman possessed, combined with the genius of his science made him the legend.

How does Lawrence describe science? It is a process rather than a collection of facts. Science helps to establish what is true from what is non-sense. It also breaks the sensible from the non-sensible. Lawrence brings this mindset into religion taking a controversial stance saying, “God is completely irrelevant to science.” He fiercely believes that the idea of religion was created as a way to explain how the world worked before we had the technology and science to know how it actually works.

In this episode of Trend Following Radio:

Big bang theory
Religion in science
Simulations
Skepticism

Aug 13, 2018

While Michael was visiting the United States recently his assistant sent him some inspiring old Time Magazines and Saturday Evening Post Magazines. Some that particularly stood out? A 1959 Time Magazine with a story about Nicolas Darvas and a 1976 Time Magazine profiling Richard Dennis when he was 27 years old. These two men laid so much of trend following thinking and to see some original articles in print was inspiring.

In this episode of Trend Following Radio:

Modern American male
Trend following fundamentals
Philosophy behind trend following
Black swans
Fundamentals
Ego in trading

Aug 10, 2018

Gabriel Radvansky studies mental model theory for human memory and cognition. He strives to understand how people create, organize, store and retrieve mental models. Also, how younger and older adults differ on their use of mental models.

What triggered Gabriel to study cognition memory? He was hooked from the day he took his first introductory psychology class. His teacher’s description of what a psychologist did instantly caught his attention and from there he knew the path he wanted to go down. His original major in college was physics, he then switched to AI computer science and moved into psychology. Because of his other majors, he comes at psychology from a scientific approach.

Gabriel has done extensive research on how a person’s environment changes ones memory. Why does walking through doors make you lose your train of thought? Moving from one environment to another, your brain naturally wants to leave some things behind and pick up new things. Different rooms represent different memories and your brain has been trained to adapt. Humans have the same type of trigger when it comes to computer windows and stories within a book – when a character goes from one location to another, information gets forgotten and lost.

Memory is not about the past – we have memories so we know what to do now, and to help us know what to do in the future. What helps one memory stick more than another? The more emotion linked to a memory, the more vividly you remember those events. Memories with an emotional consequence trigger better and faster than those with no emotion linked to them. What are some steps you can take to help your memory? Write things down and have as many broad experiences as you possibly can.

In this episode of Trend Following Radio:

Event cognition
Work environments
Forgetting curve
Long term vs. short-term memory
Environments where our brains learn best
Memory research

Aug 6, 2018

Trend Following Deep Dive with Michael Covel on Trend Following Radio

Aug 2, 2018

Bradley Campbell is a sociologist whose research focuses on moral conflict — clashes of right and wrong and how they are handled. His work primarily looked at genocide arising from large-scale interethnic conflicts , but recently he has begun to examine smaller-scale conflicts on modern college campuses. Since about 2013 he has studied the phenomena of micro aggression complaints, calls for trigger warnings and safe spaces. He views this new era as, “Manifestations of ongoing moral change and the clash of different moral ideals.” He addresses these topics in his book, “The Rise of Victimhood Culture: Micro aggressions, Safe Spaces, and the New Culture Wars.”

How did Bradley shift from macro aggression and genocide around the world to micro aggression on college campuses? He was always interested in answering, “Why do people have conflict? And what causes someone to handle that conflict in a particular way?” How are conflicts handled with the legal system? When someone has a grievance, do they avoid them? So what makes someone choose violence over law or avoidance?

With every generation, comes a different way of being taught how to handle conflict. Where one generation may have been taught to have thicker skin and not take things so seriously, today’s kids have been taught to take offense to every micro insult that might make them feel uneasy. Where there is more equality and in places that value diversity, there tends to be more sensitivity to insults – therefore lots of micro insults tend to add up to big offenses.

Are college campuses a place that should display robust conversation? Or should they be a place where free speech is censored? Bradley argues that, if anything, college campuses should encourage free speech. Unfortunately, words are being viewed as literally violent and should be censored. Michael and Bradley end the conversation on where college students stand on Trump and politics today.

In this episode of Trend Following Radio:

Hate crimes
Genocide
Micro aggression
Macro aggression
Victim culture
Trigger warnings
Trust in government
Safe spaces
Free speech

Jul 30, 2018

“Risk Savvy: How to Make Good Decisions” by Gerd Gigerenzer is one of Michael’s favorite books from the last 10 years. Today, Michael reaches into the archives and plays an interview with Gerd Gigerenzer.

