I thought you might like this. I found a cute little paragraph about trend following (use of technical analysis) in CFA level 2 Schweser notes. Love the last sentence:
Cheers,
Peter Schenk, Portfolio Manager, CIM
Trend Following Confusion
Thanks. Not surprising. Misinformation on top of misinformation.
Please enjoy my monologue The Mob Rules with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.
In this episode of Trend Following Radio:
Bombay cotton market 1865
Bubbles and mania
Profiting from the speculation
Having a plan in place
“All speculative follies go down the same path. The players involved look the same. They act the same. They talk to same. The only thing that is different are the names. It’s always a new technology. It’s always an innovation.” – Michael Covel
You might not be willing to devote the time and energy to understand how electricity actually works, or the mechanisms of your democracy, or the insights behind irrational decision making. More likely, you don’t want to expend the emotional labor to push through feeling dumb as you dig deep on your way to getting smart.
That’s always been an option. You can just use the tool without understanding it, copy the leader without realizing where she’s going, follow instructions without questioning them.
You can choose to be a cog in a machine you don’t understand.
If that’s working for you, no need to change it.
It made me ponder: trust the Fed, trust buy and hold, etc. If it’s working for you, no need to change it.
My guest today is Jim Rogers, an American investor and financial commentator based in Singapore. Rogers is the chairman of Beeland Interests, Inc. He was the co-founder of the Quantum Fund and Soros Fund Management. He was also the creator of the Rogers International Commodities Index (RICI). Rogers does not consider himself a member of any school of economic thought, but has acknowledged that his views best fit the label of the Austrian School of economics.
The topic is central banking system.
In this episode of Trend Following Radio we discuss:
Negative interest rates
Central banking systems
Market crashes
The impact of unintended consequences
Preparing for the future
“For the last 30 years look at who we have had down there [as the head of the Federal Reserve]. They have all been academic and political hacks.” – Jim Rogers
…this is exactly how chess players improve most effectively…by studying the games of grandmasters, trying to reproduce them move by move, and, when they choose a move that is different from what the grandmaster chose, studying the position again to see what they missed. [Ben] Franklin [known chess fan) could not apply the same technique to chess because he had no easy access to the games of masters. Almost all of them were in Europe, and at the time there were no books with their collected games for him to study. If he had had some way to study the masters’ games, he might well have become one of the best chess players of his generation (Source: Peak).
Great thought. Exactly why I put pro trend following performance in my books. His wisdom is also the background foundation of turtle trend following success.
Please enjoy my monologue Disruptive Innovator with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.
In this episode of Trend Following Radio:
Math in football
Thinking like a contrarian
Risk management
Fundamentals
“I am the type of guy that believes humans make mistakes when they make decisions off of emotion.” – Kevin Kelley
“Doing something different just to be different, that can’t sustain itself. It has to contribute to winning or it falls by the wayside.” – Kevin Kelley
Please enjoy my monologue The Pay People Deserve with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.
In this episode of Trend Following Radio:
Unemployment
Minimum Wage
Ayn Rand
American economics
The seen and unseen consequences of a law
Libertarianism
“Given that minimum wages hurt the very people they are supposed to help, by restricting workers’ freedom, reducing their choices, and increasing unemployment, One must wonder why, despite decades of consensus among economists, politicians and pundits continue supporting these destructive regulations. They often do so because they want ‘send the right message’ about the ‘kind of society’ we want to live in. While this appears well-intentioned, the principle underlying such arguments is actually quite perverse: that it is better for us to feel good than to actually do good.” – Daniel Bier
“Prices are not levels that set value, they are metrics that reflect value.” – Anthony Davies
