My guest today is Angus Deaton, the fifth Nobel Prize winner to appear on this podcast. Deaton is a British American economist, and currently a Senior Scholar and the Dwight D. Eisenhower Professor of Economics and International Affairs Emeritus at the Princeton School of Public and International Affairs and the Economics Department at Princeton University. His research focuses primarily on poverty, inequality, health, wellbeing, and economic development. In 2015, he was awarded the Nobel Memorial Prize in Economic Sciences for his analysis of consumption, poverty, and welfare.
The topic is his book The Great Escape: Health, Wealth, and the Origins of Inequality.
In this episode of Trend Following Radio we discuss:
Unemployment
Minimum Wage
Poverty
Economics
Money and happiness
The birth lottery
“In periods where there has been a tremendous amount of innovation, there is typically a very large increase in inequality.” – Angus Deaton
During your recent podcast with Steve Kamb, he mentioned that many people say before they die that they regret living lives that others expected of them instead of living lives that they truly desired. This is a very tragic fact.
If you truly want to help the people that listen to your podcast, I suggest that you continue to have guests on your podcast that can give specific and actionable advice on how your audience can live their own lives. In my opinion, this is more important than trend following trading.
I realize that you focus on trend following trading because your success as a trend following trader allows you to live the life that you want. However, if you inform your audience of any other methods that will enable them to live the life that they want, you will be doing a great humanitarian service.
Did you not feel a great sense of sadness to hear that many people die with regret because they lived lives that other people expected them to live as oppose to just living lives that they wanted?
Regards,
[Name]
My podcast is only about trend following? Hmm…
Not so sure that is accurate! One problem here? You want the wisdom how you want it: “specific and actionable” (whatever that means to you). Here are some of the non-trend followers that have been interviewed on my podcast.
Try listening to the Gigerenzer, Gray, Friedman, Sterner, Frederickson, Eisenhardt, Poliquin, Yap, Weinberg, Pearson, Fader, Holiday episodes + the huge number of others that I have not mentioned (that have nothing to do with trend following).
I feel no sadness for people that live a life of regret. None. My podcast in total, all episodes, is “why” I feel that way.
Please enjoy my monologue The Pay People Deserve 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:
Unemployment
Minimum Wage
Ayn Rand
American economics
The seen and unseen consequences of a law
Libertarianism
“Given that minimum wages hurt the very people they are supposed to help, by restricting workers’ freedom, reducing their choices, and increasing unemployment, One must wonder why, despite decades of consensus among economists, politicians and pundits continue supporting these destructive regulations. They often do so because they want ‘send the right message’ about the ‘kind of society’ we want to live in. While this appears well-intentioned, the principle underlying such arguments is actually quite perverse: that it is better for us to feel good than to actually do good.” – Daniel Bier
“Prices are not levels that set value, they are metrics that reflect value.” – Anthony Davies
I want to first say thank you for all the great material and insight you’ve put out into the universe regarding trend following trading. I have all of your books and have listened to every single episode of Trend Following Radio. Both your books and podcasts have provided me with a plethora of information on the subject of trend following and the general psychological mindset needed in order to be a successful trader.
I also wanted to say thanks for helping me with the motivation I needed to finally leave Los Angeles for the first time since college to go out and travel, something I’ve wanted to do since I graduated. As a 28-year old guy with no children, I really had no excuse as to why I wasn’t getting out there and seeing the rest of the world. Also, your mantra of “you’re gonna die”, though simple, helped push me in the direction of taking more risks.
Right now I’m living in Bangkok. Through listening to your podcasts, I know you spend a decent amount of time over here in Southeast Asia. I was wondering if you had any public speaking engagements or live appearances over in this part of the world. I’ve read all of your material and listen to every podcast but I think it would be awesome to see you speak in person about trend following. I don’t see any future speaking engagements listed on the website but since I happen to be living over here for the moment I figured it couldn’t hurt to ask.
Anyway, thanks again for everything and much peace and prosperity my friend.
[Name]
You are welcome, but no new news yet on live events. Stay tuned.
