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Ep. 512: Tim Price Interview with Michael Covel on Trend Following Radio

Tim Price
Tim Price

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My guest today is Tim Price. He has worked in capital markets for over 25 years across three management firms. A graduate of Christ Church, Oxford, he spent a decade as a bond specialist before going on to serve as Chief Investment Officer at three separate wealth management firms. Tim has been shortlisted for five successive years in the UK Private Asset Managers Awards programme and was a winner in 2005 in the category of Defensive Investing. He is now manager of the VT Price Value Portfolio, a fund investing in Benjamin Graham-style value stocks, and specialist value funds, from around the world. Tim also writes regularly for MoneyWeek magazine and The Spectator.

The topic is his book Investing Through the Looking Glass: A Rational Guide to Irrational Financial Markets.

In this episode of Trend Following Radio we discuss:

  • Trusting central planners
  • Going against the establishment
  • Banking system
  • Owning gold
  • Lehman Brothers collapse
  • 2008 bubble
  • The Brexit and Trump narrative

“Mankind has survived because of our ability to believe in things that do not actually exist.” – Tim Price

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Ep. 482: Two Takes with Michael Covel on Trend Following Radio

Two Takes with Michael Covel on Trend Following Radio
Two Takes with Michael Covel on Trend Following Radio

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Please enjoy my monologue Two Takes 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:

  • The tulip bubble
  • March 2000
  • Fall of 2008
  • Financial instability hypothesis
  • Trend following philosophy
  • Behavioral economics

“The only way to eliminate market bubble’s and crashes is to eliminate people.” – Michael Covel

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Ep. 468: Irrationality with Michael Covel on Trend Following Radio

Irrationality with Michael Covel on Trend Following Radio
Irrationality with Michael Covel on Trend Following Radio

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Please enjoy my monologue Irrationality 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:

  • Law of demand
  • Behavioral economics
  • Experimental economics
  • How do you make bubbles go away
  • Using algorithms over emotions
  • Noise reduction
  • Statistical thinking
  • Understanding the difference between risk and uncertainty
  • Probability theory
  • Risk Communication
  • Unconscious things that make us fearful

At the beginning of the 20th century, the science fiction author Herbert H. Wells made the following prediction, ‘If we want efficient citizens in a modern technological society we need to teach them three things: Reading, writing and statistical thinking.’ That is, a good way to deal with risk and certainty. Now, today almost 100 years later we have taught in the investment world almost everyone to read and write, more or less, but not to think with risk and uncertainty. – Gerd Gigerenzer

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If You Wanted to Know Nothing About “Bubbles” …Watch this UBS Investor Forum

Everything wrong about market advice for your edification.

$3000 suits, aristocrat accents, too much school = 100% bullshit
$3000 suits, aristocrat accents, too much school = 100% bullshit

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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.

Ep. 405: Didier Sornette Interview with Michael Covel on Trend Following Radio

Didier Sornette
Didier Sornette

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My guest today is Didier Sornette, the Professor on the Chair of Entrepreneurial Risks at Swiss Federal Institute of Technology Zurich. He is also a professor of the Swiss Finance Institute, associated with both the department of Physics and the department of Earth Sciences at ETH Zurich. He has worked on the King effect, a theory used to predict economic bubbles. Didier also set up the Financial Crisis Observatory in October of 2008. He brings an interesting perspective to financial crisis’s, and bubbles.

The topic is market bubbles.

