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Ep. 498: Norton Reamer Interview with Michael Covel on Trend Following Radio

Norton Reamer
Norton Reamer

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My guest today is Norton Reamer, the former Chief Investment Officer and CEO of Putnam Investments. He also founded and ran United Asset Management for 20 years. He has 50 years of experience on Wall Street. Today, Michael and Norton talk about his new book, “Investment: A History.” It is a detailed anthology on investment.

The topic is his book Investment: A History.

In this episode of Trend Following Radio:

  • Personal responsibility in the stock market
  • The role of financial leverage
  • Resource allocation
  • The suspension of diligence during economic booms
  • Efficient markets vs. Behavioral markets
  • Warren Buffett and survivorship bias
  • Tail risk
  • Quant and momentum style trading
  • Practicing caution in the markets
  • What impact does interest rates have on the value of assets

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Diversity in the Trend Following Podcast

Feedback in:

Mike,

You asked for feedback so here goes…

Thank you very much for the excellent series of podcasts, whist I was specifically drawn to them from the trading perspective, I have found the more recent directions you have been going in have also been very inspiring. I have just read Chris Voss’s book and have bought Cialdini’s as well as several other authors you have had on.

I consider myself to be fairly well educated, I have a degree in psychology, an MBA, I am a chartered accountant, have a treasury qualification, have many vocational qualifications, i.e. learned to fly, taught formal navigation courses etc.

I have developed a viewpoint, prior to your podcasts, which has driven me to a lifelong yearning to learn, and hopefully drive my personal development. I believe that people have a massive capability to improve their engagement and performance in many arena’s however most people just want to hook into the matrix and be led by the nose. Unfortunately most businesses are not organized to try to get the most out of their staff either, which does not help the situation.

I have found your podcasts to be a better education for life than any of the above formal qualifications that I have studied, I enjoyed most of them, but I did not really enjoy my time at school, from an educational perspective I though it was sadly lacking, although probably part of the blame rests with me.

Whilst your podcasts lack the academic infrastructure, so I mean there is no follow up process to ensure what elements people pick up and choose to study in more depth, I believe the series is far superior to a university degree. I feel you should be congratulated on what you have achieved so far, the eclectic mix of such a wide range of people, from Ayn Rand, Robert Greene, Ed Seykota, Milton Freidman, Napoleon Hill, Didier Sornette, Steve Pinker etc. is inspirational. I personally recommend your podcast at every opportunity, I have a niece and nephew who are just coming to the age where I think they might benefit from this, and I will recommend this to them soon.

Some of my favourite podcasts include Napoleon Hill, Chris Voss, David Harding and Gerd Gigerenzer, in no particular order. There are very few that have ever left me cold.

What I find astonishing is that you continue to do this at such a pace, I struggle to keep up with you, from a reading perspective. I have found some fantastic sources of mind improving information in your work, in addition to the trend following approach to trading which drew me in the first place.

Keep up the good work,
[Name]

Thanks for the nice words!

Michael Covel
Michael Covel

How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Ep. 497: David Stockman with Michael Covel on Trend Following Radio

David Stockman
David Stockman

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My guest today is David Stockman, a former United States congressman. His books include, “The Great Deformation”, and “Trumped: A Nation on the Brink of Ruin… And How to Bring it Back”. He is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.

The topics are his books Trumped! A Nation on the Brink of Ruin … and How to Bring It Back and The Great Deformation: The Corruption of Capitalism in America.

In this episode of Trend Following Radio we discuss:

  • Glass Steagall
  • Clinton and Trump campaigns
  • Donald Trump and Bernie Sanders supporters
  • Deutsche Bank
  • European banking system
  • Sub-zero interest rates
  • Chinese economy
  • 2016 Election as a turning point in America

“[Economists] are making it up by the day, as they go along. This stuff is really stupid and it is getting crazier by the day.” – David Stockman

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Bubbles, Rationality and Trend Following

Human nature isn’t rational. It blows bubbles and then pops bubbles—and we can see this going back hundreds of years seen across calamities that we have all heard about:

• Dutch Tulip Mania (1634-1637)
• The South Sea Bubble (1716-1720)
• The Mississippi Bubble (1716-1720)
• The British Railway Mania Bubble (1840s)
• The Panic of 1857
• The Florida Real Estate Bubble of the 1920s
• The Stock Market Crash of 1929
• The 1973–74 Stock Market Crash
• Black Monday – the Stock Market Crash of 1987
• Japan’s Bubble Economy and Crash 1989-current
• Dot Com Bubble (1999-2002)
• United States Bear Market (2007-2009)
• Flash Crash (2010)
• Chinese stock market crash (2015-16)
• Brexit (2016)

And on and on…

But it’s beyond simply not rational. Those events, the human action driving those booms and busts, are best described by academia’s Prospect theory, cognitive dissonance, the bandwagon effect, loss aversion and assorted heuristics in judgment and decision-making—to name a few of the hundreds of biases inherent in our lizard brains.

