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Ed Seykota Trend Following Wisdom

Some perspective from Ed Seykota taken from “Trend Following”:


The following story passed along from an associate is “pure Seykota”:

“I attended a day-long seminar in February 1995 in Toronto, Canada where Seykota was one of the guest speakers. The WHOLE audience peppered Seykota with questions like: Do you like gold, where do you think the Canadian $ is headed, how do you know when there is a top, how do you know when the trend is up etc.? To each of these, he replied: ‘I like gold—it’s shiny, pretty—makes nice jewelry’ or ‘I have no idea where the Canadian dollar is headed or the trend is up when price is moving up, etc.’ His replies were simple, straight-forward answers to the questions asked of him. Later, I learned through the event organizer that a large majority of the audience (who paid good money, presumably to learn the ‘secrets’ of trading from a market wizard) were not impressed. Many felt they had wasted their time and money listening to Seykota. Seykota’s message couldn’t be clearer to anyone who cared to listen. The answers were found in the very questions each person asked. Don’t ask, ‘How do you know the trend is moving up?’ Instead, ask, ‘What is going to tell me the trend is up?’ Not, ‘What do you think of gold?’ Instead, ask, ‘Am I correctly trading gold?’ Seykota’s answers effectively placed everyone in front of a huge mirror, reflecting their trading self back at them. If you don’t even know the question to ask about trading, much less the answers, get out of the business and spend your life doing something you enjoy.”

How would you have reacted to Seykota’s speech? Walk out or be curious? Think about it.

Feedback in:

I wanted to reach out and thank you for the books you have written. I will admit I’ve read them all from obtaining them through the library system, but I now believe I will buy them as resources to reference. The “Trend Following” philosophy clicked immediately with me and listening to your podcast has really enlightened my mind considering I’ve been typically listening to Motley Fool for my job as a Financial Analyst. In a short period of time I feel I can see through the garbage that is filling those podcasts. I still listen to keep up with my CFO, but feel as if I’m a lone wolf at work with a strategy that none of them could ever understand. Within weeks of reading on Ed Seykota I have already programmed an entire Google Doc to automate my buy/sell/risk/data pull just by typing a ticker for what I want to trade. Kudos to you for following this path and providing the knowledge to us for consumption. I hope to continue to follow your path as you continue. If you are ever in Colorado feel free to check-in with me and see whether I’ve hit life changing levels yet.

Thanks again,
[Name]

Thanks!

Ed Seykota Larry Hite

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Posted in Feedback, Psychology, Trend Following
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