In this episode of Trend Following Radio we discuss:

  • The adaptive market hypothesis
  • Dragon Kings vs. Black Swans
  • New economy syndrome
  • Predictive markets
  • Finite singularity
  • Equilibrium of the world

“When herding behaviour among investors ramps up, a stock’s or index’s growth rate can increase faster than exponentially, leading to more herding. This positive feedback brings the system to a tipping point. About two-thirds of the time, a crash results.” – Didier Sornette

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Ep. 369: Market Predictability with Michael Covel on Trend Following Radio

Market Predictability with Michael Covel on Trend Following Radio
Market Predictability with Michael Covel on Trend Following Radio

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Please enjoy my monologue Market Predictability 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:

  • Recognizing when you are being misled by the experts
  • What to look for in trend analysis and what to be wary of
  • Considering bubbles and other unpredictable global factors in the markets
  • Finding an objective approach to investing based on quantifiable information
  • Considering timeless human investment psychology elements
  • Making investment decisions without being blinded by rigid economic processes or political ideologies

“It’s mind numbing to study financial history, because it is so repetitive: we do the exact same things over and over. We have followed this pattern in every major bubble, starting with the coin mania in the Roman empire.” – John Galbraith

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Inequality, Free Markets and Crashes

Nassim Taleb and Mark Spitznagel talk about how government intervention postpones the inevitable. Excerpts:

Taleb: Mark, your book is the only place that understands crashes as natural equalizers. In the context of today’s raging debates on inequality, do you believe that the natural mechanism of bringing equality — or, at the least, the weakening of the privileged — is via crashes?

Mark: Well straight away let’s ask ourselves: Are we really seeking realized financial equality? How can we ever know what is the natural or acceptable level of inequality, and why is it even the rule of the majority to determine that? That aside, one can absolutely say logically and empirically that asset-market crashes diminish inequality. They are a natural mechanism for this, and a cathartic response to central banks’ manipulation of interest rates and resulting asset-market inflation, as well as other government bailouts, that so amplify inequality in the first place. So crashes are capitalism’s homeostatic mechanism at work to right a distorted system. We are in this ridiculous situation where utopian government policies meant to lessen inequality are a reaction to the consequences of other government policies — a round trip of market distortion. After we’ve been run over by a car, the assumed best treatment is to back the car over us again.

Taleb: I see you are distinguishing between equality of outcome and equality of process. Actually one can argue that the system should ensure downward mobility, something much more important than upward one. The statist French system has no downward mobility for the elite. In natural settings, the rich are more fragile than the middle class and we need the system to maintain it.

More:

Spitznagel: Well straight away let’s ask ourselves: Are we really seeking realized financial equality? How can we ever know what is the natural or acceptable level of inequality, and why is it even the rule of the majority to determine that? That aside, one can absolutely say logically and empirically that asset-market crashes diminish inequality. They are a natural mechanism for this, and a cathartic response to central banks’ manipulation of interest rates and resulting asset-market inflation, as well as other government bailouts, that so amplify inequality in the first place. So crashes are capitalism’s homeostatic mechanism at work to right a distorted system. We are in this ridiculous situation where utopian government policies meant to lessen inequality are a reaction to the consequences of other government policies — a round trip of market distortion. After we’ve been run over by a car, the assumed best treatment is to back the car over us again.

More:

Spitznagel: The main metaphor of my book is the “Yellowstone effect”: A massive fire in Yellowstone Park in 1988 opened the eyes of foresters to the fact that a century of wildfire-suppression, and with it competition- and turnover-suppression, had only delayed, concentrated, and by far worsened the destruction — not prevented it. This isn’t just about dead-wood accumulation creating a fragile tinderbox network. The real issue is how our tinkering artificially short-circuits the fundamental capacity of the system to allocate its limited resources, correct its errors, and find its own balance through the internal communication of information that no forestry manager could ever possibly possess. (The more this is mocked by technocratic naïfs like Geithner, the more valid it is.) But that capacity is still there, and homeostasis ultimately wins through a raging inferno. This is a cautionary tale for our economy. A crash, or the liquidation of assets that have grown unimpeded by economic reality (as if there were more nutrients in the ecosystem than there actually are), looks to academics and bureaucrats — and just about everyone else as well — like the system breaking down. It is actually the system fixing itself.

Food for thought.


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.

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Sign up free today.