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Trading Food for Thought: June 13th Edition

Food for thought:

Enjoy.

Ep. 562: The Singer Perspective with Michael Covel on Trend Following Radio

Paul Singer
Paul Singer

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Paul Singer is described as one of the smartest money managers. He has a 2.2B net worth. His perspective on trading mirrors trend following even though he is not a stated trend trader. Listen and learn.

In this episode of Trend Following Radio:

  • Doom and gloomers
  • Macro economic perspective
  • Trump’s impact on the markets
  • Timing markets
  • The moment of right now

Mentions & Resources:

Want a FREE Trend Following Video? Get it here.

“I am writing to you to say, YES! Someone can be taught from zero experience…”

Feedback in:

Hi Michael,

I came across your work around 3-4 months ago, I don’t remember how but I’m glad I did. I’ve gone back and listened to many of your podcasts and in one of them you spoke about the ability or wondered if someone could be taught to become a Trend Follower with no market experience.

I don’t remember it exactly, however I felt it described me perfectly. For the last 2.5 years I have worked in Foreign Exchange as an Account Manager in Australia. A person who already worked their took me under their wing and has taught me about trading over the past 18 months. He has been a trader for 17 years and trades Currencies, Stocks (Options), Commodities and uses the same strategy regardless of the instrument.

At the time I did not know, however they are a trend follower so from day 1, that’s what I have also been taught…. and when I look at things now I don’t understand why everyone isn’t a trend follower (music to your ears) as it makes 100% complete sense to me.

I guess I am writing to you to say, YES! Someone can be taught from zero experience in the financial markets to become and be taught to be a trend follower. The firs thing my mentor told me to do was read Jesse Livermore’s books which I have done. Over the past 18 months, I have read those books, found new mentors (yourself included) joined Twitter to follow you guys and paper traded for 12 months.

I’m not a rash, spur of the moment guy, and I think that’s why Trend Following appeals to me, I’ve read and listened to many many people considered to be successful traders in this area and really taken my time to understand and learn about the markets and more importantly how to be a successful trader/trend follower.

I just wanted to reach out and say YES, from an absolute novice with no experience you can be taught to be a trend follower, and I think it’s the only way to trade! Your book has been ordered from Amazon (New Version) along with TurtleTrader, Market Wizards and Trading in the Zone to accompany my 3 Livermore books and my wall of mentors:

Jesse Livermore
Michael Brown (work colleague)
Michael Covel
LMT978 – Larry
Stephen Burns
Rayner Teo

A few others, however I’ve come across these guys from your site and interviews (thank you).

I look forward to becoming an extremely successful trader and one day would love to be interviewed for you audience as a very successful trader that no-one had heard of!

[Name]

Thanks for the nice words!

Ep. 561: Jeff Goins Interview with Michael Covel on Trend Following Radio

Jeff Goins
Jeff Goins

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Jeff Goins is author of “Real Artists Don’t Starve: Timeless Strategies for Thriving in the New Creative Age.” Jeff dismantles the myth that being creative is a hindrance to success and reveals how an artistic temperament is an advantage in the competitive marketplace. Mindset, technique and understanding the right perspective is key, and Jeff helps get you there.

We all know there are staving artists in the world. We have told ourselves long enough that artists need to be struggling – that’s a myth. You can be creative and make money. Jeff uses an example of Michelangelo and how he was actually wealthy to the tune of about 47 million dollars. If the renaissance’s greatest artist was one of the wealthiest artists, then what does that tell us about today?

How did Jeff go down the path he is on now? Jeff is a big fan of apprenticeship and has always had the mindset that life is a classroom. Apprenticeship and observing how other successful artists have made a living is how you get started. Many find success by essentially stealing ideas from others and arranging it in a new, interesting and better way. Apple and Microsoft or McDonalds and In n Out are great examples of stealing from everyone around them and doing better. Look at your peers, the people in your industry and just do it better. Be persistent.

Another way to become a thriving artist is to own as much of your art as you can for as long as possible. Jay Z and Dr. Dre are two examples of this. You don’t let the label and manager take over you. Dre realized he didn’t want or need a manager, label, or partner in his company. It took him some time and going through a few learning experiences but he eventually established his own label on his own terms. Michael and Jeff end with a story about Disney and Pixar showing listeners that selling your art too soon can leave a lot of money on the table.

