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Ep. 402: Charles Faulkner on Goals; Special Episode

Charles Faulkner

Charles Faulkner

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On today’s episode of Trend Following Radio Michael Covel features a presentation by Charles Faulkner. Charles is a trader, mentor and author who has been featured in Jack Schwager’s “Market Wizards” series. Faulkner is an international expert on modeling the knowledge and performance of exceptional individuals, teams and organizations, and applying the latest research in cognitive neuro-science and linguistics. He has appeared on this podcast five times and has received more positive feedback than any other guest.

Today, Charles’ message is about goals. It is about setting large goals that are above and beyond your everyday concerns. Goals that give your life purpose. Charles comes at this topic in a pragmatic and scientific way. He breaks down how our brains function best, making goals easier to obtain. The first example he gives is a “monkey see, monkey do” experiment. The experiment showed that when you do something repetitively in the correct form, you have a much higher success rate than if you were to be sitting in the stands watching or doing a variety of the same act, but only occasionally doing it right. Charles then moves onto a study centered on the idea of taking internal dialogue and externalizing it. When you write down a goal and draw out what that goal means to you, that is externalizing your inner-dialogue. In addition to writing out your goals, it is important to talk them out. Charles has his students ask each other: “What are you going to do to achieve your goals?” “What will you see, what will you feel?” “Where will you be and who will be there?” Asking these questions vivify your goal. On the flip side, it is important to ask about the downsides. The more important the goal, the more negatives it’s likely to have.

“Goals are a way of directing your attention” says Charles. He goes on, “You don’t set one big goal, you set interim goals so you get rewarded along the way.” Charles goes on to talk about the importance of having milestones so you don’t get discouraged when your goal is not met immediately. People become attached to a certain outcome but they don’t think about why that outcome is important. He asks the question, “What is important about making a million dollars?” When you break down the reasoning behind your goal, it may uncover layers you had never thought about.

In this episode of Trend Following Radio:

  • How to set goals
  • How to achieve your goals
  • Externalizing your inner-dialogue
  • The importance of milestones

“We are very good at looking back on things and seeing how we got somewhere, it’s the looking forward thing that throws us off from time to time.” – Charles Faulkner

Mentions & Resources:

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Posted in Interviews, Podcasts, Psychology, Trading 101, Trend Following

Market Propaganda Is a Daily Truth

Michael Covel

Michael Covel

Consider an excerpt from Trend Commandments:

During production, my documentary film arranged for an interview with CNBC’s Maria Bartiromo. The interview was approved for months. Other interviews for the film included two Nobel Prize winners, and several legendary hedge fund managers. Bartiromo canceled minutes before her interview. She left a voicemail message:

“I probably should not have said yes to it without having this stuff go through my, uhhh, PR people. I’m sorry about that, but, ah, given what’s gone on and all the criticism of analysts and the, you know, the Dot-com boom and bust I…I can’t, um, I…I don’t want to really do this open ended without really knowing more details.”

Bartiromo is a media professional who has interviewed world leaders and top financial experts for more than a decade. However, almost eight years after the Dot-com bubble, Bartiromo was using it as a reason to not go on the record about the role media plays on Wall Street. That voicemail confirmed my experiences at CNBC earlier in the year. When they walk off the set, it is just that—a set.

One reader was not happy with my revelations: “You make accusations without any proof or examples. You are media and just as guilty as those you accuse. This is a hatchet piece without merit. You apparently have an audience that hates America, CNBC, and Maria. Glad I don’t have to live in your [—-]hole.”

It all comes down to propaganda and the battle against it. Anyone familiar with the inner workings of a Tupperware party knows all about the power of influence, and how very well it works.

Most info-Web-media-newspaper types don’t believe that great trend trading knowledge and wisdom are found by removing junk from people’s heads.12 Removing junk is just as much a part of my calling as explaining the concepts and rules of systematic trend following trading.

Now consider some feedback on CNBC, ESPN and the media as a whole:


Hope you get a chance to watch some of this Republican Debate on CNBC. The candidates are ripping the CNBC moderators for their biased and ugly questions. Goes right in line with what you talk about on your podcasts about CNBC and how they create conflict and hype for ratings purposes. Over the years, I’ve never felt right when I watched CNBC. After hearing some of your podcasts, it now makes sense to me why I felt that way.

Same analogy for me with ESPN in my industry. As a professional sports handicapper for the past 20 years, it has always amazed me how recreational amateurs rely so heavily on ESPN, while I get very little useful info from that network. I rely on stats and numbers and proven systems and methods to handicap. Not public information on ESPN that is already priced into the betting lines. Amazing how similar financial markets and sports betting markets (and industries) are to each other. Keep up the great work. I’m enjoying your Flagship course and the weekly podcasts.



