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Ep. 672: Winning Big Requires Belief with Michael Covel on Trend Following Radio

The Complete TurtleTrader
The Complete TurtleTrader

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Michael shares the Preface and Chapter One of his book, “The Complete TurtleTrader.” “The Complete TurtleTrader” is a classic nature vs. nurture story starring famed traders Richard Dennis and Bill Eckhardt. Are people born with the innate ability to trade? Or can it be taught? Dennis believed that anyone could be taught to trade successful with the right set of rules, Eckhardt disagreed – and from there this epic experiment was born. These men took 23 novice traders, gave them millions and taught them how to be successful on Wall Street.

In this episode of Trend Following Radio:

  • Nature vs. Nurture
  • Efficient markets
  • Beating the market
  • Systems trading
  • Behavioral finance

Mentions & Resources:

Michael Covel’s Mind Food for Thought: June 29th Edition

Trading food for thought:

Enjoy!

Ep. 671: Bryan Caplan Interview with Michael Covel on Trend Following Radio

Bryan Caplan
Bryan Caplan

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Bryan Caplan is an economist and professor of economics at George Mason University, research fellow at the Mercatus Center, adjunct scholar at the Cato Institute, and blogger for EconLog. Bryan has written several books–his newest being “The Case against Education: Why the Education System Is a Waste of Time and Money.” His main goal for the book is for people to forget education propaganda, look at what is right in front of them and examine what they have learned first hand.

From a young age Bryan always wondered, “Why do I need to learn this stuff? I am never going to use it.” The further he got along in school the more passionate he became about that belief. Yet it wasn’t until he started studying economics that he found there were other like-minded people who thought how he was thinking.

What is the problem with everyone getting a college degree? To stand out you now need to get another degree. Credential inflation has only gone up. People are spending too many years studying subjects that do not interest them, just to graduate and never use that information again. They get multiple degrees to do a job that would have only taken a high school diploma 30 years ago. It has been ingrained in so many that the education system enriches lives. However, the wall between formal education and practical education is ever growing. Bryan doesn’t hate education, he just believes people need to be more realistic about their interests and learning capabilities.

Michael and Bryan finish up discussing Bryan’s new books coming out about poverty and immigration policy.

In this episode of Trend Following Radio:

  • Affirmative action
  • Equality without losing quality
  • College vs. no college
  • Problem solving vs. memorization
  • Inert learning
  • Integrating more play in schools

Mentions & Resources:

Ep. 670: Three Times Out of Ten Beats Millennial Madness with Michael Covel on Trend Following Radio

Michael Covel
Michael Covel

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53% of Millennials expect to become a millionaire at some point in their life. That is a lot of optimism without a lot of math. Building off that survey Michael quotes some research from a man named Ned Davis titled “Was I too Correct for My Own Good.” Ned is more pessimistic than the Millennials. He see’s the present economy as an uphill battle for making money rather than Millennials who think the money will just fall from the tree’s.

If you can stand outside the crowd and accept the notion of failure you have a great opportunity to succeed over the course of a lifetime. Imagining you are going to make a million dollars without a process is obtuse. Have a good process and stick with it. Michael ends with wisdom from “The Wisdom of Insecurity: A Message for an Age of Anxiety” by Alan Watts.

Ep. 669: Harvey Silverglate Interview with Michael Covel on Trend Following Radio

Harvey Silverglate
Harvey Silverglate

Harvey Silverglate is an events attorney with 51 years of experience practicing in courts throughout the country. Harvey is the co-founder of the Foundation for Individual Rights in Education where he serves as the current Chairman of the Board of Directors. He is also author of “Three Felonies A Day: How the Feds Target the Innocent.”

What is Harvey’s current view on the President? He is not a Trump supporter, but does not agree with Robert Mueller and how the legal system is systematically trying to pin him. What Trump has done may be politically unpalatable to some, but he is not doing anything illegal. Harvey uses Mueller to show how an overreaching prosecutor bent on getting his agenda done–get’s it done. Justice, for the most part, has nothing to do with the American legal system today.

Harvey feels we are in an era where people look at the law in an objective way rather than with passion. Colleges pump out politically correct lawyers afraid of standing for what they believe in. Harvey is fighting to reverse that trend.

