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Author: Michael Covel

Author of Trend Following and TurtleTrader.

Put the Focus on You

Posted on by Michael Covel

Feedback:

Hello Michael, I trust this email finds you in good spirits! My name is Gabriel. I have taken the time to read through and listen to various audio recordings on Trend Following written by Michael. It is a very intriguing area and I thoroughly enjoy the teachings it espouses. I am taking the time to write this note as I am currently at a critical stage in my life. I am currently 36 years old and have just had my third child. We have a 7, 2 and now 2 month old child. This is the reason I write this letter to you. My whole life I have been in commission only and/or independent contract/sales positions. So basically I have always “eaten what I killed”. Over the last 4 years I have expanded my operations and managed upwards of 60 of my own staff and personnel in an attempt to experience exponential growth within our business. Slow sales and non-producing sales reps along with non-paying tenants within some of our rental properties has inevitably caused a downward spiral for us, however we are still working hard to rebuild after these hiccups. Admittedly my partner would like to add more stability to our lives. I am an entrepreneur, sports enthusiast and competitor in everything I do. Hence the difficulty in me going out to work a “9 to 5” where I may or may not control my own destiny under someone else’s watch. I have had a desire to get into Trend Following for several years now but just never found the opportunity to say “I am ready, let’s do this.” I know you have spoken to many people across various walks of life all with varying levels of expertise, experience and life goals. I strongly believe in your message, and see this as a leap of faith to put my head down and study/work within all that I can in the Trend Following space. I just don’t know where to start. Admittedly, financial independence is a goal for me to achieve to give my family. I will never stop working, but most importantly love to win! I just don’t know what I should do, when I should do it or what is the best way to get started. II look forward to any feedback you can give me on this opportunity and working within the space.

With Regards,
[Name]

There is no quick answer. Best bet? Focus on you, and not working for someone else in the trend following space. How to make the focus on you? Three ways:

1. trendfollowing.com/translations/.
2. trendfollowing.com/podcasts/.
3. trendfollowing.com/products/.

The first two will only cost you time.

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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.

Mainstream Financial Media & Wrestling: Hip Tied

Posted on by Michael Covel

Great connections from Ben Hunt:

My point is not that mass-mediated financial advice is kinda like professional wrestling. My point is that mass-mediated financial advice is EXACTLY like professional wrestling. And I know that it must seem like I’m slamming Cramer and CNBC and the rest of the mass media financial guru-sphere by equating their efforts with professional wrestling, but I’m really not. I just want to call things by their proper names. I LOVE professional wrestling. Second only to professional politics, professional wrestling demonstrates Narrative creation and execution at an extremely high level of artistry, with hundreds of millions of dollars at stake. And it’s NOT a fake representation of wrestling in the way that an episode of “Marcus Welby, M.D.” is a fake representation of medical practice. Professional wrestling is scripted and choreographed, like a TV medical drama, but there are actual athletic feats executed here. It is “real wrestling” in that sense, where there is no “real medicine” being practiced in the filming of “House”. But no one in his right mind believes that professional wrestling is the same thing as Olympic wrestling or collegiate wrestling. Professional wrestling is its own thing – a marvelous and entertaining thing – and it deserves to be understood in that light. Well … mass-mediated financial advice is its own thing, too, where Narrative creation and execution is the only thing that matters, and everything you see or read is driven by the economic diktat of driving the Narrative du jour forward. No one in his right mind should believe that mass-mediated financial advice is the same thing as professional, individuated financial advice. And yet here we are, in a world where the notion of trust has become so warped that every day, thousands of investors question the trustworthiness of their flesh-and-blood financial advisors and tens of thousands more act on their own because they trusted a piece of Narrative-driven advice they heard on the TV or read in the newspaper. Why is it so important to distinguish between real people and mass media representations of people when it comes to matters of trust? Because in the wise words of J.K. Rowling, never trust anything that thinks for itself if you can’t see where it keeps its brain.

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.

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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. 288: Frank Curzio & Robin Griffiths Interviews with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Frank Curzio & Robin Griffiths
Frank Curzio & Robin Griffiths

My guests today are Frank Curzio of Stansberry & Associates and Robin Griffiths, the Chief Technical Strategist at ECU and formerly at HSBC.

The topic is markets.

In this episode of Trend Following Radio we discuss:

  • Covel and Curzio discuss how the fundamental guys justify all time highs in the equity market; the Shiller PE ratio; the importance of analyzing interest rates; Warren Buffett recent investments; what the Fed would do if we went down 30% today; why having a low interest rate environment creates a good situation for stocks; being prepared from a risk management perspective; Zero Interest Rate Policy, its effect on equities and bonds, and tail risk; comparing the environment today to the 1987 crash; hypothetical situations surrounding the S&P 500; exit strategies; and the 24-hour news cycle.
  • Covel and Griffiths discuss how to use fundamentals in an age when interest rates are artificially controlled; Griffiths’ history as a mechanical engineer and how he found his way into trading and technical analysis; regression analysis; Elliott Wave and cycles; the idea of whipsaws; geopolitical risks; China, India, and the rise of Asia; not trading off of geopolitical fundamental information; how Griffiths came to the conclusion that the efficient market hypothesis and much of what the mutual fund industry depends on doesn’t hold water; spikes and why people in 2014 think that all spikes are gone; Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay and the cyclical nature of booms and busts; and virtual currencies.

