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Michael,

Does prior day trading experience help with Trend Following?

Zero.

None.

Unless the experience was that it was a massive waste of time and dollars.

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Do you know your landscape…for anything?

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Jonathan Tepper is co-author of “The Myth of Capitalism: Monopolies and the Death of Competition.” He is chairman of Variant Perception, a macroeconomic research group catering to asset managers and co-founded Demotix, a citizen-journalism photo newswire.

Tepper notes — Google and Facebook control over 70% of all search and linkage within the internet. Their algorithms are biased and guide users to go where they want them to go. Most need Google or Facebook to login to certain websites. So on a platform as vast as the internet, where is the competition?

There’s a lot of smart, wealthy, entrepreneurial focused people around the world – why are they not fighting back? There is virtually no interest by people in Silicon Valley to get into the search engine game. Any small competitor that tries to insert themselves into the industry gets bought out by their larger sized competitors. Jonathan encourages capitalism and companies becoming monopolies because of organic growth. Unfortunately, this is rarely how companies grow. Monopolies are usually formed due to political advantages and strong economic footholds. Jonathan describes the economy right now as “fake capitalism.”

What will it take to overturn a Google or Facebook or Amazon? Will they be dominating for the next 30 years? The central point of evolution is competition – the struggle for survival. In a perfect world, companies with the best and strongest traits would survive while the old and fat companies would die off rather than continue to thrive because of crony capitalism. Only time will tell if these mammoth sized companies will continue to push boundaries and prosper or if a younger more creative company will overthrow them.

In this episode of Trend Following Radio:

• Technology monopolies
• Capitalism
• Airline monopolies
• Anti trust laws
• Federal Reserve
• The banking system
• Fake capitalism
• The Antitrust Paradox
• Patents

“Economic freedom is essentially a per-requisite to political freedom.” – Jonathan Tepper

Mentions & Resources:

• Jonathan Tepper
• www.mythofcapitalism.com
• The Myth of Capitalism: Monopolies and the Death of Competition

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Time to Blame the Computers Again…

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Trust but verify. Do you listen to media, teachers, etc. and blindly trust the information given? When listening to information or insight it is ok to trust, but you must verify. The vast majority of people choose to never second guess the source.

Michael’s first aha moment with looking outside the box was discovering the turtle story. There were a few things that caught his interest about the story–the trading experiment was seemingly repeatable, that systematic kind of trading was teachable and doable for anyone, and many of those involved in the experiment had moved on and made fortunes. Discovering trend following through the turtles led to many other avenues for Michael, including this podcast. Michael shares some of those insights learned over the years, including what he has learned during the evolution of this podcast.

In this episode of Trend Following Radio:

• Turtle story
• Bayesian mindset
• Going with the flow
• Open to new opportunities
• Trend following philosophy
• Holy grails

Mentions & Resources:

• The Complete TurtleTrader

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Daniel Crosby is a psychologist, behavioral finance expert, asset manager and author of several books. His most recent book is “The Behavioral Investor.” Daniel’s background in behavioral psychology has taught him to look at markets as a backdrop to view human behavior in a real world setting.

Why did Daniel decide to write his latest book? What was his motivation? Daniel is a regular speaker at conferences. At those speaking engagements he was continuously hearing misinformation presented about behavioral biases in trading. He wanted to set the record straight about how to tap into emotions and explain how much personalities really play into trading.

As a psychologist who works in the markets, Daniel gets real time information on how people are feeling by looking at how price movements fluctuate. Daniel cites a study showing that 94% of the time rules beat out discretion in the markets. Betting on your “gut” almost always leads to ruin. Trading off rules doesn’t just lead to a better trading record, it also leads to less brain damage and heartburn. Daniel found about 200 different biases that can harm up trading. Within those 200 biases Daniel has created four main categories: ego, emotion, attention, and conservatism. He shows through facts and data how systematic trading is better on the pocket book as well as fostering a healthier lifestyle.

In this episode of Trend Following Radio:

• Functional fictions
• Evolution
• Human behavior in market price
• Loss aversion
• Behavior bias
• Contrarian perspective

“Data without theory and theory without data produce spurious results.” – Daniel Crosby

Mentions & Resources:

• Daniel Crosby
• The Behavioral Investor

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Ann Mei Chang is author of “LEAN IMPACT: How to Innovate for Radically Greater Social Good.” She was a technology executive with more than 20 years of experience at Google, Apple, and Intuit, as well as a range of startups before she pivoted her career into the private, social and non-profit sectors. She now works with companies around the world to help streamline growth and innovation.

Innovation is necessary for any company to grow. Ann helps non-profits and more risk-adverse companies properly take risks to improve their process. From global development to technology companies – there is a lot of uncertainty to combat against, grants to be filled as well as shareholders to appease. When tackling big issues investors and the public want to see tangible results quickly. Ann shows a balance between thinking big, keeping an eye out for what can be done better and keeping track of ever changing demand. Audacious goals are important, but you also need a process and plan of what is going to get you to that audacious goal.

Innovation is not only about creating the latest new thing, but rather taking something that is already created and making it better. Google wasn’t the first search engine, but they made it better. Facebook wasn’t the first social network, but they improved on it and made the experience better. Ann gives the example of a 700 year old invention – eyeglasses. With how long eyeglasses have been around, there is still about 2.5 billion people without access to them. Vision Spring is a non-profit that was created to reach these people without access. Vision Spring’s initial business plan wasn’t reaching as many people as planned and money was running out quickly. With continuously being open to making pivots in their business model, they continue to grow and reach larger and larger amounts of people. It is all about adaptability and innovation within whatever company your are at – non-profit to big technology.

In this episode of Trend Following Radio:

• Political grandstanding
• Process vs. outcome
• Understanding your base customer
• Projecting bias
• Non-profit work

Mentions & Resources:

• Ann Mei Chang
• The Lean Impact
• www.leanimpact.org
• The Lean Startup