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Tag: interview

Ep. 89: Tadas Viskanta Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Tadas Viskanta
Tadas Viskanta

My guest today is Tadas Viskanta, the founder and editor of the Abnormal Returns blog and a private investor with 20-plus years of experience. Viskanta calls his blog a “forecast free investment blog”.

The topic is his book Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere.

In this episode of Trend Following Radio we discuss:

  • Investment philosophies and strategies to the challenges authors and bloggers face in the world today
  • Disadvantage given to those who follow the constant data stream from the media
  • Why Viskanta felt the need to write “Abnormal Returns”, and the strategy and style behind it
  • The phrase “abnormal returns” and trying to measure returns over and above the risk taken
  • Underperforming
  • Preparing for abrupt change in the markets
  • Viskanta’s move from value investing to a more systematic strategy–and Covel’s early experiences with value investing material
  • Now that so many global barriers are easy to cross, why so many people have “home bias” and difficulty placing global investments
  • Why people still look at the markets with rose colored lenses and so easily forget the bubbles of the past
  • The behavior gap
  • Why having a suboptimal strategy that you can follow in a systematic way is better than having no strategy at all
  • The ramifications of instant feedback in the blogosphere
  • Why you need a burning desire to be an author today

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Ep. 85: Barry Ritholtz Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Barry Ritholtz
Barry Ritholtz

My guest today is Barry Ritholtz, an author, newspaper columnist, blogger, equities analyst, television commentator, and CEO of Fusion IQ. Ritholtz is deep down a quant guy, but brings strong views and opinions. However, he won’t sit around and “fight the tape”.

The topic is his book Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.

In this episode of Trend Following Radio we discuss:

  • The price of paying attention and why you should be selective in what you watch, read, and listen to
  • The onslaught of political information
  • The insatiable need to consume information and knowing when it’s the right time to quarantine yourself from being influenced by someone in particular
  • Ritholtz’s views on gold, why attaching your emotional well-being to it is wrong, and how it won’t be quite as valuable as most people think in the event of a crisis; cutting your losses short and letting your winners run
  • The real value of intuition
  • How Ritholtz views the world and where we’re at right now, societal and economic cycles, and how you can’t be a doom and gloomer seeing what’s coming down the pipeline in the next generation
  • The importance of not being cash rich and time poor, getting “lost in the screens”, and leading a good life instead of always chasing money for its own sake.

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Ep. 83: Tom Basso Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Tom Basso
Tom Basso

My guest today is Tom Basso, the trend following trader famously featured in Jack Schwager’s “New Market Wizards”. Basso is a hedge fund manager. He was president and founder of Trendstat Capital Management. Trendstat was closed in 2003 when assets under management fell to $65M. He is the author of two books, Panic-Proof Investing and the self-published The Frustrated Investor. In 1998, he was elected to the board of the National Futures Association. He currently runs enjoytheride.world, a website dedicated to trader education. He is also the chairman of the board of Standpoint Funds.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • Video of philosopher Alan Watts
  • How Basso manages his emotions during both losing and winning periods
  • What drove Basso to “enjoy the ride” and whether there were periods in his life when it was difficult to do so
  • Exit strategies on winning positions
  • Basso’s use of hedges
  • The process behind taking a developed system from testing to live trading
  • What Basso learned from his earliest large drawdown
  • Basso’s use of money management and risk control
  • Basso’s advice to the first time programmer
  • How to handle skeptics of trend following
  • Whether Basso considered the notion of serenity from the very beginning of his career
  • The career of John W. Henry
  • Basso’s coin flip entry method, and the importance of exit strategies
  • Percent betting
  • Diversification
  • What would cause Basso to stop trading a particular system
  • Comfort with uncertainty
  • Basso’s views on initial capital at risk vs. unrealized gains
  • Fighting against your gut reaction when your system tells you otherwise

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Ep. 77: Michael Mauboussin Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Michael Mauboussin
Michael Mauboussin

My guest today is Michael Mauboussin, an author (“More Than You Know”, “Think Twice: Harnessing the Power of Counterintuition”), investment strategist in the financial services industry, professor at the Columbia Graduate School of Business, and board of trustees at the Santa Fe Institute (an independent, nonprofit theoretical research institute). 

The topic is his book The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing.

