Ep. 676: Markets and Profit with Michael Covel on Trend Following Radio

Do people really buy that many books? Yes!
Do people really buy that many books? Yes!

Subscribe to Trend Following Radio on iTunes

Via social media, virtually everyone feels they have power. Critics are at an all time high and unfortunately most of those critics are being perpetuated by propaganda. How do people know what to believe and what to discard? There is one place where propaganda is obsolete – the market. If you trade off price alone, there is no need to discern truth from propaganda.

It might sound pedantic or perhaps that I am focusing on the extraneous, I am not: A speculator’s ability to receive a price they can count on as fact—is the foundation of markets. Said another way, with no price, humanity is back to cavemen beating each other with clubs. Austrian economist Ludwig von Mises puts price discovery’s value in perspective: “It is the very essence of prices that they are the offshoot of the actions of individuals and groups of individuals acting on their own behalf. The catallactic concept of exchange ratios and prices precludes anything that is the effect of actions of a central authority, of people resorting to violence and threats in the name of society or the state or of an armed pressure group. In declaring that it is not the business of the government to determine prices, we do not step beyond the borders of logical thinking. A government can no more determine prices than a goose can lay hen’s eggs.”

In this episode of Trend Following Radio:

  • Hedging vs. Speculation
  • Volatile returns
  • Elon Musk
  • Critics
  • Prediction in markets
  • Lumpy returns

The Author