Listen to this episode:

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Don’t Miss Out: Listen to Trend Following Radio

Posted on by Michael Covel

A short but sweet email came across my desk from a great investor (that has appeared on my podcast) about a meeting he had with another great guest that has appeared on my podcast:

Had a catch up with Charles Faulkner today who agreed that you are an amazing interviewer.

My reply: I have great guests. Makes it easy!

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.

You Are Right… The World Could End

Posted on by Michael Covel

Feedback in:

I am looking forward to a future show with more details from Dunn Capital. If I’m not mistaken, they would have a practical opinion on the usefulness of both Bayesian Inference and Efron’s bootstrap method. Efron, of course, is the author of the Bayes critique cited above.

Per the Kaminski piece, there is no guarantee that 800 years of evidence won’t be undone by a perpetual and implacable tyranny of central bank price discovery suppression. This research looks suspiciously like new marketing materials from Greyserman/Hite etal. In today’s world It is absolutely invalid to say that stop orders which lost money on concentrated bets in the US stock index will be a justifiable risk control cost when the market gaps down 50% over a weekend because the Fed finally sh*ts the bed. How can any credible trend follower say they don’t care to know anything about unprecedented and precarious risks to the monetary system in their analysis?

Dunn seems to have taken more into account than ISAM. An educated guess about Dunn’s risk throttle is that one of the inputs is proportional to the difference between the overnight rate and the CPI.

Further to reducing risk in a low payoff environment (throttling), one of your other guests, Peter Schiff, (who you must interview again) has a decent theory that CPI and the overnight rate will never again cross paths or at least not until Keynesian central banking is dead and buried.

BTW, if something goes wrong with the monetary system, have you considered the possibility that agricultural markets and other markets with lock limits could suddenly and simultaneously be both lock limit up and lock limit down?

I’m guessing, in your mind, you have this idea that it is impossible for all positions to simultaneously lose because there is both a long and short side. One side has to win by definition, right? Well, maybe not…

Think about the situation where the monetary system is pushed to the breaking point. Where in the CME rule book does it say a market can’t be locked both up and down? Trend following strongly depends on the assumption of knowing prices or at least a sensible price ranges. What happens when this is suddenly a bad assumption?

DUNN CEO already appeared on my podcast. TFs don’t use Fed analysis in their trading. Of course, as you note, the world could end. In that case far more issues than trading will be relevant.

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.

Vineer Bhansali Trend Following White Paper

Posted on by Michael Covel

Feedback in:

Mike, Can you send me the white paper that was referenced in the Vineer Bhansali podcast? I apologize if this is posted somewhere obvious and I missed it. Normally I’d probably have found it on my own, but having a 3 week old newborn is temporarily draining my productivity! It’d be much appreciated if you could point me in the direction of the research that was discussed. What a refreshing podcast to hear a more mainstream financial institution embrace real trend following.

Thanks,
[Name]

Thanks. Go here for his white paper. And good luck with your new little one!

Also in:

Michael, great show. Do you have additional information about the research/historical performance work done by Vineer Bhansali or is it just the information from the PIMCO pages?

Do you know if this fund actually follows the 100% systematic “simple” trend-follower approach back tested in the article or is this just a bait and switch for a discretionary fund? Do you know the actual rules for the “simple” trend-follower approach back-tested in this paper?

Many Thanks,
[Name]

Best bet is to reach out to them for all questions about their papers.

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. 287: Toby Crabel Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Toby Crabel
Toby Crabel

My guest today is Toby Crabel, a tennis player who is now a commodities trader. In 2005, the Financial Times called Crabel “the most well-known trader on the counter-trend side”.

The topic is commodity trading.

In this episode of Trend Following Radio we discuss:

  • Crabel’s history as a pro tennis player
  • Longevity and consistency in tennis and trading
  • Where Crabel stands with the total number of systems he employs
  • The source of Crabel’s profits and the philosophy behind it
  • Price action
  • Winning and losing volatility
  • Why Crabel needs price movement and volume
  • The idea of price shocks and the importance of being aware of them
  • The process of moving from high drawdowns to a much lower drawdown
  • The importance of diversity
  • Early lightbulb moments that informed Crabel’s trading style
  • Crabel’s experience with Victor Niederhoffer
  • How the philosophy of Objectivism has informed Crabel’s life
  • The liquidity of futures markets
  • The importance of persistence

Go listen. You may also enjoy this post on Toby Crabel.

Buy & Sell

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