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Ep. 298: Emanuel Derman Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Emanuel Derman
Emanuel Derman

My guest today is Emanuel Derman, a South African-born businessman and writer, best known as a quantitative analyst. Derman, who first came to the U.S. at age 21, in 1966, is currently a professor at Columbia University and Director of its program in financial engineering. Until recently he was also the Head of Risk and a partner at KKR Prisma Capital Partners, a fund of funds.

The topics are his books My Life As A Quant: Reflections on Physics and Finance and Models Behaving Badly.

In this episode of Trend Following Radio we discuss:

  • Why economics can be an ‘incestuous’ field
  • Economics as a moral science
  • Why all four of the US investment banks were not allowed to go by the wayside
  • Derman’s background and his PhD in theoretical physics
  • Derman’s early eye-opening experiences at Goldman Sachs
  • Model building, and how Derman was indoctrinated into the world of model building
  • The financial model and science and the physics model and science
  • Short volatility models vs. long volatility models
  • How one estimates risk
  • Models vs. theories
  • Whether Derman finds a certain amount of pushback from others in the academic community

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Who Can you Trust?

Posted on by Michael Covel

What advice do you take and what advice do you throw to the curb:

Hi Michael, I listen to your podcasts daily, great stuff! I was reading this article by Tony Robbins about taking control over your money, and where to start. He lists “tips from 12 of the most colorful and brilliant minds in finance”. Paul Tudor Jones II, Ray Dalio and Warren Buffet are among some of the people listed and quoted in the article. There is definitely some good advice in there, but also some worthless advice and nonsense statements in my mind. This is where ones ability to filter out the gold is important. Thought you might find it interesting, that’s all.

Have a good weekend
[Name]

Thanks. Diverse group of successful men, but so diverse they will have contradictory advice on some issues.

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Jean-Philippe Bouchaud: Tail Risk Premia vs. Pure Alpha

Posted on by Michael Covel

Jean-Philippe Bouchaud, Chairman of Capital Fund Management, passed along a new paper Tail Risk Premia vs. Pure Alpha.

How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
• Crisis Times
• Trading Technology
• About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Ep. 297: Gabriele Oettingen Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Gabriele Oettingen
Gabriele Oettingen

My guest today is Gabriele Oettingen, a Professor of Psychology at New York University and the University of Hamburg. Her research focuses on how we think about the future, and how this impacts cognition, emotion, and behavior.

The topic is her book Rethinking Positive Thinking: Inside the New Science of Motivation.

In this episode of Trend Following Radio we discuss:

  • Positive thinking, optimism and over-confidence
  • How positive thinking can reign in your sense of urgency
  • The effect of positive thinking on us from a scientific viewpoint
  • Whether Oettingen views her work as an attack on the self-help industry
  • Oettingen’s process and how she views data
  • The WOOP (Wish, Outcome, Obstacle, Plan) process
  • Understanding each component part of WOOP
  • “Ah-ha” moments in Oettingen’s early development
  • The idea of WOOP as mental contrasting
  • Non-conscious processes

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Black Swan Events: How Rare Are They Really?

Posted on by Michael Covel

Feedback in:

Mike, I had to send this to you. I snapped this photo near my property at my neighbor’s farm. TWO black swans!

Enjoy!
[Name]

Thanks!

How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
• Crisis Times
• Trading Technology
• About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Ep. 296: Ewan Kirk Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Ewan Kirk
Ewan Kirk

Michael Covel interviews Ewan Kirk on today’s podcast. Kirk is the head of Cantab Capital and has brought his firm from $30M AUM in 2006 to over $5B today. Kirk employs several strategies but clearly uses a trend following foundation. Covel and Kirk discuss how consistent and predictable profits are the Holy Grail–you’re never going to get there. Covel and Kirk also explore Kirk’s background, and how someone with a PhD in mathematical physics ends up going to work for Goldman Sachs; why computer programming is “today’s literacy”; standing out from the crowd; trend following in the European scene vs. America; weighting positions based on risk; talking to clients and explaining that losses are statistically inevitable; whether the demand for discretionary traders is waning; how discretionary traders look at a trader like Kirk who is 100% systematic; why discretionary intervention in a systematic trading strategy disqualifies it from being truly systematic; proving a strategy as broken rather than proving that it’s right; why randomness is everything; uncertainty and convictions about technique; capturing the realism of the world in your trading strategy; what actually benefits the economy, society, and the world; seeking client feedback and understanding a client’s drivers; and the importance of consistent marginal improvements.

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Ep. 295: Gerd Gigerenzer and Brian Wansink Interviews with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Gerd Gigerenzer and Brian Wansink
Gerd Gigerenzer and Brian Wansink

My guests today are Gerd Gigerenzer and Brian Wansink.

Gigerenzer is currently director of the Center for Adaptive Behavior and Cognition (ABC) at the Max Planck Institute for Human Development and director of the Harding Center for Risk Literacy.

Wansink is the John Dyson Professor of Marketing and the Director of the Cornell Food and Brand Lab in the Department of Applied Economics and Management at Cornell University.

The topics are Gigerenzer’s book Risk Savvy: How to Make Good Decisions and Wansink’s book Slim by Design: Mindless Eating Solutions for Everyday Life.

In this episode of Trend Following Radio we discuss:

  • Covel and Gigerenzer discuss the differences between Daniel Kahneman and Gigerenzer’s views; heuristics vs. statistics; the notion of medical check-ups, prostate cancer, and the PSA test; taking risks, and instincts vs. expert advice; relative vs. absolute risk; Benjamin Franklin’s ledger, heuristics, and romance; intuition, facts, unconscious intelligence, and gut decisions; being risk savvy and ordering in upscale restaurants, why Risk Savvy is an alternative to many other outlooks; the two tools to being risk savvy; the gaze heuristic and athletics; complex problems and simple heuristics.
  • Covel and Wansink discuss weight and obesity; our genes and environment as an effect on our health; “doing what skinny people do” and studying buffets; modeling the behavior of slim people; the advantages of chopsticks; the power of the grocery shopper of the household; triggers and tips to avoid unhealthy behavior that happens in restaurants; correlations between where you sit in a restaurant and eating choices; the three types of people in the context of nutrition; the influence of the environment on our eating habits; being slim by design vs. being slim by willpower; pursuing happiness vs. pursuing a purpose.

Listen to Susan Peirce Thompson’s views on dealing with willpower and using healthy eating habits to maintain the mental strength required for making financial decisions.

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