Marketing Critic Makes His Case

From a reader today:

“I don’t want to out stay my welcome here, so I wont keep firing questions at you, but for me its all about confidence, not only in the system, but the mentor and the whole nine yards! You have to remember like you I’ve been there, done it and got the tee shirt in my own professions and therefore I am drawing comparisons here a bit, e.g.: if the boot was on the other foot and someone was asking me about property development or manufacturing…….. you can do both, very well, or very badly. Its not about the money and how much the course costs etc etc, I can pay whatever no problem. 2K, 5K 20K etc etc… if I think it has value against potential return, that’s the easy bit, that’s the business element……… its all about for me who I’m dealing with and if I feel the information is honest and the whole story, or I’m being played and the information is being elongated and drawn out to extract unnecessary money from me for the sake of it. Don’t take this the wrong way, but I felt your 1st book was honest, but when I’m on your website I feel a bit like the “lamb to the slaughter”, with offers and freebies and courses etc etc !! tempting me in a professional marketing manor, rather than a successful trader passing on his knowledge….. a bit like how you obtained yours. Thanks again for the response, appreciate your time. Andy”

Thanks for the feedback. We definitely have some nice layouts and marketing language here and there on our sites, but we back it up with 1000s of pages of “free” resources and data (an example). Everyone can spend a whole bunch of time on our sites learning for free at their leisure, but if clients want me and my staff to hand hold in a more personal manner, our time is not free!

P.S. I think my second book, film and course instruction are honest too!

27 thoughts on “Marketing Critic Makes His Case

  1. I have personally found both the books to be right up there with the best and most honest books written on the subject. I have benefited a lot from them and also find the site pretty useful – so here’s my bow to Michael !

  2. Michael love the books. There is one obvious question that I’ve not seen you respond to. What is your month by month performance trading a trend following system. I think it is a very fair question for someone considering spending $2000 on your trading course. Given that you promote the success of the Turtles, it would seem logical that if anyone can have a great deal of trading success it would be you.

  3. Mark, I don’t think you quite get the point here. You or I shouldn’t care about Michael’s performance. As long as he teaches and is fully honest about the difficulties in implementing the system, which i think he is, the month by month performance is something that you should decide, your % risk, not his. People here all trade sucesfully, some 100% annual returns, some 10%, and nothing is related to the system being better than the other. Covel can suck at trading, but can be a great mentor.

  4. The website is both heavy on marketing and free information. It is to be expected as you hang your hat on marketing trend following and educating on the subject. It seems to me initially that you never mentioned trading your own account and more recently have dropped a few references to it. I am intrigued as to how / if you answer the above question re personal performance.

    Either way i value your books, film and information.

  5. Seriously, success comes with a price. Be it commitment, money, energy, time, risk, tools, passion, energy, exclusion, what have you…

    What if Michael told you his personal account has averaged 5, 10, 20, 50% for the last 5, 10, 20 years? Would that be enough? How much would be enough to buy the system? The education?

    If there’s risk in the market, there is risk in buying education. It will take money. It might not work for you. It will take time. It might be the final key your trading and your brain need to make the right connections and create the right breakthroughs to take your trading to the next level. Perhaps it would take as much money as it would take time and insight and experience for you to learn on your own.

    What if you bought the course and learned one thing that saved you $2,000.00 in time over the next 2 years? Would that make the system worth it? What if the system went into drawdown for the next year? Would that make it not worth it?

    Michael’s performance is the last thing I would be thinking about when buying a system. I would be thinking what MY potential profit would be — and that profit can be measured in ways separate from dollars. I would be thinking about what my need is.

    And while we’re on this subject, I see that a lot of traders on a lot of message boards seem to think that information on the topic of trading should be given away for free. I don’t see this anywhere else… You wouldn’t dream of going to a Mercedes dealership and getting mad at the dealer because they built an awesome car but won’t give you one for free? Would you tell them, I can’t believe you’re selling this awesome car, that you created an awesome ad campaign and made me really want one, but you won’t just give it to me.

    You may say, but wait, they will let you test drive it? They will let you get behind the wheel and take it for a spin. Well, as far as I am concerned, this website, the books, the dvd’s, the blog, are all one massive test drive. And from what I can see here, there’s nothing but quality.

    What are your alternatives? The forex trading robot that makes 600% a month? LOL

  6. I trade my own account, but not running client monies here. Not my objective. Take me or leave me, but teaching trend following is what goes on here. Frankly, for the value of what is offered, and I know something about how difficult time and money wise it is/was to assemble, prices here are too low!

  7. I will use an example. Back in the day I needed to know something. Wanted confirmation that John Henry was on the opposite side of Barings Bank. I asked a yes/no question and got an honest answer from someone in position to know. The value of that one YES — changed my life. Sometimes, that’s all it takes — one simple one word answer. What was that worth to me? Millions. Too many people go through life the eternal skeptic with no ability to see through the forest. Or worse yet, they get hung up and fixated on all that doesn’t matter. All questions are fair game, just think big picture. That’s my advice.

