Michael Covel speaks with Jerry Parker on today’s episode of the podcast. This is Parker’s fourth interview with Michael Covel. Parker is an original Turtle, trained by Richard Dennis. However, since then he has very successfully run a managed money firm called Chesapeake Capital. Covel and Parker discuss a series of tweets written by Parker and use them as a jumping-off point for conversation. Topics include price action, “normal” market behavior; recent moves in the Swiss Franc; paying attention to entries as well as exits; why investors are often their own worst enemy; the first moment that Parker heard about price-based trading; becoming obsessed with asymmetrical risk and reward; why looking at trend following losses is important; why you can tell a system is robust if it has big drawdowns; and backtesting and treating all trades with equal weight.
Michael Covel talks with Jerry Parker on his third visit to the podcast. Parker is an original Turtle, trained by Richard Dennis. However, since then he has very successfully run a managed money firm called Chesapeake Capital. Covel and Parker discuss mean reversion trading; what the definition of momentum trading is compared to trend following; why “good enough” is more rigorous than any metric; how the intervention of the Fed has broken up trends and made volatility drop in markets; how the idea of uncertainty and talking in probabilities makes people uncomfortable; the difference between managed futures and trend following; why buy and hold is predicated on trust of the Fed; and why trend followers don’t look to “beat” the market.
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Jerry Parker writes in:
What makes trend followers so great is their uncompromising approach to life: They’re mean, they’re hungry, and they’re coming at you. There’s a refreshing obviousness about the entire species; they pull no punches, they spring no surprises. They are what they are.
If everybody seems pretty depressed this week, there’s an obvious reason for it: Shark Week just ended. Shark Week, an annual bonanza provided by Discovery Channel, is insanely popular, generating amazing ratings year after year. Almost 29 million people watched it last week during prime-time hours. That’s 29 million. And why not? Sharks unite people of all races, creeds and political stripes, because everyone, even libertarians, are scared of sharks, and TV shows about the daunting creatures unite the nation emotionally. By contrast, a lot of people think meth dealers (“Breaking Bad”) and serial killers (Dexter, Hannibal) are role models. What makes sharks so great is their uncompromising approach to life: They’re mean, they’re hungry, and they’re coming at you. There’s a refreshing obviousness about the entire species; they pull no punches, they spring no surprises. They are what they are. People just love this annual celebration of the dorsally challenging, and when Shark Week is over you can feel the spirit of the American people sag. It means that the summer itself is winding down. Even the sharks are closing up shop. What a massive downer. Shark Week comes but once a year—this season with a “dramatized” documentary about a monstrously huge shark called Megalodon—and for the other 51 weeks we are on our own. I don’t understand this. If the public is so fixated on sharks, why isn’t there a Shark Spring Break? Why isn’t there at least a Shark Week every quarter? Why isn’t there a Shark Christmas Special? Or an All-Shark President’s Weekend? What other type of programming could be so breathtakingly popular, yet only get broadcast once a year? Pro Football Week? Nascar Week? “The Daily Show” Week? And don’t tell me there are only a finite number of programs about sharks out there, or that the public would eventually turn away if the airwaves were glutted with shows devoted to the tigers of the deep. Don’t be ridiculous. The very concept of Shark Week raises interesting questions about TV programming in general. Why is it always sharks that have to man the barricades? Why don’t rabid lemurs ever get into the act? Why can’t spotted hyenas ever step into the breach? Hey, you pumas out there. Hey, boa constrictors. Put on your game face and suit up. Admittedly, Spotted Hyena Week does not have the same ring. Much of the problem lies with the personalities and public profile of the planet’s other species. Whales are just not scary, except killer whales, which are actually dolphins—and that ruins everything, terror-wise. Bears are only intermittently scary; even the ferocious ones look kind of cute. Tigers are scary, but people like and admire tigers, while they hate sharks. Same deal with lions. Anacondas are scary, but you are not going to get eaten alive by an anaconda in the Long Island Sound or off the coast of Malibu. As for dogs, cats, cows, robin redbreasts, Shetland ponies? Forget it. Feral Cat Week has some appeal, as do Killer Gibbons and Jailbreak Chimps. But a whole week devoted to those animals’ exploits? I don’t think so. I am not telling Discovery Channel how to run its business. Actually, I am. Television is a zero-sum proposition. If there were more shows about sharks all year round there would be fewer series about klutzes auditioning for doomed Broadway productions, fewer talk shows, and far fewer programs in which people who can’t sing get to decide the fates of people who can’t dance. If there were Sunday morning gabfests like “Face the Shark Nation” or “Meet The Shark,” people might actually tune into those shows. A step in the right direction might be incorporating some shark material into otherwise humdrum programming: “The PBS NewsHour + Sharks,” “Conan & Sharks,” the National Hockey League Game of the Shark Week. I’m not saying it would boost viewership for every show with minuscule ratings. But it would be a step in the right direction.