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Posted in Holy Grails, Multimedia, Trading 101, Trend Following

Ep 401: Ben Carlson Interview with Michael Covel on Trend Following Radio

Ben Carlson

Ben Carlson

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On today’s episode of Trend Following Radio Michael Covel interviews Ben Carlson. Ben is the Director of Institutional Asset Management at Ritholtz Wealth Management. He first gained fame with his blog, “A Wealth of Common Sense.” Following his blog success Ben wrote the book, “A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan.”

“A Wealth of Common Sense” is geared toward helping investors gain a simpler decision making process and developing a clearer way of thinking. This is where Michael and Ben take the conversation on today’s podcast. Ben says that people usually become their worst enemy while trading. Cycle to cycle or fad-to-fad is how so many plan their investing rather than building their trading off a solid foundation. Studying the emotional side of trading is a relatively new concept that has sprung up in the last couple decades, which causes people to overlook the necessity of its study in their trading. Ben says, “Envy is the worst of all sins because nobody enjoys doing it.” People are constantly tempted to follow what others do. With the amount of information and “noise” thrown around today we are more informed than ever but most aren’t putting that information in the right context.

Ben uses the documentary, “Jiro Dreams of Sushi” as a great example of having faith in a system matched with an extraordinary amount of discipline. There is nothing fancy about Jiro and his sushi. It is his discipline over the years to perfect his craft that has made him arguably the best sushi chef in the world. Whether it is creating the perfect meal or creating the perfect system, you have to give it time to work. Ben says that discipline is just not there for most people. Constantly asking, “Does this still work? Why should I continue to follow it?” Lastly Mike brings up the phrase “Market timing.” On a daily basis there is someone on T.V. predicting what will happen. The two talk about lack of understanding among investors, relating investment advisors as shrinks to their clients. They are not managers of money but managers of people.

In this episode of Trend Following Radio:

  • Diversification
  • The purpose of a long only commodities investment
  • Speculation
  • Index funds
  • Having a plan
  • Risk and Reward
  • Saying no

“You can’t invest in the market as you wish it would be, you have to invest in it as it is.” – Ben Carlson

Mentions & Resources:

Want a FREE Trend Following DVD? Get it here.

Get the foundation to making money in up, down and *surprise markets on the Trend Following mailing list.

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Posted in Interviews, Multimedia, Podcasts, Psychology, Trading 101, Trend Following

The Australian Financial Review: David Harding

david harding

David Harding is one of the most successful trend followers alive. I have had the opportunity to meet with him several times. An excerpt from The Little Book of Trading:

Who doesn’t want to make a billion dollars? Yes, I imagine there are downsides to that type of wealth, but it must be one helluva ride to produce that kind of success— especially from essentially nothing. Is it a reasonable goal for you to make a billion dollars? Well, the odds are probably not on your side for that.

However, sometimes in this world, this crazy and often chaotic world of ours, people win the lottery. They buy a scratch-off ticket and win millions. They didn’t practice. They didn’t struggle. They didn’t do anything except buy a scratch-off ticket.

On the other side are people like David Harding. Harding struggled mightily early. However, Harding stuck with it for decades and is now a true billionaire. Don’t get me wrong—Harding, like many success stories, has had luck on his side.

However, that’s not the takeaway here. The takeaway is perseverance. The takeaway is not quitting. That’s how Harding really hit it big. Without perseverance, Harding would have had no chance for luck to shine through.

What can you do? You can learn to think like a trader who has made a billion dollars. And if you think like him, and if you model how a trader like that views the world, you can put yourself in a place to possibly make your billion. Note, I said possibly. The real reason, the honest reason to think like a billionaire, is to make your first million. Anyone with guts and determination can figure a way to make their first million, but you have to stick with the ups and downs. Known as the commodities king (primarily because the press always talk about some of the markets trend followers trade as opposed to their strategy), London’s Harding could be called an overnight trading sensation— only 30 years in the making.

His trend following trading has produced, on average, nearly 20 percent a year for 20 years. Let that digest for a second as you ponder the buy and hold investments in mutual funds you may have, slowing eating away at your capital and your sanity.

These days, the white-haired financial wizard (still under 50) enjoys collecting books on economic history, some dating back to the 1860s. In my time with him, he carried that distinct American entrepreneurial spirit center stage, along with a salty tongue of randy one-liners, all wrapped in a quintessential British flair.

Feedback from a listener who spotted David Harding in the news recently:

Hi Michael,

I hope you are well. Great work with the podcast. I thought I’d let you know that David Harding made front page news of the Australian Financial Review (23 November 2015).

Not too sure whether you can access the above given online version is subscription based. I’ve attached a PDF of the article for your reference. Looking forward to the next time David Harding makes an appearance on your show.



