I finished up listening to your podcast with Mike Lofgren on “The Deep State” and felt the urge to just thank you for a very interesting, informative, provocative, but essential discussion. Ironically, the issues you discussed are standard dinner table topics for me and my family (I’d consider ourselves different from the norm in a good way). Unfortunately, today’s farrago of reality TV shows, sports, and social issues have become red herrings to the more important topics. Why discuss the vexing and complicated issues when we can just talk about the Kardashians or whether bathrooms should be genderless?… At any rate, look forward to more discussions on your podcast.
PS: I have also been working in investments for a couple years but would could consider myself a “new” trader. At the end of your podcast you mentioned you’d send some trend following steps. I currently use a nuanced Tom Demark Indicator system, but I’m always open to learning something new.
My guest today is Ben Hunt, the Co-Founder and Partner at Second Foundation Partners. He is also the author of Epsilon Theory, a weekly publication that examines capital markets through the lenses of game theory and history. Since its launch in June, 2013 more than 100,000 copies of Epsilon Theory notes have been read by professional investors in more than 110 countries.
The topic is his Epsilon Theory.
In this episode of Trend Following Radio we discuss:
Monetary policy
What drives the value of currency?
Economics in recessions
Systematic models
Central Banks
Policy controlled markets
Expectations of the public markets
“Markets are too important to be left to investors.” – Ben Hunt
“It goes back to what I was saying about the overwhelming debt that sloshes around in the world and there are only three ways to get out of that: You can grow your way out, you can inflate your way out or you can assign losses and try to reset.” – Ben Hunt
You know, if we’re going to argue about the 1990’s instead of talking about the future, which I’d much prefer because I think every election is about the future, and you all deserve to know what we will do to help you have a brighter future — but, if we are going to talk about the 1990’s I think it’s only fair to say that at the end of the 1990’s, after two terms of my husband’s presidency, the unemployment rate in Michigan was 4.4 percent.
The 1990s were the biggest stock market bubble in USA history. And now 16 years later, via slight of hand and a fantasy timeline, shes brag about the then great economy that magically only concluded at the tail end of her husband’s Presidency.
Bottom line, politicians are never the path to wealth and their words never tell anywhere close to a full story. Here are the 1990s in Nasdaq chart form:
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
Please enjoy my monologue Inequality of Effort 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:
Two Americas
Crowd behavior
Marketing yourself
“The crowds favorite words include fast, easy, cheap, fun, now, and simple.” – Seth Godin
“One group will preach equality of outcome as a right while completely ignoring inequality of effort.” – Source Unknown
I like what Lou Holtz says here, but it’s better IMO without “names”. So I made that edit:
—
The [name] are right, there are two Americas. The America that works and the America that doesn’t. The America that contributes and the America that doesn’t. It’s not the haves and the have nots, it’s the dos and the don’ts. Some people do their duty as Americans, obey the law, support themselves, contribute to society and others don’t. That’s the divide in America.
It’s not about income inequality, it’s about civic irresponsibility. It’s about a political party that preaches hatred, greed and victimization in order to win elective office. It’s about a political party that loves power more than it loves its country.
That’s not invective, that’s truth, and it’s about time someone said it.
The politics of envy was on proud display a couple weeks ago when [name] pledged the rest of [name] term to fighting “income inequality.” [name] noted that some people make more than other people, that some people have higher incomes than others, and [name] says that’s not just. That is the rationale of thievery.
The other guy has it, you want it, [name] will take it for you. Vote [name]. That is the philosophy that produced [name].
It is the electoral philosophy that is destroying America. It conceals a fundamental deviation from American values and common sense because it ends up not benefiting the people who support it, but a betrayal.
The [name] have not empowered their followers, they have enslaved them in a culture of dependence and entitlement, of victim-hood and anger instead of ability and hope. The [name] premise – that you reduce income inequality by debasing the successful–seeks to deny the successful the consequences of their choices and spare the unsuccessful the consequences of their choices. Because, by and large, income variations in society are a result of different choices leading to different consequences.
Those who choose wisely and responsibly have a far greater likelihood of success, while those who choose foolishly and irresponsibly have a far greater likelihood of failure.
Success and failure usually manifest themselves in personal and family income. You choose to drop out of high school or to skip college – and you are apt to have a different outcome than someone who gets a diploma and pushes on with purposeful education.
You have your children out of wedlock and life is apt to take one course; you have them within a marriage and life is apt to take another course. Most often in life our destination is determined by the course we take.
My doctor, for example, makes far more than I do. There is significant income inequality between us. Our lives have had an inequality of outcome, but, our lives also have had an in equality of effort. While my doctor went to college and then devoted his young adulthood to medical school and residency, I got a job in a restaurant. He made a choice, I made a choice, and our choices led us to different outcomes. His outcome pays a lot better than mine. Does that mean he cheated and [name] needs to take away his wealth? No, it means we are both free men in a free society where free choices lead to different outcomes.
It is not inequality [name] intends to take away, it is freedom. The freedom to succeed, and the freedom to fail. There is no true option for success if there is no true option for failure. The pursuit of happiness means a whole lot less when you face the punitive hand of government if your pursuit brings you more happiness than the other guy. Even if the other guy sat on his arse and did nothing. Even if the other guy made a lifetime’s worth of asinine and short sighted decisions.
[name] and the [name] preach equality of outcome as a right, while completely ignoring inequality of effort. The simple Law of the Harvest – as ye sow, so shall ye reap – is sometimes applied as, “The harder you work, the more you get.”
[name] would turn that upside down. Those who achieve are to be punished as enemies of society and those who fail are to be rewarded as wards of society. Entitlement will replace effort as the key to upward mobility in American society if [name] gets his way. [name] seeks a lowest common denominator society in which the government besieges the successful and productive to foster equality through mediocrity. [name] and [name] party speak of two Americas, and their grip on power is based on using the votes of one to sap the productivity of the other. America is not divided by the differences in our outcomes, it is divided by the differences in our efforts.
It is a false philosophy to say one man’s success comes about unavoidably as the result of another man’s victimization.
What [name] offered was not a solution, but a separatism. [name] fomented division and strife, pitted one set of Americans against another for [name] own political benefit. That’s what socialists offer. Marxist class warfare wrapped up with a bow. Two Americas, coming closer each day to proving the truth to Lincoln’s maxim that a house divided against itself cannot stand.
“Life is ten percent what happens to you and ninety percent how you respond to it.”
