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Category: Trading 101

Ep. 303: Charles Faulkner Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Charles Faulkner
Charles Faulkner

My guest today is Charles Faulkner, an author, trader, and an expert on modeling the knowledge and performance of exceptional individuals. He was originally featured in “The New Market Wizards” by Jack Schwager.

The topic is trading psychology.

In this episode of Trend Following Radio we discuss:

  • The notion of fictional people and why famous figures in finance are “fictional”
  • The importance of narratives, stories, and metaphors
  • The halo effect and deluding ourselves
  • The difference between a story and a strategy
  • The nature of independent thinking; herd behavior
  • Ego, ignorance, and authority
  • The five different types of minds: the experiencing mind, the imaginative mind, the reasoning mind, the reflective mind, and the generative mind
  • System one and system two
  • Why words don’t change people but experience does
  • Experience base and the difference between amateur and professional traders
  • The two kinds of market wizards
  • Language in the context of the five different types of minds
  • The importance of asking “how” does the market work over “why”
  • The importance of luck and time in the case of Warren Buffett
  • Why you shouldn’t get your excitement from trading

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Ep. 302: Zbigniew Hermaszewski and Natasha Reeve-Gray Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Zbigniew Hermaszewski and Natasha Reeve-Gray
Zbigniew Hermaszewski and Natasha Reeve-Gray

My guests today are Zbigniew Hermaszewski and Natasha Reeve-Gray, two of the four founding partners of Altis Partners–a very successful systematic and primarily trend following money management firm.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • Covel’s recent experiences traveling in Asia
  • The advantages of location independence
  • Early triggers that led Hermaszewski and Reeve-Gray into the systematic trading world and away from the efficient market hypothesis
  • Why Hermaszewskii was motivated to go down the particular path he went down
  • The advantages of a physics background when applied to trading
  • Looking for predicability in the markets
  • How Altis uses predictability in the context of their world
  • The four broad types of market behavior in Altis’ program
  • Trend following and persistence
  • Inter-market relationships
  • Why there are no “manual” inputs in Altis’ systematic program
  • Portfolio construction and why Altis is different from its peers
  • Applying the same models to all markets
  • The collegial atmosphere amongst London CTAs

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Ep. 301: Jim Rogers Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Jim Rogers
Jim Rogers

My guest today is Jim Rogers, an American businessman, investor and author currently based in Singapore. He is the Chairman of Rogers Holdings and Beeland Interests, Inc. He was the co-founder of the Quantum Fund and 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 Austrian School of economics.

The topic is investment.

In this episode of Trend Following Radio we discuss:

  • Why it shows that the kind of people that travel are the kind of people you want in your country
  • Infrastructure in China
  • Stereotypes of various countries in Asia
  • China’s military
  • Current Fed policy in America
  • What “can-do” spirit can do in a state of decline
  • Why the next crisis might be worse than the last
  • The importance of language skills
  • Participating in big long-term bets with regard to countries
  • Why, if he could, Rogers would put all of his money into North Korea

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Ep. 300: Travis Jamison Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Travis Jamison
Travis Jamison

Please enjoy my monologue Michael Covel Monologue and Travis Jamison Interview with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

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Want to learn more Trend Following? Watch my video here.

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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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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