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Posted in Feedback, Trend Following

Trading Food for Thought: September 24 Edition

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Posted in Economics, Psychology, Trading 101, Trend Following

Ep. 400: Special Tom Basso Compilation Episode with Michael Covel

Tom Basso

Tom Basso

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Today marks 400 episodes on Trend Following radio. To celebrate Michael has put together a compilation of Tom Basso interviews. Tom has been on Trend Following Radio four times and his interviews have been among the most popular episodes airing on the show. Michael plays the interviews back to back and throws in a bonus interview at the beginning. The bonus excerpt is a Tom Basso presentation from the early to mid 1990s.

Tom Basso is most famously known as “Mr. Serenity” in Jack Schwager’s “The New Market Wizards”. Now retired from managing client money, Tom was president and founder of Trendstat Capital Management. He became a registered investment advisor in 1980, a registered commodities advisor in 1984, and was elected to the board of the National Futures Association in 1998.

Throughout this 4 1/2 hour podcast Michael and Tom cover a broad range of topics including: Tom’s background and how he got into trading, speculation, emotional rushes, emotional devastation, catastrophic events, separating trading from politics, behavioral economics, advice to newcomers entering the CTA industry, location independence, time management, stoicism, black swans, and the importance of routine.

Michael and Tom also go through listener questions spanning topics including: trading regrets, money management vs. trading, tinkering with current systems, drawdowns, one-system vs. multiple systems, thoughts on Alan Watts, emotions during both losing and winning periods, exit strategies, practice trading vs. live trading, money management, risk control, how to handle skeptics, serenity, John W. Henry, coin flip entry method, percent betting, comfort with uncertainty, initial capital at risk vs. unrealized gains, and fighting against your gut reaction. This podcast includes a wealth of knowledge worth listening to over and over again.

In this episode of Trend Following Radio:

  • Speculation
  • Fighting against emotions
  • Catastrophic events
  • Separating trading from politics
  • Advice to newcomers entering the CTA industry
  • Time Management
  • The importance of routine
  • Money management vs. Trading

“I realized that every time I had a loss, I needed to learn something from the experience and view the loss as tuition at the College of Trading. As long as you learn something from a loss, it’s not really a loss.” – Tom Basso

Mentions & Resources:

Want a FREE Trend Following DVD? Get it here.

Get the foundation to making money in up, down and *surprise markets on the Trend Following mailing list.

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Posted in Interviews, Multimedia, Podcasts, Trading 101, Trend Following

Trend Following Means Trade from Anywhere

Location independence is a huge upside to being a trader, particularly a trend follower. An excerpt from The Little Book of Trading:

Years ago I interviewed for a trading job at Saloman Brothers in New York City. That was in 1994 and the firm was still very powerful. I still can recall seeing their massive football field–size trading floor at the top of World Trade Center Seven, which was lost on 9/11. At the time, long before I ever knew about trend following, that seemed to be the only way you could get rich trading.

Kevin Bruce is living proof that there is no need to be in New York, London, or Chicago—flaunting a sharp business suit and trading in a sky rise. Bruce is a small-town guy from Georgia with no ancestral connection to Wall Street, who has not only made it on Wall Street but conquered it. Heed his path.

Bruce spends his time far away tucked in quiet spots in Richmond, Virginia. He works out six times a week at his local YMCA, and still drives his 1996 Ford pickup. With a net worth of nearly $100 million, he prefers to live life just as he always did before making that fortune. He is low profile. Most people have no idea of his wealth. He says, “I guess that means I’ve done a pretty good job of just being me.”

Now some feedback from a listener with a different motivation for location independence:

Hello Michael,

Just a quick email to say that I enjoy listening to your podcast. I have read lots of interesting books that I would probably never have come across had I not heard the author interviewed on your podcast. I should have already gone on iTunes and left you a review already as you request from your listeners. I will do that over this weekend.

It sometimes sounds like you are wondering on there about whether the audience will embrace it when you interview guests not directly related to trend following trading methods. But I think it is a positive thing when you have these types of guests. It mixes up the content and prevents all the interviews from being too similar. I particularly like the ones who talk about trading psychology, as opposed to methodology.

On another note, can you tell me what it is like being a single man living in Saigon as far as opportunities with the ladies goes? I am an Australian in my my mid 30’s, I trade for a living and have been living in Prague for 7 years because of the cheap cost of living, ease of dodging the tax man here and good looking girls. But I am thinking of basing myself in Asia next year instead. New horizons, more fun, closer to family in Australia etc. I have been to most Asian countries in my travels but not Vietnam. Do you recommend it for a single man?

I will answer this email on a future podcast!

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Posted in Entrepreneurship, Feedback
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