Join 10,000+ savvy traders that get Michael's exclusive insights & podcast episodes.

as seen on:

Bubbles, Rationality and Trend Following

Human nature isn’t rational. It blows bubbles and then pops bubbles—and we can see this going back hundreds of years seen across calamities that we have all heard about:

• Dutch Tulip Mania (1634-1637)
• The South Sea Bubble (1716-1720)
• The Mississippi Bubble (1716-1720)
• The British Railway Mania Bubble (1840s)
• The Panic of 1857
• The Florida Real Estate Bubble of the 1920s
• The Stock Market Crash of 1929
• The 1973–74 Stock Market Crash
• Black Monday – the Stock Market Crash of 1987
• Japan’s Bubble Economy and Crash 1989-current
• Dot Com Bubble (1999-2002)
• United States Bear Market (2007-2009)
• Flash Crash (2010)
• Chinese stock market crash (2015-16)
• Brexit (2016)

And on and on…

But it’s beyond simply not rational. Those events, the human action driving those booms and busts, are best described by academia’s Prospect theory, cognitive dissonance, the bandwagon effect, loss aversion and assorted heuristics in judgment and decision-making—to name a few of the hundreds of biases inherent in our lizard brains.


Posted in Trend Following
Free Market Wizard Video!

Receive FREE expert trader video now!

Covel Books & Film
Massive Performance

Trend following performance numbers.

Trend Trading Systems

Pricing for trend following systems. 1000s of clients across 70+ countries.

Live Trend Following

Michael Covel's live events.

Trend Following Podcast

Michael Covel's podcast. 3M+ listens; 400+ episodes: iTunes & Android.


Free Market Wizard Video!

Receive FREE expert trader video now!

Online Payments


Regular guy makes Trend Following fortune. His free video lesson: Watch It Now.