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“All about price but no one seems to want to listen…”

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Couldn’t help but pass this along. These monster hedge funds trading fundamentals just don’t seem to get it. My own firm which has access to tons of fundamental information in the grain markets is struggling right now as well because the market is just not responding to the intel.

All about price but no one seems to want to listen.

Best,
[Name]

Great article. A straightforward reminder.

“Thanks for the invaluable content you put out there…”

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Hi Michael,

First off, thanks for the invaluable content you put out there. I got your email from your podcast. I’m not sure if you read these emails or have an automated response for all the people that email you. So in case you do, here it goes;

I’m in my mid 20’s living in San Diego and will be transferring to finish my degree in Economics/Finance at a top 30 school this fall. I’ve had no family support and will rely on savings (been working full time to go to school) and some student loans. I have educated myself about the basics in value investing and other investment strategies for the last couple years but I wanted to trade. So I got into technical analysis and started position trading with about $5,000, holding about 3 trades at a time for several months and using stop losses, making money and losing money on small and mid caps in tech, retail and energy, using sentiment and moving averages. So I reverted to value investing and read some more before gambling away more money, until I came across your works.

I am not risk averse, but don’t have the stomach for draw-downs of more than 50%, plus I am a curious individual and like to be involved, hence why trend following sounds more appealing to me. I could have a value and momentum combined portfolio, but sounds like the average yearly return (back tested until 1967) is an alpha of 16% with beta of 18%. I am not expecting to become rich overnight (although that should be every capitalist’s goal) but to make enough to a decent income and enough time to focus on finishing school and learn more and more about the markets.

I understand this takes time and education and in fact have been digesting a lot of books and have be wondering what your take is if you were in my shoes.

Thank you for all you do,
[Name]

Some starting points here and here.

Ep. 539: Susan Peirce Thompson Interview with Michael Covel

Susan Peirce Thompson
Susan Peirce Thompson

Subscribe to Trend Following Radio on iTunes

Susan Peirce Thompson is author of “Bright Line Eating.” This is a podcast all about “aha” moments. Most have no understanding of how their bodies take in, and absorb food. Susan’s BHAG (big hairy audacious goal) is to make sure that all those who want to put forth the effort of losing weight and keeping it off have a road map.

Susan had trouble losing weight starting at age 12. She found early on that the only thing that worked for her was using drugs, specifically crystal meth. During her 20’s she was able to get off the hard drugs, but then became addicted to nicotine, sex, flour, and sugar. The turning point for her was when she decided to do a bikini body 12 week challenge with her husband. They were suppose to work out 6 days a week and eat 6 times a day. Her husband did great on the program, Susan did not. She wasn’t able to keep with the eating schedule.

She ended up running into an old friend that told her about a different way of eating. Her friend gave her the cliff notes version of a no flour or sugar diet—combined with weighing your food. Susan ended up quitting the bikini challenge and started down this new path of eating. She began losing weight instantly. This lead to her going back and reverse engineering why the program worked. She started Bright line eating in 2014 and started doing a scientific study on the results of the participants.

80% of food sold in the super market has added sugar. 60% of one year olds are fed sugar every day. Susan explains why it is so hard to have the brain let go of the need for sugar. The dopamine release in sugar is the same type of dopamine release that occurs when using drugs or having sex. Doughnuts and pornography give a dopamine release that is larger than the body is trained for. What happens over time is your need for stimulation rises. There is a need to keep it sustained.

What is the solution? You need to automate your eating just like brushing your teeth is automated. There is no impulse control, just automatic. There needs to be no choosing involved. 80% execution of this program is so much harder than going 100% all in. It’s a system.

In this episode of Trend Following Radio:

  • BHAG
  • Sugar is an addiction
  • How to handle withdrawal from sugar
  • Drinking calories vs. eating calories
  • The radish study
  • Willpower is a finite resource
  • Regulating task performance

“Hunger is not satisfied by eating.” – Susan Peirce Thompson

Mentions & Resources:

Want a FREE Trend Following Video? Get it here.

Trading Food for Thought: March 23rd Edition

Ep. 538: Global Opportunity with Michael Covel on Trend Following Radio

Subscribe to Trend Following Radio on iTunes

The vast majority of the investing population only know their own country’s stock index inside their portfolio. Top investors know much more than that. They think about gold, palladium, the Swiss franc, the Japanese yen, silver, copper, bonds, wheat, etc. Most would never think of trading these markets, however these markets are part of the trend following world. Any everyone can trade any market through a handful of different financial instruments such as ETF’s, LEAPS, and futures. The fundamentals of these markets are irrelevant for profit. The only information needed to trade any market for profit is price. This type of thinking opens markets up to anyone and everyone willing to play the game and take advantage of the global opportunity trend following provides.

In this episode of Trend Following Radio:

  • Price action
  • Momentum
  • Macro hedge fund
  • Trade everything
  • Ignoring the fundamentals

“All price action is, is human behavior manifested in the number. That’s it.” – Michael Covel

Want a FREE Trend Following Video? Get it here.

Should You Jump or Not? Some Good Thinking

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Hey Mike:

I’ve been trading on and off for about 20 years but I finally have created a fully back tested system that I’m really happy with. I’m thinking of becoming a full-time trader and quitting my job to be fully focused on getting consistently competent. As my system only works on daily price I only really need about 30 minutes a day to execute my scan and trade. I’m thinking of getting a part-time but I’m worried that this will take from my focus. Before I had my current job for the past year I was self employed in retail and hospitality for 15 years so I have an understanding of being an entrepreneur however I feel that having these businesses and trading at the same time is the reason I haven’t been able to get it right.

Would love your thoughts.

Cheers
[Name]

Asking if you should jump or not?

Read:

Or this by me:

Enjoy!

The Incredible True Story of the Real Life ’Trading Places’

Recently, I joined Bloomberg’s Joe Weisenthal and Tracy Alloway on thier podcast, Odd Lots, to talk about Trading Places and the Turtles:

If you have any interest at all in finance, then it’s mandatory to have seen the 1983 movie “Trading Places.” You remember, right? Two wealthy Philadelphia commodity brokers bet on whether anyone, even down-and-out Eddie Murphy, can be trained to become a successful trader. What you might not realize is that something very similar happened in real life. In this week’s Odd Lots, we examine the amazing tale of the Turtle Traders. In 1983, successful commodities speculator Richard Dennis took out a full-page ad looking for novices to train in the art of trading. His novices — who did spectacularly well — studied for just a few weeks and were dubbed his “Turtles.” Joining us to tell the story is Michael Covel, who wrote a book on the Turtles, and Jerry Parker, a former Turtle who still trades using the same technique today.

Check it out here.