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Category: Psychology

The Entrepreneurial Checklist from Michael Covel

Posted on by Michael Covel

Nancy Upton and Don Sexton, professors at Baylor University who have long studied entrepreneurs, pinpointed traits possessed by Parker and other entrepreneurs:

1. Nonconformists: lower need to conform indicating self-reliance.
2. Emotionally aloof: not necessarily cold to others, but can be oblivious.
3. Sky divers: lower concern for physical harm, but does change with age.
4. Risk takers: more comfortable taking it.
5. Socially adroit: more persuasive.
6. Autonomous: higher need for independence.
7. Change seekers: like novel approaches. This is different than 99% of all other people.
8. Energetic: higher need and / or ability to work longer.
9. Self-sufficient: don’t need as much sympathy or reassurance, but they still need to form networks so self-sufficiency need not be taken to extremes.

Same for trading. Big reasons why some Turtles did not make it.

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Great Trading Is Not Some Sixth Sense

Posted on by Michael Covel

Tom Willis, a close friend of Richard Dennis, the father of the Turtles, put it succinctly:

“Are Turtles grown, or can they be taught? Do they have a magic sixth sense or something? The jury is in, isn’t it? They’d be better off having the knowledge implanted than relying on a sixth sense. I think I could take a kid who wasn’t my son and say, ‘Do this, I’ll pay you $50,000 a year, or you’re fired if you don’t exactly follow it.’ He’d beat me every day, every week, every month and every year.”

Two books that back that notion of practice and teaching?

The Talent Code
Talent Is Overrated

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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.

Don’t Worry About How You Get a “Stake”–Just Get One

Posted on by Michael Covel

From The Little Book of Trading:

Kevin Bruce is living proof that there is no need to be in New York, London, or Chicago–flaunting a sharp business suit and trading in a sky rise. Bruce is a small-town guy from Georgia with no ancestral connection to Wall Street, who has not only made it on Wall Street but conquered it. Heed his path.

Bruce spends his time far away tucked in quiet spots in Richmond, Virginia. He works out six times a week at his local YMCA, and still drives his 1996 Ford pickup. With a net worth of nearly $100 million, he prefers to live life just as he always did before making that fortune. He is low profile. Most people have no idea of his wealth. He says, “I guess that means I’ve done a pretty good job of just being me.”

More:

While Bruce was crafty in his early trading, almost tripling his initial seed money, he was really crafty in the way he built up his $5,000 nest egg. When he was about 15, he started the practice of packing a lunch and taking it to school. The cafeteria food wasn’t great, but he could buy a lunch for just 35 cents. Bruce would meet other kids in the bathroom daily and auction off his home-style lunch. He would then eat the cafeteria lunch–and would usually net about $2. Nice trade!

Inspirational? Yes, absolutely.

Of course, you could always grab a tent, your best protest vibe and head to lower Manhattan to live at Occupy Wall Street. However, I am willing to bet the next Kevin Bruce is not hanging out there.

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.

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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.

The Quiz Daniel Kahneman Wants You to Fail

Posted on by Michael Covel

From Vanity Fair:

Plainly put, a “heuristic” is a tool we use to simplify the decision-making process. For example, if you’re driving in the United Kingdom for the first time and don’t know the traffic laws, heuristics might help you correctly assume that a green light means go and a red light means stop. By applying what you already know about driving in America, you won’t have to waste hours reading up on England’s traffic laws. However, that same heuristic could prove harmful if you start driving in the right-hand lane, against traffic. Research psychologist Daniel Kahneman–Nobel Prize winner, and the subject of Michael Lewis’s article in this month’s issue, “The King of Human Error”–spent a great part of his life’s work discovering and cataloging the heuristics people use.

Take the quiz.

Note: Oh, yes, trend following is all about heuristics.

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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.

Read Linchpin by Seth Godin

Posted on by Michael Covel

The short version:

Note: Shout to Jim Byers for the find.

You may also enjou the Speculator book on Arthur Cutten.

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.

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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.

Laurence Fletcher at Reuters Pens Diss Headline; The Media Still Marginalize Trend Followers with “Black Box” Line

Posted on by Michael Covel

Laurence Fletcher of Reuters writes “Black Box” Hedge Funds Profit in Volatile Markets”:

LONDON (Reuters) – Hedge funds run by sophisticated computer programs are profiting from large falls in stock markets and a rocketing gold price this month, even as funds managed by human beings struggle to cope with high market volatility.

Insiders say so-called managed futures funds [read: trend following], which try to latch onto market trends, are making money from declining bond yields and falling equities, as investors seek safe havens amid the eurozone debt crisis and after the U.S.’s credit rating downgrade.

These “black box” funds are up 4.2 percent so far this month, according to Hedge Fund Research’s HFRX index, while the average hedge fund is down 4.0 percent and managers betting on rising and falling stock prices have lost a hefty 7.3 percent on average.

Why does he use the word “black box”? If he was just “reporting” he would not immediately use a pejorative to describe trend followers like Winton. Bottom line, trend following is making a killing because it is sound trading strategy that performs especially well when the rest of the world ***** their pants. Why is THAT still news after all these decades?

Aug 25th Note: I asked Laurence why he used the term. His reply:

Hi Michael, thanks for your email. I’ve used ‘black box’ as a quick way to describe to the man on the street what computer-driven funds do. Why do you ask?

I asked back, “But how does that tell them? Meaning, how does the word black box tell folks what Winton does?” No word yet.

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:

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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.

Where the Black Swans Hide: Mebane Faber Opines

Posted on by Michael Covel

Mebane Faber, who was kind enough to offer positive praise for my new book Trend Commandments, takes a look at outliers here (PDF). Take a read–worth your time.

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.