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michael covel in barrons

Mike Hogan writes in Barrons ‘Making the Trend Your Friend‘:

BUY-AND-HOLD INVESTING is a loser, says Michael Covel, founder of Trend Following, one of several Websites devoted to the trading strategy of the same name. “How many more decades can you go with negative returns?” he asks, referring to the disappointing aughts (www.trendfollowing.com). The unofficial chronicler of the 25-year-old active investing strategy, Covel claims that leading practitioners of trend following, like Boston Red Sox owner John William Henry, have collectively logged a 17.56% average annual return since 1984 compared with 7.37% for the Standard & Poor’s 500. Trend following is grounded in the notion that a stock or sector in motion tends to stay in motion—until it stops. “Markets that break out are more likely to continue than to reverse direction,” maintains Covel. It’s equally applicable to short and long trades and to any class of asset—stocks, futures, currencies—with typical holding periods of a few weeks. Trend following is similar to momentum investing, except that devotees studiously avoid using company fundamentals like revenue growth or positive earnings surprises as trade signals. The focus is entirely on price movement—although trend followers aren’t that enamored of charting or technical analysis, either. When a trend starts, most technical indicators turn in the same direction, says Covel. THE KEY DIFFERENCE between trend following and most investment strategies is the lack of crystal-ball gazing. Trend followers make no attempt to forecast a trend’s duration, magnitude or key inflection points. Entry and exit triggers are decided at entry, and trend followers often arrive late to the party. Its “buy high, sell higher” orientation smacks of the bigger-foolism that has tripped up so many investors, large and small. But trend followers don’t blindly chase bubbles. Their systems try to take the emotion out of investing through rules-based decisions, back-testing of trade theses and strict risk management. A portfolio is usually spread across a dozen or more (hopefully) noncorrelated assets with tight trailing stops, which can be 2% or less below entry price. That means a high percentage of holdings can get stopped out in the search for a few home runs. Investors need a pre-defined fund allocation strategy that can withstand a losing streak. “As many as 60% of initial bets will be wrong,” says Covel, “The biggest impediment to success is fear of failure.” Covel operates several sites that explain the strategy, including michaelcovel.com and turtletrader.com. They are supported by the sale of books, CD-ROMs and seminars, but also offer considerable free content (www.trendfollowing.com/resources.html).

Michael Covel Press

  • Nordic Business Media AB/Hedgefonder: Aug 11
  • Pragmatic Capitalism: Aug 11
  • Barrons: Nov 10
  • DailyFinance/AOL: May 10
  • Barrons: Sep 09
  • The Wall Street Journal: Apr 09
  • New York Post: Nov 08
  • Globe and Mail (Canada): Apr 07
  • Orange County Business Journal: Mar 07
  • Best Life Magazine: Feb 07
  • Trader’s Magazin Interview (German): 2006. English (PDF): 2006
  • Barrons Interview: 2000
  • Forbes Review: 2000

The Complete TurtleTrader Book Reviews

  • The Hindu (review): Apr 08
  • Michael Nystrom (review): Mar 08
  • SFO Magazine Top 10 Books of 2007: Dec 07
  • Trader Monthly Article: Dec 07
  • Deraktionaer.de Interview (German): Dec 07
  • Bloomberg: Nov 07
  • Brett Steenbarger Review : Oct 07
  • Market Technicians Association: Oct 07
  • SFO Magazine Review: Sep 07
  • Bill Miller (Legg Mason) Review: Jul 08
  • Mark Lamendola Review: 2008

Trend Following Book Reviews

Michael Covel Film Press

Magazine Covers

  • Your Trading Edge: Nov/Dec 09
  • Traders’ Magazine Cover (German PDF and English PDF): 2006
  • Futures Japan Magazine Cover: 2005
  • Technical Analysis of Stocks and Commodities Cover: 2005
  • The Traders Journal Magazine (Singapore) Cover: 2005

Radio & Television

  • Moe Ansari Market Wrap: Aug 2011
  • Jordan Kimmel Radio Show: Aug 2011
  • Tim Bourquin Radio Show: Aug 2011
  • Gabriel Wisdom Radio Show: Jul 2011
  • Jim Puplava Radio Show: Jul 2011
  • Jim Puplava Radio Show: Apr 2011
  • Jim Puplava Radio Show: Feb 2011
  • Jim Puplava Radio Show: Jul 10
  • Fox Business TV with Eric Bolling: Oct 09
  • Dennis Miller Radio Show: Oct 09.
  • Chuck Jaffe Radio Show: Oct 2007
  • 25 City Radio Tour: Oct 2007
  • Gabriel Wisdom Radio Show: 2006
  • Sinclair Noe Radio Show: 2006
  • Mike Norman Radio Show: 2006
  • ROBTv.com TV: Mar 06
  • Jordan Kimmel Radio Show: 2006
  • Dick Fabian Radio Show (MP3): 2006
  • Bob Brooks (Prudent Money): 2006
  • Bloomberg Radio: 2005
  • Dick Fabian Radio Show: 2005
  • New York 1 News TV: 2005
  • Gabriel Wisdom Radio Show: 2004
  • Chuck Jaffe Radio Show: 2004
  • KFNN-AM ‘Business For Breakfast’: 2004

Note: Dozens of radio interviews (2004-2011) are not listed.

Published Articles

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Michael Covel Books

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