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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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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.

Jan 26, 2018

Charles Faulkner is back on the podcast today. Faulkner is an author, trader, and international expert on modeling the knowledge and performance of exceptional individuals. He was originally featured in “The New Market Wizards” by Jack Schwager. Faulkner has had one of the most popular podcasts on Trend Following Radio. His new work is centered on deciphering the complicated from the complex.

Warren Buffett recently said, “In terms of crypto currencies, generally, I can say with almost certainty that they will come to a bad ending. When it happens or how or anything else, I don’t know.” What does Faulkner make of Buffett’s prediction?

With all this new technology and language most will turn to others for advice. Unfortunately, there are a lot of fortune tellers pushing agendas. The idea of forecasting is to make people move. It is a way of getting people into action and doing things they would never do if they knew the truth. “Why can’t the magical thinkers be accurate?” Charles points out that unfortunately fortune tellers will be right some of the time and “reasoning by resemblance” is a common fallback trap for people.

How should you go about navigating this complexity? Complex and complicated are two very different things and the ability to identify what situation you are in requires a high level of thinking. Complicated situations or problems can be solved by asking a knowledgeable person for advice, reading a book, watching a YouTube video, etc. Complex scenarios take trial and error.

Still not sure if something is complicated or complex? Uncertainty is one quality of complex systems. It has non-linear causes and effects. Some little action can have huge ramifications. In the same way, it takes huge amounts of effort and money to change complex situations, for example: healthcare, opioids epidemic, etc. People frequently think that if they just have more information, different information or a smarter “guy” that they would be better off. Unfortunately, when you are in a complex situation, standard rules don’t apply.

In this episode of Trend Following Radio:

  • Forecasting
  • The rise of magical thinking
  • Reasoning by resemblance
  • Network theory
  • Power laws
  • Crypto currency
  • Complicated vs. Complex vs. Chaos
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