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Tag: economics

Ep. 255: Tyler Cowen Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Tyler Cowen
Tyler Cowen

My guest today is Tyler Cowen, an American economist, columnist and blogger. He is a professor at George Mason University, where he holds the Holbert L. Harris chair in the economics department. He hosts the economics blog Marginal Revolution, together with co-author Alex Tabarrok.

The topic is economics.

In this episode of Trend Following Radio we discuss:

  • Sabermetrics and the new idea that we will be judged by numbers
  • Cowen’s early experience studying under Nobel Prize winner Thomas Schelling
  • The notion of thinking in terms of paradoxes
  • Why we’re moving from the 1% to the 15%
  • “Average is over” and why Singapore and Israel are the two places in the world where this has come true first
  • Problems because of “average is over” in Singapore
  • Pure free markets
  • Thinking about why past regulations have failed
  • How computers change us
  • Globalization, where things are headed, and what we should be prepared for
  • Zero marginal product workers

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Timeless Edward Seykota Trading Wisdom

Posted on by Michael Covel

Please listen to my Ed Seykota podcast, but also recall some timeless Seykota wisdom:

1. “Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.”

2. “Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them “funny-mentals”. However, if you catch on early, before others believe, you might have valuable “surprise-a-mentals”.”

3. “If you can’t measure it, you probably can’t manage it… Things you measure tend to improve.”

More.

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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. 252: Ben Hunt Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Ben Hunt
Ben Hunt

My guest today is Ben Hunt, the Chief Risk Officer at Salient Partners. Salient is a 19B AUM manager based in Houston, Texas. As Chief Risk Officer, Hunt writes the Epsilon Theory, viewing capital markets through the lenses of game theory and history.

The topic is Epsilon Theory.

In this episode of Trend Following Radio we discuss:

  • Power of the crowd watching the crowd
  • Game theory
  • Having a profound agnosticism about what the future holds
  • The difference between risk and uncertainty in the context of game theory
  • The Panopticon and the chilling effect of being watched
  • The “common knowledge game” and the missionary
  • The island of the green-eyed tribe

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Ep. 250: Hersh Shefrin and Arvid Hoffmann Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Hersh Shefrin and Arvid Hoffmann
Hersh Shefrin and Arvid Hoffmann

My guests today are Hersh Shefrin and Arvid Hoffmann.

Hersh Shefrin has done pioneering work in behavioral finance and is the author of Beyond Greed and Fear.

Hoffmann is a colleague of Shefrin. He is a Professor of Finance at Maastricht University in the Netherlands.

The topic is their paper, Technical Analysis and Individual Investors.

In this episode of Trend Following Radio we discuss:

  • Covel and Shefrin discuss how Shefrin came to know that behavioral finance was his path; the two-system framework; the connection to behavioral and eating disorders; the disposition effect; when emotion and reason are in conflict; “transferring your assets” vs. “selling a loss”; distinguishing between rules and discretion; how we stick with rules for ourselves given the context of our humanity; the psychological pitfalls of the 2008 financial crisis; the inevitability of market crises; Minsky and Keynes; the psychology of Keynesian economics; and human ideas surrounding uncertainty.
  • With Arvid Hoffmann, Covel discusses the paper Technical Analysis and Individual Investors; the inspiration for the paper; Hoffmann’s definition of technical analysis; the narrow focus of the paper to short-term trading; technical analysis and trend following; “invest as if the market was efficient”, and “restrict your attempts to beat the market”

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arvid hoffmann

Ep. 244: Walter Williams Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Walter Williams
Walter Williams

My guest today is Walter Williams, an American economist, commentator, and academic. He is the John M. Olin Distinguished Professor of Economics at George Mason University, as well as a syndicated columnist and author known for his libertarian views.

The topics are liberty and economics.

In this episode of Trend Following Radio we discuss:

  • Why Williams calls himself a radical
  • The morality of markets
  • The welfare state and bailouts
  • How Williams didn’t “think poor” growing up
  • The nefarious aspect of minimum wage
  • How Williams stayed positive and avoided bitterness despite opposition
  • Malcolm X. and Martin Luther King, Jr.
  • Why there’s no poverty in the United States
  • How Williams felt about the Fall of 2008 and the bailouts that took place
  • How we got to the point where people want to trust the state so much
  • How Williams has developed a thick skin to deal with the criticism of his radical nature

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“How does something immoral, when done privately, become moral when it is done collectively? Furthermore, does legality establish morality? Slavery was legal; apartheid is legal; Stalinist, Nazi, and Maoist purges were legal. Clearly, the fact of legality does not justify these crimes. Legality, alone, cannot be the talisman of moral people.”

Ep. 243: John Mauldin Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
John Mauldin
John Mauldin

My guest today is John Mauldin, a noted financial expert, a New York Times best-selling author, a pioneering online commentator, and the publisher of one of the most widely read investment newsletters in the world.

The topic is finance.

In this episode of Trend Following Radio we discuss:

  • Credit card rates and zero interest rate policy
  • The improper use of credit
  • Debt spirals
  • Central bank policies that keep whipsaw periods going
  • The actions in Japan and how they can spread across the world
  • The justifications that Mauldin sees behind the scenes
  • Black swans and boom-bust periods
  • How the 2008 financial crisis wasn’t a true black swan event
  • The “why” behind zero interest rate policy
  • The specter of Keynesianism over the world

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Ep. 227: Justin Fox Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Justin Fox
Justin Fox

My guest today is Justin Fox, an American financial journalist, commentator, and writer born in Morristown, New Jersey. He is a Bloomberg Opinion columnist and former editorial director of the Harvard Business Review Group and business and economics columnist for Time magazine.

The topic is his book The Myth Of The Rational Market: A History of Risk, Reward, and Delusion on Wall Street.

In this episode of Trend Following Radio we discuss:

  • Harry Markowitz, Bayesian statistics, and making smart decisions in an uncertain world using quantitative tools
  • Stocks, beta, and the importance of making useful predictions
  • Commodities Corporation and trend following trading in the early 1970’s
  • Why a market in which everyone was rationally anticipating the future would be a random market
  • Amos Hostetter
  • How the behavioral mindset started to unfold in the 1970’s
  • Eugene Fama and the efficient market hypothesis
  • The Capital Asset Pricing Model
  • Why well-designed markets and well-informed investors are prone to manias and panics
  • Individuals making errors vs. the group getting it right

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Justin Fox