In this episode of Trend Following Radio we discuss:

  • Luck and skill, how they cross over and play off each other, and how both of those factors have played a part in both Covel and Mauboussin’s careers
  • How Mauboussin came to start working on “The Success Equation”
  • How losing on purpose can define skill
  • How sports can provide great examples of what Mauboussin contends regarding skill and luck
  • The human desire and emotional need to tell stories, and how that plays into peoples’ difficulty untangling skill and luck
  • Stephen Jay Gould’s notion of the .400 hitter in baseball and the paradox of skill
  • Physical limits and improvement in skill over time
  • Sample size issues
  • Process vs. outcome
  • What to do when you’re the underdog and how complicating the situation can help when you’re in that position
  • Improving your guesswork on where you are in the luck-skill continuum
  • Persistence and predictive value
  • Building skill

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Ep. 76: Jack Schwager Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Jack Schwager
Jack Schwager

My guest today is Jack Schwager, a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. Schwager is one of the founders of Fund Seeder, a platform designed to find undiscovered trading talent worldwide and connect unknown successful traders with sources of investment capital. Previously, Schwager was a partner in the Fortune Group (2001-2010), a London-based hedge fund advisory firm.

The topic is his book Market Sense and Nonsense: How the Markets Really Work (and How They Don’t).

In this episode of Trend Following Radio we discuss:

  • How Schwager was able to make “Market Sense and Nonsense” accessible to both professionals and laymen and touch on some of the subjects contained within: market fallacies and misconceptions
  • The idea of cable news “experts”, and what would happen if you actually followed all of the picks made by people like Jim Cramer and other talking heads
  • Comparing performance streams against each other, and why you have to consider more than just the number
  • Volatility vs. risk
  • If coming to a good risk adjusted return is based more on a scientific approach or personal preference
  • Leveraged ETFs
  • The fear of hedge funds
  • The idea of leverage and why much of “Market Sense and Nonsense” was built around trying to understand it
  • Why fund-to-fund managers putting a large group of trend following traders together in one portfolio might not be a wise move
  • Presidential election and discuss why whoever is selected to be the next president might not make much of a difference in the markets

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Ep. 73: Peter Brandt Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Peter Brandt
Peter Brandt

My guest today is Peter Brandt, a trader who has been in the commodity trading space since 1976. He’s traded his own proprietary account from the late 1970s until today and is currently entering the hedge fund world by running a multi-CTA fund-of-funds. Brandt got his start in Chicago trading commodities and working at the Chicago Board of Trade for Continental Grain Company.

The topic is his book Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading.

In this episode of Trend Following Radio we discuss:

  • How the accident influenced his trading and how great lessons can be learned through adversity
  • The idea of trading a five-minute chart pattern vs. a weekly chart pattern
  • The biggest mistakes you can make as a novice trader
  • Averaging a loser
  • Risk management and the right amount to risk on any trade
  • Upside volatility and the fantasy of a straight line up of profit growth
  • The importance of reducing the incessant head chatter and living in the moment now

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Ep. 68: Mark Shore Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Mark Shore
Mark Shore

My guest today is Mark Shore, a trader and educator whose main area of expertise is managed futures. Shore has an MBA from the University of Chicago, was the former head of risk at Octane Research (over a billion AUM), was the former COO of VK Capital (a subsidiary of Morgan Stanley), and now is an adjunct professor at DePaul University teaching the only accredited course on managed futures in the country.

The topic is his paper Decoding The Myths of Managed Futures.

In this episode of Trend Following Radio we discuss:

  • Shore’s experience in getting the “a-ha” moments out of his students when teaching managed futures, and how he brings his students into the world of managed futures
  • How and why those working in the CTA/managed futures/trend following space have a firm grasp on risk management that exceeds the understanding of competitors (i.e. mutual funds)
  • How the term “managed futures” (which refers to the instrument and not the strategy) might be problematic
  • Skewness
  • Drawdowns
  • Why managed futures performance is famous for doing extremely well when chaos unfurls
  • Why the majority of the mutual fund industry hasn’t adopted CTA strategies
  • The issue of survivorship bias
  • Why certain people can’t wrap their arms around strategies not based on fundamental analysis
  • The emotional elements of trading
  • Other experiences while working at VK Capital

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