Gerd is a psychologist who studies the use of bounded rationality and heuristics in decision making and investigates how humans make inferences about their world with limited time and knowledge. He is director of the Center for Adaptive Behavior and Cognition (ABC) at the Max Planck Institute for Human Development and director of the Harding Center for Risk Literacy.

In this episode of Trend Following Radio:

Daniel Kahneman vs. Gigerenzer’s views
Heuristics vs. statistics
Medical check-ups
Taking risks
Instincts vs. expert advice
Relative vs. absolute risk
Benjamin Franklin’s ledger
Heuristics
Unconscious intelligence

Jul 27, 2018

Jeffrey Miron is an economist, served as chairman of the Department of Economics at Boston University, currently teaches economics at Harvard University, and holds the position of Director of Economic Policy Studies at the Cato Institute.

Jeffrey came to be a libertarian from an economics standpoint rather than philosophical, with Milton Friedman at the helm of his influencers. What got Jeffrey heading down the liberty path? Economics teaches that there are unexpected consequences with interventions. Jeffrey randomly started working on drug legalization in college and came to the conclusion that ramifications of outlawing anything would apply to all markets whether it be guns or drugs.

America spends about 50 billion a year as a country to fight drug laws- couple that with missing out on 50 billion a year in taxes if drugs were legalized and one can see the economic missteps. In addition, studies show there would be a decrease in crime, corruption and less interruption of people being able to use drugs medicinally with drug legalization. Michael and Jeffrey not only touch on the economics of libertarianism in America, but around the world.

In this episode of Trend Following Radio:

Cato Institute
Libertarianism
Bootleggers
Ramifications of drug prohibition
Modern Chinese commerce
Ripple effect of bankruptcy
Bernie Sanders campaign
Donald Trump campaign

Jul 23, 2018

A Peaceful Easy Feeling with Michael Covel on Trend Following Radio.

Jul 20, 2018

Mark Blyth is a political scientist from Scotland and a professor of international political economy at Brown University.

What influenced Mark early on? John Maynard Keynes was his foundation. He also was growing up through the permanent recessions of the 1980’s and learning first hand about pitfalls in the economy. He quickly saw how the macro economy was so much different than the micro and how studying the economy as a whole was more important than just looking at the individual.

Mark called the Donald Trump win for Presidency in June of 2016. Why? Trump was willing to acknowledge there was a problem. He was dramatically different and played to the individual rather than big business. In 2015 Wall Street bonuses were twice the amount of the total wages of people earning minimum wage. Since that 2015 statistic, the inequality has only gotten greater. Trump gave people hope that things can change – that he could change them.

What are some macro steps that can get the U.S. economy heading in the right direction today? Dissolve monopolies and raise corporate taxes creating long-term productivity gains. Because of tax ride-offs a monopolized economy has been created. The government has allowed and engineered large businesses to run America and it’s time to re-arrange the model. Another problem? Americans have become dependent on passive investing and don’t know what to do when volatility happens. They have become blind to risk, due to lack of volatility for the last 10 years. Michael and Mark end on the question: “Can the economy sustain the next 10 years like this?”

In this episode of Trend Following Radio:

Trump campaign
Raising interest rates
Tax cuts
Infrastructure
General data protection regulation
Black swans
Passive investing
Efficient market hypothesis

Jul 16, 2018

Markets and Profit with Michael Covel on Trend Following Radio.

Jul 13, 2018

Jerry Muller is a professor of history at The Catholic University of America, where he has taught since 1984. His latest book is “The Tyranny of Metrics.” Quantifying metrics can be a good thing, however, it can easily go too far and have great consequences.

Jerry sees pitfalls of focusing too much on metrics everywhere – schools, hospitals, even venture capital. Children gear their learning toward beating a test rather than intellectually developing their mind. Doctors fixate on standardized performance measures, rewards and punishment, and publicized accountability. The system encourages and sometimes requires doctors to game the system. Venture capitalism, the very field where creativity should prosper, tends to foster an anti-creative atmosphere. Investors want to see data to back up a new product so they can see proof of a future profit. The problem? New innovations don’t have data because they have never been seen before in the marketplace.

Using metrics in schools, hospitals, and business can be extremely useful depending on what context it is used, but alone they are not enough. Human development as well as human experience should be weaved into the equation. Michael and Jerry finish the podcast up talking metrics in China, how it has lead to gaming the system and taken a toll on developing research.

