My guest today is Anders Ericsson, a Swedish psychologist and Conradi Eminent Scholar and Professor of Psychology at Florida State University who was internationally recognized as a researcher in the psychological nature of expertise and human performance. Ericsson studied expert performance in domains such as medicine, music, chess, and sports, focusing exclusively on extended deliberate practice (e.g., high concentration practice beyond one’s comfort zone) as a means of how expert performers acquire their superior performance.
The topic is his book Peak: Secrets from the new science of expertise.
In this episode of Trend Following Radio we discuss:
Discipline and practice
Solo and group practice
Flow state
Social Motivation
The late birthday rule
10,000 hours of practice
Nature vs. nurture
Brain plasticity
“To optimize the benefits of deliberate practice you have to be in control of your own training.” Anders Ericsson
My guest today is Tom Bilyeu, an American Entrepreneur. He is best known as the co-founder of Quest Nutrition and the co-founder and CEO of Impact Theory.
The topic is entrepreneur.
In this episode of Trend Following Radio:
Discipline and practice
The Quest belief system
Escaping the Matrix
Tom Bilyeu’s ultimate reading list
Being authentic
Obesity
Autopilot thought process
International food regulations
Letting go of being right
Reaching your true fans
“Do that which moves you towards your goals. Do not do that which moves you away from your goals” – Quest belief system
“You can learn what you need to learn, and if you are willing to accumulate enough skills, there really is no limit to what you can do.” – Tom Bilyeu
You must use trend following like technical analysis as a tool not a religion. I do believe quantitative easing is good because it drives the stock markets up and as a trader I make my money and pocket when the stocks are going up not with philosophy therefore I believe in Wall Street’s industry and the SEC and the Fed and US government whether good or bad ethically as they are a fact all those so called gurus predict or praise one thing and make money as counterparts as trading is binary buyer or seller by taking the opposite direction/position example Bill Bonner predicted in Money Week mag a few years ago that QE would lead to financial disaster leading to hyperinflation but there is no unemployment right now in the us 5 % there is a growth 3 % / year the highest standards of living in the world big house / cars etc. it is an affluent society but for a tiny minority of lazy couch potato people of course you get my point the truth is none can predict the future and if directors from the fed with a background of PhD in economics from Harvard the most brilliant people cannot they have the best reports from administrations then gurus cant either.
I believe as a taxpayer QE is fair because it drives my stocks up on the market and i want my money back because unemployed workers do not pay taxes and even if QE does not create enough jobs in the real world economy who cares
The worker should learn how to play the game and risk his money on the stock exchange instead of watching football games on TV all day
No pain no gain.
There will always be losers and winners and it is a matter of choice
My feedback:
1. Trend following is a tool. You have some misunderstandings you can correct if you are curious.
2. There are some points in your rant I think might make sense, but other parts are incoherent.
“Listened to your interview with Bill Bonner. Your comments on economists made me think of this old joke. Click on image and move mouse: here.”
Summed up nicely:
“The fed’s try and stretch the addiction out as long as possible. Why? Because running a rehab clinic can be a good business, especially if the patients never recover. Patients are never allowed to hit bottom. They never get better, and the quacks bring more and more wealth and power to themselves and their friends.” – Bill Bonner
My guest today is Steven Pinker, a Canadian-born American cognitive scientist, psychologist, linguist, and popular science author. He is Johnstone Family Professor in the Department of Psychology at Harvard University, and is known for his advocacy of evolutionary psychology and the computational theory of mind. He covers phenomena that have traditionally not been looked at scientifically such as: visual perception, war and peace, and differences in writing styles. He has authored numerous books with his most recent being, “The Sense of Style.”
The topics are his books The Sense of Style: The Thinking Person’s Guide to Writing in the 21st Century and Blank Slate.
In this episode of Trend Following Radio we discuss:
Evolution
Natural selection
War statistics
Cognitive science
Evolutionary psychology
“I don’t think there is any single procedure called the scientific method. I think that science just is the attempt to explain phenomena using explanations that you can show to the best of your ability are true.” – Steven Pinker
Trend Followers don’t shy away from losses. Losses provide valuable feedback that helps them improve as traders. Sometimes, losses occur despite solid strategies and perfect execution.
Such is life when participating in markets. Some trend followers break down, change their approach and pursue a career of trying to find consistent gains day after day, month after month, year after year.
Every so often, all traders experience a painful losing period that can last a while. Trend Followers, after conducting endless hours of research, know that their strategy will experience losses from time to time. They accept this from the very beginning before they even make a trade with real money.
In general, investors take losses personally and purposely try to avoid them. They have positive intentions though. They want to protect themselves from the feelings that come up during losses; that sinking feeling in their stomach; headaches; cold sweats that comes with anxiety.
Fundamentalists avoid losses; instead, preferring to be right and feel smart. As a result, they sometimes ignore the reality and hold onto losing positions – sometimes long enough to put themselves out of business. Here’s an all too common exchange between two very different types of investors – Fundamentalists and Trend Followers.
Fundamentalist: “XYZ has to rise. The fundamentals are strong – earnings growth is positive; valuation is reasonable; it’s positioned well in a vibrant industry.”
Trend Follower: “Hmm…well, despite your optimism, I notice the stock price moving downwards.”
Fundamentalist: “Yea, but this is a temporary dip. It has to go back up at some point. The fundamentals are too good for it to stay down.”
Trend Follower: “Maybe, but what if it keeps going down? What if it’s strong fundamentals aren’t enough to make it move higher? What if the broader market fundamentals and sentiment drag it down? Your analysis won’t mean sh*t then.”
Fundamentalist: “You’re a simpleton technical trader. You care only about the price now. You do not and cannot see the stock’s future potential like me. I know this company inside and out. Based on it’s fundamentals, this stock will be a homerun one day. Any dip in price should be viewed as a buying opportunity.”
Trend Follower: “I don’t need to know the fundamentals if I know the price. Nothing else matters besides the price. If I buy a stock that appreciates in price, I make money regardless of what the fundamental story is. Plus, earnings reports can be easily manipulated. The stock price is real; it cannot be faked; it’s the only thing that can be trusted.”
Fundamentalist: “Whatever, trend boy.”
Back to avoiding losses – in all likelihood, investors avoid losses because they don’t want to accept them as part of the deal. They simply want to win all the time. Those who do the work, and who don’t live in fantasy land, know that this is impossible to achieve, so they prepare for losses by budgeting for them.
As a result, these investors, humbled by the facts that research taught them, learn that budgeting for losses can help improve overall returns better than trying to avoid losses altogether.
Trend Followers accept losses as part of the process – a tax, if you will, on the path of achieving long-term success. Before placing a trade, trend followers assess the market, its behavior and their financial condition (what positions they currently hold; risk exposure in each position, sector and portfolio overall; their capital base).
Trend Followers take risks within their budget, so if a particular trade does not work out, they lose an amount within our budget. When you take risks within your budget, you survive; you survive through the dips with enough capital to take advantage of the big opportunities when they come along.
Make losses affordable and learn to live with them, especially you win-at-all-costs alpha males out there. Take small ones more frequently, so you can avoid big ones less frequently.
Michael G. Melissinos
Melissinos Trading, LLC
www.melissinostrading.com
Note: You can also find an appearance by Michael on my podcast.
From Bondi Beach Australia thank you for a fantastic Podcast, I listen to you as I drive my 400 ton mining truck, you have added much knowledge to much trading journey and the great thing is I have many more to get through. Cheers.
