Ep. 526: I Will Survive with Michael Covel on Trend Following

Munger and Buffett
Munger and Buffett

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Charlie Munger and Warren Buffett are two men that not only have survived over time but made a boat load of money in the process. They are not trend following traders, yet they are very keen about risk management, position sizing and other core concepts that lead to success. Munger and Buffet, however, perform a type of strategy that you (as the average investor) cannot. They trade massive derivative positions. Trades that only happen when you’re at their level and can coordinate with the like Goldman Sachs. Buffett held the power in 2008. He had the money and called the shots. Across the media you can find hypocrisy in his statements, but the ultimate measuring stick is money. Has he made money? Has he made it generally in an ethically way? Absolutely.

This podcast and these excerpts aren’t about strategy. It is about getting into the mindset of Munger and Buffett. Even though we cannot replicate their strategy, we can take their philosophical views and apply them to our money making strategies.

In this episode of Trend Following Radio:

  • Psychological denial
  • Incentive cause bias
  • Pavlovian phenomenon
  • Negative psychological tendencies
  • Efficient market theory
  • Contrast phenomena
  • Envy bias
  • What distorts judgment
  • Tupperware parties
  • Watch one, do one, teach one
  • Compounding
  • Avoiding credit cards at all costs

“The biggest financial asset that you have going for you by miles is the value of your own earning power over the years.” – Warren Buffett

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