My guest today is Steve Kamb, the founder of Nerd Fitness and leader of this rag-tag group of misfits. He is an American fitness instructor, publisher and writer best known for promoting health and wellness at the website and fitness center NerdFitness.com.
The topic is his book Level Up Your Life: How to Unlock Adventure and Happiness by Becoming the Hero of Your Own Story.
In this episode of Trend Following Radio we discuss:
Traveling domestic and internationally
The hero’s journey
Marketing yourself
Marketing to a niche
What is a nerd?
Tailoring your fitness needs
“Surround yourself with people that are challenging you and making you better.” – Steve Kamb
“Life is meant to be lived on your own terms.” – Michael Covel
[Trend Following] fills a void in a marketplace inundated with books about buying low and selling high, index investing, and all other types of fundamental analysis, but lacking any resource or, for that matter, practically any reference to what I believe is the single best strategy to consistently make money in the markets. That strategy is known as trend following. Author Van Tharp has described it succinctly:
“Let’s break down the term ‘trend following’ into its components. The first part is ‘trend.’ Every trader needs a trend to make money. If you think about it, no matter what the technique, if there is not a trend after you buy, then you will not be able to sell at higher prices … ‘following’ is the next part of the term. We use this word because trend followers always wait for the trend to shift first, then ‘follow’ it.”
Trend following trading seeks to capture the majority of a market trend, up or down, for profit. It aims for profits in all major asset classes—stocks, bonds, currencies, and commodities. Unfortunately, however simple the basic concepts about trend following are, they have been widely misunderstood by the public. My desire to correct this state of affairs is what, in part, launched my research. I wanted to be as objective as possible, so I based my writing on all available data:
• Trend followers’ published words and comments over the last 30 years
• News accounts of financial disasters
• News accounts of the losers in those financial disasters
• Charts of markets traded by trend followers
• Charts of markets traded by losers in the financial disasters
If I could have written books comprising only numbers, charts, and graphs of trend following performance data, I would have. However, without any explanation, few readers would have appreciated the ramifications of what the data alone showed. Therefore, my approach to writing Trend Following became similar to the one Jim Collins describes in his book Good to Great, in which a team of researchers generated questions, accumulated data in their open-ended search for answers, and then energetically debated it.
However, unlike Collins who was writing about generally well known public companies, trend followers form a sort of underground network of relatively unknown traders who, except for an occasional article, the mainstream press has virtually ignored. What I have attempted to do is lift the veil, for the first time, on who these enormously successful traders are, how they trade, and what is to be learned from their approach to trading that we might all apply to our own portfolios.
Trend Following challenges much of the conventional wisdom about successful trading and traders. To avoid the influences of conventional wisdom, I was determined to avoid being influenced by institutionalized knowledge defined by Wall Street and was adamant about fighting “flat earth” thinking. During my research, starting with an assumption and then finding data to support it was avoided. Instead, questions were asked and then, objectively, doggedly, and slowly, answers were revealed.
If there was one factor that motivated me to work in this manner, it was simple curiosity. The more I uncovered about trend followers, the more I wanted to know.
—
Feedback from a listener:
Hi Michael.
I’ve been listening to your awesome podcast for a few months now and it has intrigued me quite a lot. Thank you so much for putting it up out there.
I never really thought about money before. I’m one of those suckers who has been keeping the money in the bank, too skeptical of financial advisers, too afraid and ignorant of the stock markets. At some point obviously I started to realize that I needed to be in control of my savings and start planning my future. I’ve been reading a lot about the markets, but nothing makes as much sense as your words.
Despite understanding your message (at least I think I do), I actually don’t know how to exactly implement that way of thinking on a personal strategy. I am a dentist living in London, 2 small kids at home, so not a lot of time on my hands. I have been putting some of my savings on a buy and hold strategy with Vanguard equity funds. But without a doubt I am dependent on market timings and on the hope things will always “get better.” And that doesn’t seem to be very sensible.
So, I am contacting you in the hope you could help me to have some more clues on how to start on a trend following strategy that could fit my circumstances.
With great admiration,
[Name]
My father is a dentist. I feel a kinship! Good news and bad news: Good? Trend following can help anyone. Bad? Need to do some prep. Here are some starters: Start Now and an Intro Video.