In this episode of Trend Following Radio:

  • Apprenticeship
  • What is your life’s work
  • Being an artist in today’s world
  • Owning the title that you want for yourself
  • You are what you say you are

“The starving artist strives to be original. The thriving artist steals from his influences.” – Jeff Goins

Mentions & Resources:

Want a FREE Trend Following Video? Get it here.

“The trend… can be a friend, but you have to choose your friends wisely!”

Feedback in:

Hello Michael,

Thank you for all the work you have done. I truely appreciate your books. I suppose I have always been a closet Trendi… but strongly influenced by technicals such as head and shoulders, double tops etc. Unfortunately I could rarely operate in name as a Trendi!

Why?

I was an international fund manager for 21 years and handled up to $10 billion dollars in one Fund I worked for 3 major pension funds… sold out $10 billion of stock in 6 international markets in 1987… 2 weeks before the crash and had a 47% return that year… Why? Because the US market had a clear double top and it was a market which just about played every extreme. Later in 1992 I went into stockbroking. Now again a closet Trendi… Why in my two careers was I a closet Trendi?

A) In Fund management … big reports of bullshit figures for a boards consumption (yes, they still want and believe in it) and you give them what they truly believe!!!! And in Stock Broking… you speak the numbers… and then of course better and better numbers in other shares. Numbers to generate movement and commission. You are keeping the ball in the air. Hard to be a Trendi but under “other reasons” clients got taken out at the end of a positive trend. Sometimes only on strong persuasion were they persuaded to go… but good things stay good too long and every client can’t sell. Well 99% can’t sell and they loose unless the broker berates them. I have heard a million reasons why clients don’t want to sell and they are all greed or plainly a form of “hypnotic trance.” Like a kangaroo in a cars head lights they get paralyzed and can’t run!!! So I call this inability to sell “The Kangaroo Effect” “It’s the smart Trendi’s winning edge”… he’s out and the crowd continue and continue to be mesmerized by the light! So today I run my own money and for the record I am a total Trendi.

I have learned a lot from Gann and many other writers on “the trend”. Yes I have started reading all your books to gain a greater and greater insight… all good stuff… they are piled up beside me. And I enjoyed your movie, especially the winning strategy of successful poker players. A great insight and just the movement of the sheep, crowd Psychology, it was a terrific movie. Can you suggest any more good books to read?

I have my own system and so far so good, but if I can get a better stop out process and entry process then I will adopt it … so I keep reading and I keep learning to improve my game. I don’t know whether I am a natural, time will tell. But in two years I have turned $50,000 into $1.7 million. Many questions in my mind remain unanswered.

Why did the smartest Trendi, Jessie Livermore, loose it after getting it so right? How much of a Trendi was Bernie Baruch? Is Warren Buffett really a closet Trendi?

Why do so many Fund Managers average down but rarely average up and why do so few fund managers ever cut their loosing positions (my own belief is the ego is too big to admit a mistake)? Yes it’s always just a bad market! Much easier to sell a bad market to the directors rather than admit a mistake and get kicked out pronto… After all, directors can only do one thing with people who make consistent mistakes… even if they are very good and consistently out perform the index!!! It’s like Eric Barker says in “Barking up the wrong tree”. Good people who follow the systems that prevail are trusted even though the Philosophy is wrong. So smart people know they can only operate the correct philosophy to win under disguise!!! Could successful people all be outliers, just closeting themselves and appearing to be true company men? I know I did it because people love stories and any story can be designed to fit success! I am glad I finally can do it all my way and can stick to my knitting… The trend in the end, can be a friend, but you have to choose your friends wisely!

Your strong supporter.
[Name]

Thanks!

“I want to go down this rabbit hole…”

Feedback in:

Great podcast with Denise Shull! Reminded me to continue reading Market Mind Games that I had begun a year or so ago! Wonderful material and you hit on key issue of whether it is technique that needs honing vs going deeper into ones psyche and naming all the intricate feelings that are part of recurring patterns that manifest in trading decisions… I want to go down this rabbit hole but not sure how best to do it… I am sure Denise charges a lot for her consulting and coaching but will start with the book. Hope you are well!

[Name]

Thanks!