    P.S. If you go through life looking for an evil predator in every shadow, your mind will see one! 🙂

  8. Certainly can empathize with the reader. So many scheisters (spelling?) writing books, infomercials, newsletters, bernie madoff’s, etc…..that a person needs to be careful. Having said that, if a person reads all of the data provided in the Trend Following book, then I don’t see how they can doubt.

    Jim

  9. Agree Jim. We all get started digging through information and making choices. I remember back in the day being at conferences, listening to ‘big’ names talk and preach, but it was only years later that I came to understand that some big names had no clue what they were talking about.

    Tip? The vast majority of people on CNBC have no clue, regardless of their name, title, firm association, size of their watch or how nice their tie looks.

  10. I get that posting your returns has virtually no upside to you. If you had done 80% over the last 10 years (with the S&P flat), some people will be disappointed with that performance and lean toward not purchasing a course. As a consumer, I think its a very reasonable request. Unless you’ve run extremely far below EV, you should have a performance record worth showing. How can you develop a beneficial course, if you can’t trade it yourself? The argument that people can be great teachers and mediocre at what they teach doesn’t hold water. I always hear that even Tiger Woods has a coach. Butch Harmon was a tour winner and Hank Haney was a First Team All American in college.

    I probably will purchase the course at some point, but the alternatives of subscribing to IBD, Sykes, and reading what Mark Minervini and Johnwelsh say makes more sense for me. And yes, I am an eternal skeptic. Most people in financial media have mediocre track records.

  11. Mark, my response is not going to change. The last thing I want here are clients who are still skeptical after my 15 years online educating clients, my books and film. If that contribution has not alleviated your skepticism, nothing will. As far as your Butch Harmon example, who are my competitors in the trend following education space bringing to the table what I do? 🙂

    Two follow on thoughts:

    • The investing alternatives you mention are not trend following.
    • My clients include a wide assortment of successful pro traders and managers, not to mention retail clients across the globe. So what ultimately is the real fear that one has over gaining additional education for a price? To this day I will never understand that one. Let’s face it (and this comment is not aimed at you Mark), some people will go through a life never acquiring information or education that furthers themselves for any number of excuses or rationales. Is that odd to me? Sure. Do I lose sleep? No.

  12. Come on, what is the point of keep on requesting Michael’s performance? He can teach you exactly what to do, know all the possible mistakes, the difficulty of following everything, and still blow up his personal account because he couldn’t follow the system! You’re not hiring him as your CTA. As a side example, I love […] book, It has valuable and very decent information about systems trading, and guess what, the guy blew up so many times! Does that make his info useless? The answer is a clear NO.

  13. Thanks, but no great defense needed! Not running a hedge fund here, and I have not blown up! 🙂

  14. Buy the course, or don’t buy the course. Buy IBD or something else if it makes you happy. But stop the whining. You come to this site on your own accord. No one is making telemarketing calls to your house, bothering you at dinner time asking you to buy. The info is laid out. You either find value, or you don’t. Even if Michael showed you his proprietary results, you would still come back with more questions, “Why did you do this? Why not that? Why didn’t you track this gizmo in your portfolio?”

    Check out the Appendix in Trend Following on Mechanica/Trading Recipes. The test was run in the 90’s, and before you say, “well, that was then…”, I ran the same parameters on the same portfolio, and it worked in the 00’s as well.

  15. Transaction with me is easy: get to where you want to go faster than without. That’s it. Frankly, from a psychology standpoint, extreme skepticism is interesting to me.

  16. “Many who loudly advertise themselves as skeptics are actually disbelievers. Properly, a skeptic is a nonbeliever, a person who refuses to jump to conclusions based on inconclusive evidence. A disbeliever, on the other hand, is characterized by an a priori belief that a certain idea is wrong and will not be swayed by any amount of empirical evidence to the contrary. Since disbelievers usually fancy themselves skeptics, I will follow Truzzi and call them pseudoskeptics, and their opinions pseudoskepticism.” -Quoted from http://www.suppressedscience.net/skepticism.html

  17. I’m a huge fan of Michael’s. I bought the books in college and thought they were vastly different than anything that I heard in my financial engineering classes. I’m in my mid 20’s and have allocated 85k from what I have made playing poker to trade with. I am trying to determine if using a trend following strategy makes sense for an account my size. I remember reading that Richard Dennis said that he would generate 300%+ returns on a smaller account. On the other hand the performance of CTA’s managing large amounts of money is less than stellar for what I am trying to achieve. Considering the resources I listed in the previous post have multi year public track records of triple digit returns and limited drawdowns, their approaches are very compelling for me. I asked ONCE to see what Michael’s track record is. I don’t believe he is managing as much as most CTAs so it would be interesting to see the actual results of an individual trader. Most people who post and say things like “XYZ” trading system works for them are lying.

