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Ep 401: Ben Carlson Interview with Michael Covel on Trend Following Radio

Ben Carlson
Ben Carlson

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On today’s episode of Trend Following Radio Michael Covel interviews Ben Carlson. Ben is the Director of Institutional Asset Management at Ritholtz Wealth Management. He first gained fame with his blog, “A Wealth of Common Sense.” Following his blog success Ben wrote the book, “A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan.”

“A Wealth of Common Sense” is geared toward helping investors gain a simpler decision making process and developing a clearer way of thinking. This is where Michael and Ben take the conversation on today’s podcast. Ben says that people usually become their worst enemy while trading. Cycle to cycle or fad-to-fad is how so many plan their investing rather than building their trading off a solid foundation. Studying the emotional side of trading is a relatively new concept that has sprung up in the last couple decades, which causes people to overlook the necessity of its study in their trading. Ben says, “Envy is the worst of all sins because nobody enjoys doing it.” People are constantly tempted to follow what others do. With the amount of information and “noise” thrown around today we are more informed than ever but most aren’t putting that information in the right context.

Ben uses the documentary, “Jiro Dreams of Sushi” as a great example of having faith in a system matched with an extraordinary amount of discipline. There is nothing fancy about Jiro and his sushi. It is his discipline over the years to perfect his craft that has made him arguably the best sushi chef in the world. Whether it is creating the perfect meal or creating the perfect system, you have to give it time to work. Ben says that discipline is just not there for most people. Constantly asking, “Does this still work? Why should I continue to follow it?” Lastly Mike brings up the phrase “Market timing.” On a daily basis there is someone on T.V. predicting what will happen. The two talk about lack of understanding among investors, relating investment advisors as shrinks to their clients. They are not managers of money but managers of people.

In this episode of Trend Following Radio:

  • Diversification
  • The purpose of a long only commodities investment
  • Speculation
  • Index funds
  • Having a plan
  • Risk and Reward
  • Saying no

“You can’t invest in the market as you wish it would be, you have to invest in it as it is.” – Ben Carlson

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Ep. 364: Simplicity Trumps Complexity with Michael Covel on Trend Following Radio

Simplicity Trumps Complexity with Michael Covel on Trend Following Radio
Simplicity Trumps Complexity with Michael Covel on Trend Following Radio

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An article recently appeared in Forbes, entitled “What Jurassic World Can Teach Investors About The Stock Market”. In it is an interview with Ben Carlson on why simplicity trumps complexity when it comes to investment strategies. Although not explicitly about trend following, the article brings up points about the poor historical performance of financially engineered assets and the superiority of simple systems.

In this monologue, Michael Covel talks about his desire to seek the truth, and the importance of taking personal responsibility for your actions. He also breaks apart the Forbes article on simplicity vs. complexity, and the logical reasons why trend following systems have historically performed better than others.

Also in this episode: the recent study that shows that metal-heads from the 80s are happier and better adapted than their peers.

In this episode of Trend Following Radio:

  • Why simple strategies are better than complex ones
  • The importance of defining your risk as a number
  • How risk and reward are two sides of the same coin
  • Why going for the average is a losing strategy
  • The difference between hiring a financial advisor and an trader

“Financially-engineered assets often fail to perform as their creators intended. Or they are ill-equipped to deal with unanticipated events.” – Ky Trand Ho (Forbes)

Mentions & Resources:

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Get the foundation to making money in up, down and *surprise markets on the Trend Following mailing list.

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