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Ep. 364: Simplicity Trumps Complexity with Michael Covel on Trend Following Radio

Michael Covel

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An article recently appeared in Forbes, entitled “What Jurassic World Can Teach Investors About The Stock Market”. In it is an interview with Ben Carlson on why simplicity trumps complexity when it comes to investment strategies. Although not explicitly about trend following, the article brings up points about the poor historical performance of financially engineered assets and the superiority of simple systems.

In this monologue, Michael Covel talks about his desire to seek the truth, and the importance of taking personal responsibility for your actions. He also breaks apart the Forbes article on simplicity vs. complexity, and the logical reasons why trend following systems have historically performed better than others.

Also in this episode: the recent study that shows that metal-heads from the 80s are happier and better adapted than their peers.

In this episode of Trend Following Radio:

  • Why simple strategies are better than complex ones
  • The importance of defining your risk as a number
  • How risk and reward are two sides of the same coin
  • Why going for the average is a losing strategy
  • The difference between hiring a financial advisor and an trader

“Financially-engineered assets often fail to perform as their creators intended. Or they are ill-equipped to deal with unanticipated events.” – Ky Trand Ho (Forbes)

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Posted in Podcasts, Psychology, Statistical Thinking, Trend Following
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