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Peter Leeson is an economics professor at George Mason University and is known for connecting rational choice theory with unusual domains. He looks at human behavior as a series of puzzles that are being solved by those involved. He focuses his studies on everything from bizarre rituals and superstitions to the behavior of Caribbean pirates. Peter’s work has also been quoted as “Freakonomics on steroids.”

How does Peter come up with some of his “crazy” ideas? He likes to have a broad library to read from, particularly history books. As he reads he comes across a lot of practices that may seem outlandish to most, but fascinating to him. From there he digs deeper and finds meaning in certain practices through religion, economics, politics, etc.

Throughout Peter’s work it is clear that the main motivator driving behavior is incentives. What happens when we have government incentives vs. private incentives? Michael and Peter finish the podcast talking government intervention, wealth creation and cultural behavior driving capitalistic efforts.

In this episode of Trend Following Radio:

• Somalia pirates
• Anarchy vs. government
• Medieval law and order
• Trial by jury
• Logic of incentives
• Street hustlers

Mentions & Resources:

• Peter Leeson
• WTF?!: An Economic Tour of the Weird
• The Invisible Hook: The Hidden Economics of Pirates

Food for thought:

• Buyback Derangement Syndrome
• Rivals take more risks – Is this a good thing for money management?
• Your Fees Are Bull%$&*
• 10 Great Technical Trading Rules
• Bloomberg: Daily Profit Reporting Would End Short-Termism
• Why I use index funds
• Getting Better Every Day
• The Supreme Court Isn’t Equipped to Judge Harvard’s Discrimination Lawsuit
• Models Will Run the World
• Who’s Afraid of Abby Johnson?
• The RSI Indicator Explained
• The End of Quarterly Reporting? Not Much to Cheer About
• It’s time to put the shareholder value myth in the grave. America will be better off
• Good Things Happen in Book Stores
• Death of Active Management Has Been Greatly Exaggerated
• Zombie Index Funds Are Delivering Frightening Tax Bills
• Stock Market Is Taking Cues From the Private Market

Enjoy.

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Brooks Koepka has won three major golf championships in the last 14 months. He has had the emotional fortitude to push through the obvious pressures of being on the top, especially for being only 28 years old.

Brooks wasn’t able to go pro right out of college and moved to Europe to get his PGA tour card. He wasn’t thrilled about having to go overseas to get his chance at the pros in the U.S., but with a chip on his shoulder he used that as motivation to push forward, excel and win championships.

In this episode of Trend Following Radio:

• Emotional fortitude
• Operating outside the system
• Extreme focus
• Cryptocurrency crashes

Mentions & Resources:

• Brooks Koepka
• Soylent

Food for thought:

• What Trading Places teaches you about market efficiency
• A Blue Jays fan caught two home runs in the same inning
• The Utility of White-Bashing
• Tips for Aspiring Portfolio Managers
• Ageing in human cells successfully reversed in the lab
• Quants buoyed by rise of data science
• The Mystery Behind Tether, the Crypto World’s Digital Dollar
• Share ownership in the United States
• The Gender-Equality Paradox in Science, Technology, Engineering, and Mathematics Education
• You’re a completely different person at 14 and 77, the longest-running personality study ever has found
• High Cost Education
• How To Read More Books — A Lot More
• UBS trials Netflix-style algorithms for trading
• How Your Brokers Can Make 10 Times More on Your Cash Than You Do
• Chris Rock Explains Bias Blindness

Enjoy.

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Lawrence Krauss is a theoretical physicist and cosmologist, professor at Arizona State University, director of its Origins Project and author of bestselling books: “The Physics of Star Trek” and “A Universe from Nothing.” He is an advocate for science based data, public policy based on sound empirical data, and scientific skepticism. His goal is to reduce the influence of superstition and religious dogma in popular culture. His most recent book is “The Greatest Story Ever Told–So Far: Why Are We Here?”

When did Lawrence first discover he was a skeptic, someone who would think outside the box? He was encouraged to think for himself from a very early age. He grew up Jewish but slowly grew out of ideas that surrounded the religion. No real a-ha moment, just gradually decided that religion wasn’t something he could believe in. In 6th grade he also began doing poorly in school. His parents moved him to a different school where he subsequently did much better. Lawrence knew that he wasn’t a different person, but it was other people’s expectations that wavered how he performed. From then on, he was conscious of not letting others opinions of him bring down his performance.

Richard Feynman has played a large role in Lawrence and his studies. He is a great example of someone who did not let other’s hinder him. Feynman was charismatic, intelligent, and excited about all things new – he didn’t rely on other’s opinions. The charisma Feynman possessed, combined with the genius of his science made him the legend.

How does Lawrence describe science? It is a process rather than a collection of facts. Science helps to establish what is true from what is non-sense. It also breaks the sensible from the non-sensible. Lawrence brings this mindset into religion taking a controversial stance saying, “God is completely irrelevant to science.” He fiercely believes that the idea of religion was created as a way to explain how the world worked before we had the technology and science to know how it actually works.

In this episode of Trend Following Radio:

• Big bang theory
• Religion in science
• Simulations
• Skepticism

Mentions & Resources:

• Lawrence Krauss
• Richard Feynman
• The Greatest Story Ever Told–So Far: Why Are We Here?

Check out the preface for Trend Following, 5th Edition: How to Make a Fortune in Bull, Bear and Black Swan Markets. You can find the book here.

Feedback in:

Hi Mike,

Just a quick hello.

I wanted to say I really like your podcasts. They are raw, real and so interesting.

The intro’s are just fantastic and make me feel all kinds of emotions.

Thanks mate!

[Name]

You are welcome!