    For me this is a big decision. Its not just allocating 3% of my trading capital purchasing a system. I am concerned about the possibility of drawdowns as well as underperformance relative to other strategies for an account my size. I really like the concept of trend following, but I don’t want to spew a bunch of money. I obviously don’t care if I get trolled by message board posters. If I can find someone with a track record triple digit returns on a smaller account, it is worth it. From a salesman’s point of view, someone like me is a pain in the ass and might not be worth the trouble. I don’t know what that has to do with me from my perspective. I only care about maximizing my long term earn.

  18. Triple digit returns with no DD don’t last. Better yet, a ‘track record’ showing 1-2% every month, month after month, will eventually break.

  19. Mark, regarding your account size, I can say mine is smaller and I’m not the in the 300% (not even in the backtest, testing the most aggressive settings I could get that, nor I want to), but 100% is perfectly possible. For me, what did the trick is finding a selected futures basket of mini contracts. For that you need a broker with a global reach. Or substitute the biggest futures contracts for ETFs, which in my case wasn’t great because of margin interest, but can be in your case. In a word: It’s possible.

  20. The obvious question you should ask when committing to trend following isn’t how did so and so do.

    Someone else’s results are irrelevant to your results. Why? Because we are all different. We picked up the system and ideas at different times, we selected different markets to trade, we allocated risk differently, we used different exits and entries.

    If you want to take trend following for a test ride, read the information here. Create your system. Then utilize a free data provider and paper trade for 6 months to a year. Check your results. If you are happy, go for it, if not, move on.

  21. To Mark:

    What benefit do you gain by having Covel’s track record? Unless he is going to be trading your money you don’t need it.

    You are looking for some kind of “guarantee” that trend following works. You’ll only find that out by implementing the strategies yourself. I can tell you… it works for me and most of the others posting here. The question is do you have the discipline to use it properly so that it works for you? Only you can decide/learn that for yourself. Someone else’s track record isn’t going to make any difference… we all use different levels of risk (what we’re comfortable with) and trade different markets… therefore we all have different track records.

    If you are really serious about learning trend following then invest in the knowledge being offered here. You can do that on many levels… from the free information to an $18 book to a 2K trading course. In my opinion you can’t go wrong with any of them.

  22. Also to Mark:

    A glaring omission from my last post…

    I don’t know how far along you are in your “journey”, but the first concept you need to grasp is being completely personally responsible for your actions. Asking for someone’s personal track record to satisfy your own desires about if a methodology will work for you violates this cardinal rule of successful trading.

  23. OK… I just re-read and saw that you made your trading capital by playing poker. How do you not get the concept of trend following?

  24. The $2,000 might seem a lot, but how much have some of you spent each year on lattes, on watering a lawn, getting dry cleaning, cigarettes, on that flat panel or hi tech toy you just had to have?? The books are equal in cost to starbucks or adding a few songs from the iTunes store. (Drink water and buy the book!) Years ago I paid up, after emailing Michael once. He responded promptly and straight forward fashion. Customers got a credit for a using a crap competitor system (common sense if you want to sell). Several years with a friend resulted in an automated,mechanical system (spare time) and off we went, following in Rich Dennis’, Bill Dunn’s & J. Henry’s, et al footsteps. Routine losses from time to time, followed by nice profits, which have dwarfed the tuition, and now the process is like brushing teeth, pretty regular and straight-forward. The rest is just a matter of surviving and TIME. Lastly, it will be about dealing with people and building a business…dealing with people, that’s sometimes more complicated than trading. Thanks Michael 🙂

  25. Personally, I trade for the same reason Warren Buffet says he went into investing: “So I wouldn’t have to deal with stupid people.”

    Trading = no politics, no ass-kissing, no wannabe’s…you’re either right or wrong and your bankroll determines wheher you know what you’re doing, not the color of your skin, not your religion,not your taste in watches, not your public speaking ability…nothing . It’s the perfect meritocracy…I love it!

  26. To DG Dye:

    Absolutely perfect words for how I feel about the bonus benefits of trading. I have owned and still own several companies associated with real estate (development, construction and managment), retail opertations, and even a restaurant. Anytime I count on other people to operate, sale or even show up for work, I just know the next problem is around the corner. I made the decision a few years ago to elimate all “open the doors every morning businesses” and scale back to real estate holdings only. I am down to one retail business remaining that is currently for sale.

    I agree with the saying that “Business would be fun if it weren’t for customers or employees.” Trading is that business, it doesn’t require customers or employees yet provides a good challenge with rewards if your ability and commitment are there.

    Your comment now hangs framed on my trading wall. Thank you sir.

  27. Thanks to your site, books, trading course and “Paul Tudor Jones, losers average losers.” I kept a small loss from becoming much worse and made 60K last month..!! 2k seems to cheap..Thanks!!!

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