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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.

Oct 30, 2012

How is trend following a bit like the Billy Idol song, "Dancing With Myself"? Michael Covel explains the importance of maintaining an independent spirit, feeling comfortable standing alone and outside the crowd and being your own self. Covel contrasts this to the famous scene in "American Psycho" where a group of executives compare the card stock and fancy presentation of their business cards trying to impress one another. That's the complete opposite of what "Dancing With Myself" gets at. Worry about yourself, not the crowd. Covel then quotes hedge fund manager Hugh Hendry. Hendry holds himself out in public as coming from a fundamental perspective, even though his hero is trend trader Bruce Kovner, who was trained by Michael Marcus, who was trained by Ed Seykota (all trend following traders). You get the picture. Hendry honestly states that he doesn't know what's going to happen, but he puts himself in the position to have probabilistic bets that can profit when the market moves--in whatever direction. Covel moves on to quote David Einhorn, a hedge fund manager. What will the Fed do if the bubble bursts when interest rates are at zero? Is Covel, in quoting Einhorn, trying to predict the future by talking about this subject? He's simply mapping out what he sees: A world that's rigged and manipulated, and a Federal Reserve that's trying to make its buddies at the big banks wealthy. In the midst of this how can you protect yourself and profit? The only way you can truly protect yourself is by looking at the price in the here and now from a trend following perspective. You can make decisions based on the price movement without having any idea what the Fed is doing behind the curtain. There is no certainty. There's only chaos, uncertainty, fractures, and cracks in the sidewalk. You have to have a plan before that fracture breaks. Although traders like Einhorn, Hendry, and John Hussman might not be trend following traders themselves, their observations certainly make the case for employing a trend following strategy. Special Offer? Free trend following DVD: www.trendfollowing.com/win.

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