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Ep 532: No Systematic Fear with Michael Covel on Trend Following Radio

No Systematic Fear with Michael Covel on Trend Following Radio
No Systematic Fear with Michael Covel on Trend Following Radio

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Michael excerpts a presentation from Cliff Asness. Asness is rigidly focused on the systematic side of the trading equation. Don’t let the idea of something being systematic scare you into thinking complication alone. Systematic means you follow rules. Asness has models, rules, and mechanisms he automates and executes. That’s smart. We can learn from that thinking.

In this episode of Trend Following Radio:

  • Black box investing
  • Quantitative trading
  • Quants vs High frequency trading
  • Value based trading
  • Momentum trading
  • The dirty words of finance
  • Statistical arbitrage
  • Quant macro
  • Managed futures

“The hedge fund manager has to use what I call the dirty words of finance: Leverage, derivatives, and shorting.” – Cliff Asness

Mentions & Resources:

Listen to this episode:

Are You Throwing Your Children Under The Bus?

Feedback in:

Hi Michael,

Just listened to your podcast on the universal kick-in-the-ass known as the death of the McJob. I couldn’t agree more. What people do not realize, however, is that through osmosis we pass our attitudes on to our children. If we are afraid to get out from under the weight of societal expectation to be another drone zombie with the rest of them, what message does that give to our children? A child looks up to its parents for guidance and reassurance. We see it during, say, a thunder storm, where our children are nervous and instinctively glance over at us to see if WE are afraid. Well what if we are and we show it? What do we communicate to our children if we show our fear? The obvious answer is that they then become afraid because they rely on the parent to show them the things they should be afraid of.

So when a parent does not follow your message, does not get out there and make something happen, and instead retreats into the illusory safety of corporate zombi-ism, they have let down their child in a way that goes far beyond not giving them the latest toy or a ride to the mall. They have basically told them that there is safety to be had by huddling in a collapsing building. So if people won’t take your words to heart for themselves, then they should at least do it for their children.

By the way, Mike, I’m writing this from my hotel room overlooking The Bund in Shanghai. I’m here visiting my daughter who graduated last year as a top-notch high school student and winner of a couple significant citizenship awards. She has read all your books and has the Trend Following mentality. Last summer she made the decision to head to China to learn Mandarin and to see more of the world before going to university. And in case everyone thinks that what you’re saying is all about money, she is volunteering for a charity that helps Chinese kids make a difference in their world because she herself wants to make a difference. Because of her can-do attitude, the money is already there; it’s a given, because once you are there mentally, the results are inevitable. She has had no trouble accumulating the money she needs to achieve her goals, but she’s taking this year to go beyond the money, and as you probably guessed, I couldn’t be more proud of her. She not only thinks it, she does it.

Thanks Michael, keep up the message!


Thanks Dale. I couldn’t have said it better myself.

If you want to live a life of complacency, a life that is run by what the masses are telling you to do, then that is your choice. Just know that your children will be subject to the same kind of ruling over their lives. Don’t lead them to believe that “there is safety to be had by huddling in a collapsing building”.

Trend Following, Yoga and Meditation

Feedback in:


Hi, I hope you are well today and managing to keep away from the election hooha.

I have started to listen to your podcasts during my commute to and from work everyday (utilizing my dead time so to speak), anyway this morning I finished episodes 17 & 18, where you speak about your yoga lessons and the zen habits website.

I thought they were most intriguing and I wanted to ask you if you have ever tried meditation? I started about 6 months ago with a small group once a week, mainly to help me deal with the daily stress from my current job, but I have found that meditation has really helped me over various parts of my life, and also helps you to get into the now, which is obviously a theme for you and also many trend follows, most notably Ed Seykota. If you get the chance I would very much encourage you to try it.

As a side note, I had a meditation class last night, and we were speaking about fear and how it stops you from achieving all that we as individuals could possibly achieve, and how being in the now and trusting that situations will work out, and not forcing things is a much better way. How coincidental then that this morning I heard your 2 podcasts that were talking about the exact same things.

Releasing fear and embracing trust I feel are two areas that most of us would do well to try and deal with and understand much more. I did think about this this morning and you can see fear everywhere and if you actually stop you can see how it drives people and is responsible for so many decisions made, many on a subconscious level, as an example – even down to the person pushing to get on the train first as they are fearful of not getting a seat.

I would like to thank you for the time and effort that you put into all areas of your work, that allows someone like me to begin connecting the dots.

I have found that listening to your podcasts on a daily basis really fires up my motivation to do well and succeed at trend following.

I hope you have a great day.

Kind Regards,

— Clare

Thanks Clare! Just getting started on meditation. Learning!

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