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“I suppose that this is a weird request…”

Feedback in:

Hi Michael,

I am a member in the [country] military and have been serving for the past 12 years and I am looking to change careers in the next 5-8 years. I was wondering if you have any contacts here in [country] that are Trend Traders that could possibly be open to mentorships/coaching?

The reason why I ask is I have read your books “The Complete TurtleTrader”, “Trend Commandments” and I am currently reading “Trend Following” All have been really insightful and have given me a direction in the type of trader I want to be. I understand that there is a lot that I can learn on my own, but to be able to learn from someone with a wealth of experience and who is currently “in the business” and can give me an opportunity to learn through osmosis would be highly beneficial.

I suppose that this is a weird request and I assume that you may have received requests like this before.

Any help would be greatly appreciated.

Cheers
[Name]

Not an odd request. It’s what I do. You may consider a next step.

“I’m a big fan of your podcast and want to start trend trading…”

Feedback in:

Hi Michael,

I’m a big fan of your podcast, and want to start trend trading. I’m a UCF student and actually just met Toby Crabel as he did a private meetup with the young investors club at UCF. I’ve been trading since January, but just blindly trading. I’m going to quit my Internship at Lockheed starting January to take the risk of being an independent trader for my last semester before having to start to pay off my student loans. Hopefully you can show me the right steps to being a successful trend follower.

All the best,
[Name]

Starting steps: Go. And my podcast: Listen.

Jean-Philippe Bouchaud: “Black Was Right: Price Is Within a Factor 2 of Value”

Jean-Philippe Bouchaud (see book and podcast) offers new research. Excerpt:

“We provide further evidence that markets trend on the medium term (months) and mean-revert on the long term (several years). Our results bolster Black’s intuition that prices tend to be off roughly by a factor of 2, and take years to equilibrate. The story behind these results fits well with the existence of two types of behaviour in financial markets: “chartists”, who act as trend followers, and “fundamentalists”, who set in when the price is clearly out of line. Mean-reversion is a self-correcting mechanism, tempering (albeit only weakly) the exuberance of financial markets.”

Download.

Jean-Philippe Bouchaud
Jean-Philippe Bouchaud

Memoirs of Extraordinary Popular Delusions by Charles MacKay

Read the classic from 1841 that outlines manias across the human condition.

Lessons that never die.

1. Memoirs of Extraordinary Popular Delusions by Charles MacKay Volume 1 (PDF)

2. Memoirs of Extraordinary Popular Delusions by Charles MacKay Volume 2 (PDF)

Excerpt: Extraordinary Popular Delusions and the Madness of Crowds is an early study of crowd psychology by Scottish journalist Charles Mackay, first published in 1841. The book chronicles its subjects in three parts: “National Delusions”, “Peculiar Follies”, and “Philosophical Delusions”. MacKay was an accomplished teller of stories, though he wrote in a journalistic and somewhat sensational style.

Memoirs of Extraordinary Popular Delusions by Charles MacKay
Memoirs of Extraordinary Popular Delusions by Charles MacKay

Trading Food for Thought: November 20th Edition

Food for thought:

Enjoy.

Ep. 608: Ed and Marty Give Clues on Trend Following Radio

Ed Seykota
Ed Seykota

Subscribe to Trend Following Radio on iTunes

Michael explores meeting the achievers, great coaching and brings back two trend following legends from the archives–a must listen.

In this episode of Trend Following Radio:

  • Meeting the achievers–how?
  • Coaching
  • Trend Following Legends

Mentions & Resources:

Want a FREE Trend Following Video? Get it here.

Why Trend Following Works from Larry Swedroe

An excerpt from Larry Swedroe’s new piece about trend following:

[Trend following] performance was remarkably consistent over an extended time horizon, one that included the Great Depression, multiple recessions and expansions, multiple wars, stagflation, the global financial crisis of 2008, and periods of rising and falling interest rates.

[Trend following] annualized gross returns were 18.0% over the full period, with net returns (after fees) of 11.0%, higher than the return for equities but with approximately half the volatility (an annual standard deviation of 9.7%).

[Trend following] net returns were positive in every decade, with the lowest net return, at 4.1%, coming in the period beginning in 1919.

There was virtually no correlation to either stocks or bonds. Thus, the strategy provides a strong diversification benefit. After considering all costs and the 2/20 hedge fund fee, the Sharpe ratio was 0.76. Thus, even if future returns are not as strong, the diversification benefits would justify an allocation to the strategy.

Read more.