More.


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
Frequently Asked Questions
Performance
Research
Markets to Trade
Crisis Times
Trading Technology
About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Ep. 496: Six Feet Under with Michael Covel on Trend Following Radio

Six Feet Under with Michael Covel on Trend Following Radio
Six Feet Under with Michael Covel on Trend Following Radio

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Please enjoy my monologue Six Feet Under with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

In this episode of Trend Following Radio:

  • Free lunch myth
  • Robin Hood myth
  • Collectivism
  • Case against equal pay for equal work

“The state is that great fiction by which everyone tries to live at the expense of everyone else.” –Frédéric Bastiat

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Ep. 495: Ted Parkhill with Michael Covel on Trend Following Radio

Ted Parkhill
Ted Parkhill

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My guest today is Ted Parkhill. Ted has over 25 years of management experience in the investment business. He is a founding partner of systematic macro investment manager Incline Investment Management (IIM). He is also serves as an Assistant Professor of business at Sierra Nevada College in Incline Village, NV. Prior to IIM he was the director of marketing for Zazove Associates a multi-billion dollar quantitative convertible securities manager. He was a senior marketing executive at John W. Henry & Company one of the original Commodity Trading Advisors.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • It is possible to consistently generate profitable returns through systematic trading
  • Markets are inefficient and therefore trends materialize
  • Trends last longer than people think
  • Prices reflect the sum of the knowledge of all market participants

“…Human nature never changes. Therefore, the stock market never changes. Only the faces, the pockets, the suckers, and the manipulators, the wars, the disasters and the technologies change. The market itself never changes. How can it? Human nature never changes, and human nature runs the market – not reason, not economics, and certainly not logic. It is our human emotions that drive the market, as they do most other things on this planet.” – Jesse Livermore 1940

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Napoleon Hill Featured on Trend Following Podcast

Napoleon Hill was born in 1883 and died in 1970. He is most known for paving the way for the new thought and personal success movement with his book, “Think and Grow Rich,” which has become one of the best selling books of all time. Its premise is to help people realize they have the power to create success within themselves by way of conscious and unconscious thought. His message is straightforward, pragmatic and clear.

The presentation [featured in Trend Following Radio episode 404] is centered on making a goal and how to use certain tools to achieve that goal. Napoleon starts off by explaining the power of motives. He says you have no right to ask yourself or anyone to do something unless you give an adequate motive. If you give someone a good enough motive to buy something from you or give yourself a a worthwhile reason to achieve a goal you can sell or accomplish anything. You can also trick your mind to believe anything by repetitive action. If you have faith in what you want to accomplish you will accomplish it. On the same note, faith without action is dead and faith without believing is dead. Napoleon believed that 98%-100% of people sell themselves short because they do not believe in themselves. He says, “The power of thought is the only thing humans have absolute control over.” By repetition, thought, and action you can educate your brain to pick up only the vibrations related to what you want. He stresses that you must make sure your subconscious mind knows you are the boss.

The power of motives, thought, and faith in yourself all goes into being able to create and carry out a plan successfully. Napoleon says to write out your major objective in life and give it a timeline. Make sure it is clear and precise. Keep your major purpose to yourself. Your actions speak for themselves, and the envy of mankind can slow you down. Also, leave your plan flexible. Nobody can put limitations on you except for yourself. With that being said, acknowledge your weaknesses but don’t let them overtake you. If you keep your mind positive, it becomes greater than all the negatives.

Feedback in:

Michael,

Thank you, thank you, thank you for posting the podcast interview with Napoleon Hill. In late 1975, I was fortunate enough to read an article in the Chicago Tribune about a man whose life was changed after he read “Think and Grow Rich”. As a recently divorced single Mom, I was so ready to hear his message. “Think and Grow Rich” literally changed my life and it was a joy to hear this man speak after so many years. His work continues to bring amazing gifts into my life and I thank you for reminding me what started it all so many years ago.
Sincerely, [Name]

Welcome!

Napoleon Hill
Napoleon Hill

How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
Frequently Asked Questions
Performance
Research
Markets to Trade
Crisis Times
Trading Technology
About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.