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Trading Food for Thought: August 16th Edition

Food for thought:

Enjoy.

Ep. 580: Monkey Gone to Heaven with Michael Covel on Trend Following Radio

Monkey Gone to Heaven
Monkey Gone to Heaven

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If you’re a regular listener to Trend Following Radio, chances are you’re not a fan of PC culture. Michael dives into the recent controversy over the Google employee that was fired over his 10 page manifesto on gender and race regulations.

Michael moves on and reads a quote from “The Wisdom of Insecurity” by Alan Watts–written 60 years ago and relevant more than ever today. What is the PC culture of modern day? It is the insecurities of people coming out. Michael makes the comparison between zombies and PC culture. We are literally living George Orwell’s 1984.

Michael finishes by pulling in a baseball analogy using Yankee heavy hitter, Aaron Judge. Teams have adjusted and are not throwing Judge the same pitches they were throwing in the first half of the season. He now has to take what is given, and adjust his strategy. He can’t choose what pitch the pitcher is going to throw him, he just has to take what he is given and roll with it. Same mentality goes with the stock market. When the stock market is at all time highs, people let anything go. You can’t choose where the market is going to take you, you just have to go with it and be prepared to adjust accordingly.

In this episode of Trend Following Radio:

  • PC culture
  • Bitcoin
  • Aaron Judge
  • Influence of Google
  • The Wisdom of Insecurity
  • Statistics in all parts of life

Want a FREE Trend Following Video? Get it here.

“Do you have any general advice?”

Feedback in:

Hi Michael, I’m wondering if you have any general advice for someone striving to build some secondary income sources.

The reason I’m asking you is because you’ve built up your own website, written your own books and built up your own website.

My vision is to become a trend following trader, having a website and write some books. The trend following part is actually the easy bit since it only takes capital and a back-tested strategy. The hard part is the income source that could finance continuous saving.

So on the subject of building up some kind of platform, which you obviously are a master at, do you have any general advice? It can be hard to know where to start before putting in all the hours.

Best regards,
[Name]

Become an entrepreneur. Read Linchpin by Seth Godin.

“Fire Dragon Ninja Trader…”

Feedback in:

Afternoon,

Apologies for the strange title just thought it would stand out in your inbox.

Half way through your audiobook of Trend Following. Actually bought your book a while ago and had every intention of reading them.

I am on board, I certainly had a mind shift from listening to your audiobook. If you don’t mind me drawing a parallel to religion I have looked at every type of investing as a religion, “that one is wrong, this is the true way” and the answer is similar to my religious outlook, I am atheist in that area and I am now an atheist in my investment outlook.

So to sum up, thanks. I consume your podcasts when they come out and am enjoying your books.

I am looking for successful trend traders in Australia also. And given I live in Melbourne looking at starting a group Meetup for like minded trend traders.

If your ever in Melbourne I owe you lunch.

Thanks
[Name]

Lunch sounds great!

Ep. 579: Mihir Desai Interview with Michael Covel on Trend Following Radio

Mihir Desai
Mihir Desai

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Mihir Desai is author of “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return.” Mihir is currently the Mizuho Financial Group Professor of Finance at Harvard Business School and a Professor of Law at Harvard Law School.

He wrote his new book with two goals in mind: 1. Demystifying finance and 2. Have people look at finance in a more inspirational way. After each financial bubble bursts, the public repeatedly retreats to stereotypical ideas of finance. Mihir doesn’t want to wait for a generational shift to take place for finance to be looked at in a positive light. Financial literacy has gone by the way side in schools. How do you get children to think about basic risk taking? How do you think about protecting yourself? How do you buy insurance? How do you pool your money as a family? He hopes his book may help change some views and enlighten.

Mihir explains why diversification isn’t important just in the markets, it is important to diversify in all aspects of life. As an athlete you should workout all your muscles not just pinpoint one area. Or if you are looking at your health, you should look at all aspects of your health, not just what you are eating or how you are sleeping. Broaden your outlook and diversify your time and energy accordingly.

What is Agency theory? If you give someone money to invest, why do you get the money back? Arguably this is the biggest problem in modern finance. 150 years ago most people were self employed. Nowadays we appoint people as our “agents”. We have a system where we give money to people we don’t know and expect them to take care of it. Michael and Mihir end the conversation talking about people finding their path and true happiness in life rather than doing what their parents or society has told them to do.

In this episode of Trend Following Radio:

  • Reputation of finance
  • Diversification
  • Risk management
  • Black-Scholes model
  • Behavioral phenomena
  • The magic of leverage
  • The asshole theory of finance
  • Agency theory

“Luck is a dominant force in your outcome. That is lost on a lot of people in finance.” – Mihir Desai

Mentions & Resources:

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Trading Food for Thought: August 10th Edition

Food for thought:

Enjoy.

“I believed you would appreciate my ‘oh shit’ aka ‘aha moment’…”

Feedback in:

Michael,

I am a regular listener to your podcasts. I appreciate the wide variety of incredible guests and the disparate and yet relevant topics that they discuss. I’m impressed by your ability to ask “that” question that the guest responds “no one has ever asked me that before.” It’s recognizable that you must do a lot of research prior to each interview.

One such compelling and yet disturbing interview was with Ed Seykota, podcast #355. Among other things, you discussed some major topics from his book Govopoly. His statement that things, politics/the economy/government/society, are the way they are supposed to be and that there is nothing to be done about them ran counter to my world view. I was shaken by his statement that “I don’t think there is anything to fix.” I’m a person that believes when you realize things have strayed from the correct path you fight to bring them back in line. I guess the real question is what is the correct path.

I shared the podcast with a close friend who I enjoy debating topics like these with. His response was basically that he assumed the game was over long ago and he was resigned to his fate. Again this ran counter to my belief system.

Over two years after listening to you and Ed, I was listening to “The Death of Money,” a book by another of your podcast’s alumni, Jim Rickards. About halfway through the book Jim discusses the Federal Reserve. I know that there are varying opinions on the FED and I didn’t have very much knowledge on the subject so I decided to finally breakdown and listen to “The Creature from Jekyll Island.” Holy shit! I only made it through 3 chapters before I felt compelled to listen to the Ed Seykota interview again. I’m not naïve when it comes to my understanding of how things work in America but even if a small portion of what is said in “…Jekyll Island” is true I now understand where Ed is coming from. The mechanism is too big, too entrenched, and too interwoven into the fabric of our government and society to be fought to any meaningful affect.

I just thought I would share this bit of circular podcast listening with you. I believed you would appreciate my “oh shit” aka aha moment concerning our society. Any thoughts? Have you done an interview with G. Edward Griffin? It may be interesting to hear what he has to say on the Trump era.

Thanks again for your truly insightful podcasts.
[Name]

No thoughts. I just appreciate your feedback!