In this episode of Trend Following Radio:

  • Trump vs. Mueller
  • Overreaching prosecutors
  • Motivations of law enforcement
  • Flaws in the justice system

“We are in a time of troubles right now and it is the obligation of every citizen to rise above it.” – Harvey Silverglate

Mentions & Resources:

“The trend is the trend, no emotion, no guessing…”

Feedback in:

Dear Michael,

I purchased the book, signed up for the emails and I can tell you emphatically the ONE thing I got from all of it is clarity. I used to worry about the news, what the President tweets, the day of the week and other assorted voodoo to make trades. I even signed up for a few services that spewed some of the most indecipherable gibberish while impressing me with their almost perfect timing. I no longer care about any of that. The trend is the trend… no emotion…no guessing.. I’m now pleasantly trading the trend and not worrying about the external nonsense.

Thanks. More resources to consume here.

Reminiscences of a Stock Operator by Edwin Lefèvre
Reminiscences of a Stock Operator by Edwin Lefèvre

“I loved the idea that I could be taught and/or learn the mechanics of trading…”

Feedback in:

Mike,

I know this is way after you asked. I started it initially and put in draft only to re-visit it tonight. No excuses, just didn’t get to it. Hope you are well!

Answers to your questions:

1. What methods or principles were you applying before?

I was applying everything other than trend following. Technical analysis (head-and-shoulders, wedge, etc.), trading too big, trading too often/much, using no data to back up any decision – just trading from the hip.

2. What changed you? Why did you switch?

I have a science background (bio major in college then grad school as a Physician Assistant) so I like to have data to back up arguments, reasons to take action or change behavior, etc. My first intro to Trend Following was “The Complete TurtleTrader“. I loved the idea that I could be taught and/or learn the mechanics of trading. I then really dug in and read “Trend Following” which allowed me to really see the way this type of system could work. There is centuries of data to backup the systems validity and many currently operating managers who are successful in its application (Salem Abraham, Dunn, Henry, Bruce, etc.). These reasons were more than enough for me to commit to learning the technique.

3. How did I help you?

After blowing up my first trading account I changed to trend following. I employed a channel breakout system based on daily closes. I was doing this in a manual way by scanning the markets I was trading every night and placing trades when the system indicated. I struggled with my rules during this period. How EXACTLY did you employ good risk management? What EXACTLY was a good breakout time period (20 days, 30 days, 50 days, 100 days?)? I had a hundred questions that needed more clarity. I then decided to buy your package of information/CDs to really get things dialed in.

I implemented a very comprehensive trading system using your CB system outlined in the material from 2013-2017 when my broker was shut down in the US (FXCM) and I needed to close all my trades down and transfer my account. I took that time to find some way to automate the system with a “robot”, software, whatever you want to call it. The reason for the automation is that I felt like my performance suffered from missing trades. I was not getting hurt by the losing trades because I was using good risk management based on ATR. I was getting hurt by MISSING the good trades, which I F’ing hate! That is the thing that I couldn’t deal with the most was missing a trade because I was on a business trip, or family vacation or I was just being human and not checking it for any number of a hundred reasons.

I have automated my system which answers all the important questions: when to buy, how much to buy, when to get out. My major roll now is just monitoring the system and letting it take and close trades.

Other ways you have helped me:

1. Trend following becomes a way of life… I’ve started looking at everything with the question, “what’s my risk” or “what’s the worst case scenario here” and “what am I willing to lose on taking this chance or bet”. This can be asked of ourselves in relationships, raising kids, sports, etc.

2. You have introduced me to so many amazing thinkers and ideas through your podcast. These have been life changing in some cases. One example: You interviewed a guy named Jason Calacanis who is an Angel investor (I had no clue you could do this!). I bought his book, joined his syndicate and now I’ve invested in 3 startup companies and I’m going out to his “Angel University” this summer to learn more about the trade of Angel Investing. Pretty amazing stuff!

3. You’ve given me advice about travel and were kind enough to give me some ideas when I visited Tokyo.

4. You remind me all the time that you can have a successful business and be “location independent” by living in Vietnam for the past several years.

5. You used an idea that I sent to you as the subject of one of your podcasts (Bezos is a trend follower)… pretty cool!

I’m looking forward to making it to Vietnam and sharing a beer with you!

Thanks for everything. I continue to listen to every episode of the podcast even if it’s a month late. They all have something to offer to the person willing to really listen. In fact, I think the ones that I’ve gone into thinking I wasn’t going to like are the ones I’ve gotten the most out of!

Keep kicking ass,
[Name]

Thanks!

Great feedback. More on how to trade the system here.

Up and Down
Up and Down