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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 www.trendfollowing.com/podcast.
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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.

Jul 4, 2016

Everyone was told to trust the system and be happy: “Save your money and interest income will be your retirement.” This has come to be completely untrue and people are collectively beginning to wise up, as seen in Brexit.

Michael goes into a timeline of market crashes illustrating trend following success: 1973-1974 stocks go down 50% and trend following kills it. 1987, known as Black Market Monday, US stocks go down 20%+ in a day and trend following kills it. Barings Bank collapses spring of 1995, trend following kills it. August 1998, Long Term Capital Management craters, and trend following made a fortune. It was almost a zero sum transfer from LTCM to trend followers in August of 1998. Spring of 2000, the dot com bubble bursts and trend following cleans up again. 2002 was one of the best trend following performance years ever. After 2002 another bubble is built and when it burst in October of 2008, trend following had outstanding performance results yet again. When the majority of people think the world is ending, trend following is reaping the profits. Brexit? Yes, too.

Nobody can predict the future but if you want to play the game, you have to place bets. Trend followers were in established trends once Brexit hit. They do not predict, but they have educated bets. Michael ends with one question, “What side are you going to be on? The side of the winners or the side of the losers?” It’s your choice.

In this episode of Trend Following Radio:

  • Boom and busts
  • Brexit
  • Certainty in markets
4 Comments
  • a year and a half ago
    Dan Mulvaney
    Michael,
    I completely believe in the concept/strategy of trend following. And as I understand it, in order to be successful it requires multiple entry's, cutting loose the losers, and letting the winners run. Unfortunately at one pick a month, the concept falls apart - or at a minimum barely capitalizes on the strategy. Do you have other products that follow a true trend following investment technique? I am not critisizing, just looking for more. I am willing to bet your personal portfolio has many irons in the fire - and THAT is the side I'd like to be on....
  • a year and a half ago
    Frances
    Michael,

    Would you increase the amount of recommended trades you give to your subscribers from one a month (ignoring for the moment the 3x booster which increases the exposure to the same underlying position via derivatives)to maybe two per month and consider including shorts in your recommendations where your system identifies a short that is a top trend at that time.

    Look forward to your recommendation each month.
  • a year and a half ago
    Roger Orton
    I understand what you are saying, but in trend following you didn't give me any stocks to invest in. I also follow Jim Richards recommendations and his strategy because for Brexit has had a profound effect on mu portfolio. The day after Brexit my account went up $165,000, the next day,45K and has averaged around $=40-50K per day since. Today it changes 67 K alone. I believe in your concepts enough that I have set aside aside 100k to invest in your ideas in Trend Following and Vertical Trade Alert. I will see if your advise will work. I have faith in you. What should I do next? Thank you Roger Orton
  • a year and a half ago
    Aubrey D'Souza
    Why do we have so to be so dramatic - talks about markets - what is outperforming etc... where opportunities lie - CLX, STZ, EW, KHC - yes gold is good but not only area making money