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Category: Interviews

Ep. 76: Jack Schwager Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Jack Schwager
Jack Schwager

My guest today is Jack Schwager, a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. Schwager is one of the founders of Fund Seeder, a platform designed to find undiscovered trading talent worldwide and connect unknown successful traders with sources of investment capital. Previously, Schwager was a partner in the Fortune Group (2001-2010), a London-based hedge fund advisory firm.

The topic is his book Market Sense and Nonsense: How the Markets Really Work (and How They Don’t).

In this episode of Trend Following Radio we discuss:

  • How Schwager was able to make “Market Sense and Nonsense” accessible to both professionals and laymen and touch on some of the subjects contained within: market fallacies and misconceptions
  • The idea of cable news “experts”, and what would happen if you actually followed all of the picks made by people like Jim Cramer and other talking heads
  • Comparing performance streams against each other, and why you have to consider more than just the number
  • Volatility vs. risk
  • If coming to a good risk adjusted return is based more on a scientific approach or personal preference
  • Leveraged ETFs
  • The fear of hedge funds
  • The idea of leverage and why much of “Market Sense and Nonsense” was built around trying to understand it
  • Why fund-to-fund managers putting a large group of trend following traders together in one portfolio might not be a wise move
  • Presidential election and discuss why whoever is selected to be the next president might not make much of a difference in the markets

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Ep. 73: Peter Brandt Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Peter Brandt
Peter Brandt

My guest today is Peter Brandt, a trader who has been in the commodity trading space since 1976. He’s traded his own proprietary account from the late 1970s until today and is currently entering the hedge fund world by running a multi-CTA fund-of-funds. Brandt got his start in Chicago trading commodities and working at the Chicago Board of Trade for Continental Grain Company.

The topic is his book Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading.

In this episode of Trend Following Radio we discuss:

  • How the accident influenced his trading and how great lessons can be learned through adversity
  • The idea of trading a five-minute chart pattern vs. a weekly chart pattern
  • The biggest mistakes you can make as a novice trader
  • Averaging a loser
  • Risk management and the right amount to risk on any trade
  • Upside volatility and the fantasy of a straight line up of profit growth
  • The importance of reducing the incessant head chatter and living in the moment now

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Ep. 68: Mark Shore Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Mark Shore
Mark Shore

My guest today is Mark Shore, a trader and educator whose main area of expertise is managed futures. Shore has an MBA from the University of Chicago, was the former head of risk at Octane Research (over a billion AUM), was the former COO of VK Capital (a subsidiary of Morgan Stanley), and now is an adjunct professor at DePaul University teaching the only accredited course on managed futures in the country.

The topic is his paper Decoding The Myths of Managed Futures.

In this episode of Trend Following Radio we discuss:

  • Shore’s experience in getting the “a-ha” moments out of his students when teaching managed futures, and how he brings his students into the world of managed futures
  • How and why those working in the CTA/managed futures/trend following space have a firm grasp on risk management that exceeds the understanding of competitors (i.e. mutual funds)
  • How the term “managed futures” (which refers to the instrument and not the strategy) might be problematic
  • Skewness
  • Drawdowns
  • Why managed futures performance is famous for doing extremely well when chaos unfurls
  • Why the majority of the mutual fund industry hasn’t adopted CTA strategies
  • The issue of survivorship bias
  • Why certain people can’t wrap their arms around strategies not based on fundamental analysis
  • The emotional elements of trading
  • Other experiences while working at VK Capital

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Ep. 63: Darren Kottle Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Darren Kottle
Darren Kottle

My guest today is Darren Kottle, the Chief Investment Officer of Caddo Capital Management LLC, and sub-advisor to an alternative/hedged strategy at Catalyst Funds.

The topic is hedge fund.

In this episode of Trend Following Radio we discuss:

  • Kottle’s early experiences in the market, starting off in a discount stock brokerage
  • His experiences working with a Nobel laureate Kenneth Arrow at Stanford
  • The sources of trend following profit
  • George Soros’ concept of reflexivity
  • The importance and believing in your system to the core
  • Thoughts on investment banks
  • The pivot point for Kottle to fully embrace a trend following system
  • What the Turtle story did for him when he first heard it
  • Uncertainty vs. being wrong
  • The percentage of people that truly understand that “it’s all reflected in the price”

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Ep. 57: Dr. Alexander Elder Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Dr. Alexander Elder
Dr. Alexander Elder

Alexander Elder is on the podcast:

My guest today is Dr. Alexander Elder, a trader, educator and author. Dr. Elder’s unique and inspiring story starts with his dissatisfaction with the system in his home country of Estonia. At 23, while working as a ship’s doctor, he jumped a Soviet Union ship in Africa and received political asylum in the United States; he also ended up on the KGB’s wanted list. Dr. Elder worked as a psychiatrist in New York City and taught at Columbia University.

The topic is his book Trading for a Living: Psychology, Trading Tactics, Money Management.

In this episode of Trend Following Radio we discuss:

  • Experience as a psychiatrist provided him with a unique insight into trading
  • Psychology of trading
  • How a high degree of education can sometimes be a hindrance
  • The most dangerous personality traits to have as a trader
  • The stages of trader development
  • The importance of money management
  • The importance of keeping records and diaries of your trades
  • The notion of exiting long positions and shorting weakness
  • The similarities and differences between traders in different geographic locations
  • How financial markets can be like manic depressive patients

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Ep. 56: Steve Brechtel Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Steve Brechtel
Episode 56 Steve Brechtel

My guest today is Steve Brechtel. Over the past 20 years Brechtel has worked as a trader for three of the top 100 hedge funds in the world: Trout Trading (now Tewksbury Capital) in Chicago and Bermuda, Crabel Capital in Milwaukee, and now Two Sigma in NYC (a $10 billion fund) — all short-term systematic funds.

The topic is trading.

In this episode of Trend Following Radio we discuss:

  • Brechtel’s history, from his beginnings roughing it as a Pizza Hut manager while working an insurance job, to finding his way to Monroe Trout, to working at Crabel, to his career at Two Sigma today
  • History in Virginia
  • Why he was hired at Monroe Trout in the first place as a new trader and the advantages of having a beginner’s mind
  • The difference between the short term/systematic traders that Brechtel worked for and the longer term trend following Covel talks about
  • The six strategies Brechtel learned trading the pits
  • What’s changed and what’s the same now that technology has evolved
  • Ayn Rand, objectivism, and Trout
  • Brechtel’s transition from Trout to Crabel, and the differences between these two firms
  • His work at Two Sigma today
  • Brechtel’s screenplay (“Unhedged”) using hedge funds and high finance as its backdrop
  • Writing the script, how his movie differs from other Wall Street movies
  • Covel talks with him about his experience in making his own documentary, “Broke: The New American Dream”

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Ep. 54: Steve Burns Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Steve Burns
Steve Burns

My guest today is Steve Burns. Burns has been investing and trading in the stock market successfully for many years. He is the author of seventeen books about the stock market. He is one of this site’s top reviewers for books about trading and investing having read and reviewed several hundred books.

The topic is his book New Trader, Rich Trader: How to Make Money in the Stock Market.

In this episode of Trend Following Radio we discuss:

  • Tech bubble of the late 1990s
  • Chapter titles in Burns’ book
  • Problems with buy and hold
  • How “rich” can be a mindset rather than a number
  • The role of luck and circumstance in trading
  • Staying away from the need for constant action and waiting for the “fat pitch”
  • Developing a robust system
  • Staying away from predictive trading approaches
  • Viewing the markets as a video game as a means to help with trend trading understandings

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