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Ep. 200: Tom Basso Interview with Michael Covel on Trend Following Radio

Tom Basso
Tom Basso

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My guest today is Tom Basso, the trader most famously known as “Mr. Serenity” in Jack Schwager’s “New Market Wizards”. Basso, now retired, was a stock and commodities trader who was president and founder of Trendstat Capital Management. He is the author of two books, “Panic-Proof Investing” and “The Frustrated Investor”. Basso 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.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • Location independence
  • Making sure trading doesn’t take up your entire life
  • Stoicism
  • Trend following in the emotional arena
  • Mental exercises
  • The psychology of trend following
  • The “observer self”
  • The mental aspects of success
  • The importance of being able to lose small amounts of money
  • Why trend following does so well when the black swans hit
  • Basso’s daily routine and the importance of routine in daily life. Covel and Basso also go through listener questions such as whether Basso would make the same trading decisions that he did from the start
  • Money management v. trading
  • Tinkering with current systems
  • Knowing when it’s a regular drawdown v. something really going the wrong way
  • Whether Basso is a one-system kind of guy v. multiple systems

In this episode of Trend Following Radio:

  • How to use mental exercises to improve yourself as a trader
  • Why the tolerance for losing small amounts of money can make you almost invincible
  • Tom’s daily trading routine: how to ensure you don’t spend the whole day making trading decisions
  • Why understanding strategic planning is key to being a successful trader
  • Trading for clients vs. trading for yourself, and the regulations that go along with that
  • Understanding the difference between a normal draw down vs. something really going wrong
  • Separating facts from opinions, and why it’s important in trend following trading

Listen to this episode:

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