In this episode of Trend Following Radio:

Intrinsic motivation
Tyranny of metrics
Metric fixation
Metrics in law enforcement
Metrics in health industry
Managerial ideology
Powerpoint presentations
Metrics in China

Jul 9, 2018

Michael plays three epic interviews with Ed Seykota, Martin Lueck and Jean-Philippe Bouchaud profiled in chapter’s 12, 13 and 14 of his newest edition of Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets.

Ed Seykota was originally profiled in the classic book “The Market Wizards.” Seykota has played a pivotal role in the growth of trend following trading for 40 years.

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.

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

In this episode of Trend Following Radio:

Govopoly
Systems trading
Diversification
Behavioral economics
Death of trend following
Exploiting vs. exploring
Behavioral biases
Risk

Jul 6, 2018

Christopher Ryan is best known for co-authoring “Sex at Dawn.” The book deals with the evolution of monogamy in humans and human mating systems. In opposition to what the authors see as the “standard narrative” of human sexual evolution, they contend that having multiple sexual partners was common and accepted in the environment of evolutionary adaptedness.

What was the start of Christopher going doing his path? One of the more pivotal moments was when he was an undergraduate in college. He was able to skip his junior year of college and subsequently hitchhiked to Alaska. Before that journey to Alaska, he thought the world was a dangerous place. Once he got outside his bubble and met strangers, he learned how kind and generous people were. It shifted the way he thought about life and the world.

After graduating he spent his 20’s and 30’s backpacking through Asia and South America. His a-ha moment was realizing that most of what he was told about the world was bullshit. Governments have an agenda and prop up their society to make other places seem less superior. Christopher quickly saw that the cultural message telling us that it’s a “dog eat dog world” was not true.

There are different attributes that everyone shares. What is universal? What do we all share? Consciousness, sexuality, comedy, etc. these are all things that translate across cultures and continents. Learning about these things is what excites Christopher and why he continues to learn, study and teach.

In this episode of Trend Following Radio:

Monogamy
Hunter and gatherer society
Agricultural revolution
Culture of women sexuality
Sexual transmitted disease
War on masturbation
Social groups

Jul 2, 2018

Michael shares the Preface and Chapter One of his book, “The Complete TurtleTrader.” “The Complete TurtleTrader” is a classic nature vs. nurture story starring famed traders Richard Dennis and Bill Eckhardt. Are people born with the innate ability to trade? Or can it be taught? Dennis believed that anyone could be taught to trade successful with the right set of rules, Eckhardt disagreed – and from there this epic experiment was born. These men took 23 novice traders, gave them millions and taught them how to be successful on Wall Street.

In this episode of Trend Following Radio:

Nature vs. Nurture
Efficient markets
Beating the market
Systems trading
Behavioral finance

Jun 28, 2018

Bryan Caplan is an 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. Bryan has written several books–his newest being “The Case against Education: Why the Education System Is a Waste of Time and Money.” His main goal for the book is for people to forget education propaganda, look at what is right in front of them and examine what they have learned first hand.

From a young age Bryan always wondered, “Why do I need to learn this stuff? I am never going to use it.” The further he got along in school the more passionate he became about that belief. Yet it wasn’t until he started studying economics that he found there were other like-minded people who thought how he was thinking.

What is the problem with everyone getting a college degree? To stand out you now need to get another degree. Credential inflation has only gone up. People are spending too many years studying subjects that do not interest them, just to graduate and never use that information again. They get multiple degrees to do a job that would have only taken a high school diploma 30 years ago. It has been ingrained in so many that the education system enriches lives. However, the wall between formal education and practical education is ever growing. Bryan doesn’t hate education, he just believes people need to be more realistic about their interests and learning capabilities.

Michael and Bryan finish up discussing Bryan’s new books coming out about poverty and immigration policy.

In this episode of Trend Following Radio:

Affirmative action
Equality without losing quality
College vs. no college
Problem solving vs. memorization
Inert learning
Integrating more play in schools

Jun 25, 2018

53% of Millennials expect to become a millionaire at some point in their life. That is a lot of optimism without a lot of math. Building off that survey Michael quotes some research from a man named Ned Davis titled “Was I too Correct for My Own Good.” Ned is more pessimistic than the Millennials. He see’s the present economy as an uphill battle for making money rather than Millennials who think the money will just fall from the tree’s.

If you can stand outside the crowd and accept the notion of failure you have a great opportunity to succeed over the course of a lifetime. Imagining you are going to make a million dollars without a process is obtuse. Have a good process and stick with it. Michael ends with wisdom from “The Wisdom of Insecurity: A Message for an Age of Anxiety” by Alan Watts.

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