My guest today is Brett Steenbarger, a Clinical Associate Professor of Psychiatry at New York State University, author of “The Daily Trading Coach,” “The Psychology of Trading,” and “Enhancing Trader Performance.” His newest work is “Trading Psychology 2.0: From Best Practices to Best Processes.” He is a trading coach, psychologist, author, blogger, and stock index trader.
The topic is trading psychology.
In this episode of Trend Following Radio we discuss:
The emotional “buy in”
Checklists
Finding a smooth equity curve
Repeated performance vs. deliberate practice
The role of fitness and health in trading
The moment of now
Systems trading vs. discretionary trader
Relationship between volatility and volume
“The fantasy of easy riches collides with the reality of what you need to do to prepare to win and I think that creates quite a dissidence for many beginning traders and ultimately leads them to leave the field.” – Brett Steenbarger
Please enjoy my monologue Investing and Sports Parallels 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:
Consistency vs. the home run
Quarterly performance
Trend following performance
Emotion in human nature
Irrationality in investing
“The market is made up of people and to beat it you have to know them as well as you know the thing you are considering investing in.” – Howard Marks
“The future ain’t what it use to be” – Yogi Berra
“Consistency and minimization of error has always ranked high among my priorities and they still do.” – Howard Marks
My guest today is Jim Rickards. Jim was front and center during the 1998 LTCM blow-up. He was a partner and general counsel for Long Term Capital Management. Following their blowup, he was principal negotiator in the 1998 bailout of LTCM by the Federal Reserve. He has had a bird’s eye view of some of the most interesting events in the economy over the last 20 years.
The topic is all that is finance.
In this episode of Trend Following Radio we discuss:
Jim talks about the three elements that his model is based on: behavioral finance, complexity theory and inverse probability. He goes into great depth on what all of those models are and gives real life examples for them.
My guest today is Kathleen Eisenhardt, the Stanford W. Ascherman M.D. Professor and a faculty member in the Stanford Technology Ventures Program. Professor Eisenhardt is also author of over 100 articles in research and business journals, and the first author featured in Harvard Business Review’s OnPoint collection. She has been a Distinguished Visiting Professor with Insead’s Entrepreneurship and Family Enterprise area.
The topic is her book Simple Rules: How to Thrive in a Complex World.
In this episode of Trend Following Radio we discuss:
Bottleneck concept
Complexity is not always best
Tax code for political gain
Simplifying government
Improving your probabilities with rules
The Federal Reserve
“There are two kinds of complicators. One are people who are risk adverse. They just want to lock everything down so there is no problem. If they plan for every contingency then they have it covered. The problem is that you can’t predict contingencies.” – Kathleen Eisenhardt
Most people are sheepish. They love the crowd and can’t break free. Consider an excerpt from Trend Commandments:
You see them. Maybe you are one. Some are so connected to their BlackBerry, they can’t imagine it not being in their hand 24/7. Compulsive gaming. Second Life. People are looking at screens, sometimes multiple screens. Some think teaching students to multitask is important for future jobs. Jobs doing what? Serving Ritalin with a splash of Patrón?
Attention deficit disorder is so pervasive, and so ubiquitous, that very few of us even see it as a major concern. People are supremely distracted, and that equals behaviors driven by the moment. Not behaviors purposeful and thought out.
While making a documentary film (www.brokemovie.com) one of the first places my crew visited was a sheep farm. Those animals were so scared to be separated from the group it is terribly hard to put their fear into words. Late in the day of the shoot, I got really close to the herd and tried to split them in half. They panicked to reform their group. They had to get back to one cohesive crowd. They made no sounds. Their faces were expressionless. They just moved their feet—fast.
Humans live to be part of a group too: The group offers safety, confirmation, and simplifies decision-making. Further, if something goes wrong, it is far more comforting to be with others than to be alone—the old saying, “misery loves company,” rings true.
Just wanted to say thanks for the great content over the years. I finally gave my notice to my employer this last Tuesday and am going out on my own in ten days. What is amazing is how addicting the steady paycheck is. I had multiple consulting clients lined up with contracts signed before I pulled the plug on the corporate gig and I still struggled to pull the cord. Thinking about some of the incredible people’s stories that you profile on your show helped me finally get off my ass and pull the trigger.
What’s amazing is once I made the decision that I was going for it a whole world of opportunities opened up. Now in addition to the consulting business I have another product that me and a couple of business partners are getting ready to manufacture and sell. Once you step away from the insane amount of wasted time in corporate America and decide to go do your own thing life becomes much more creative.
BTW, what I’m doing has nothing to do with money management or trading. It has everything to do with being a free person and taking control of my life. Your show has broad appeal.
My guest today is Rob Walling. Rob may not be a trader, but he is a serial entrepreneur. And trading at its heart, after all, is an entrepreneurial activity. He is an author, podcaster, and angel investor. He is the author of Start Small, Stay Small: A Developer’s Guide to Launching a Startup, which was published in 2010. Walling is the founder of email marketing software Drip that was acquired in a life-changing exit by Leadpages in July 2016.
The topic is serial entrepreneur.
In this episode of Trend Following Radio we discuss:
Rob Walling’s “Stair-Step Approach”
Growth hackers
The act of creating
Focusing on the “Unicorn” rather than reality
Filtering your information
Skin deep information
“Software becomes like building a skyscraper. You can’t go back and replace that foundation. Once it’s up, its just too hard.” – Rob Walling
“It’s easy to be great, its hard to be consistent” – Steve Martin
“You can’t jump to the majors if you haven’t played little league yet.” – Rob Walling
Seth Godin makes the case for my business (unintentionally):
Who is this for?
Is it for people who are interested, or those just driving by?
For the informed, intelligent, educated part of your audience? For those with an urgent need?
Is it designed to please the lowest common denominator?
If you’re trying to delight the people who are standing on one foot, reading their email and about to buy from a competitor because he’s cheaper than you, what compromises will you need to make? Are they worth it?
I recently created a starting point for my trend following world.
