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Geneva Trend Following Insights: Still Ignored

Feedback in:

Hello Michael, Warm greetings here from Switzerland! I thought I would give you some feedback from a conference I attended last week in Geneva: The Opal European Wealth and Family Office Conference. It reminded me again of how much work we need to do to spread the logic of basic trend following amongst this group. The three-day conference was very much focused on issues of feeling, judgements and nothing short of predictions about asset classes, which countries they should be investing in and the general direction of the market. It is genuinely frustrating to find that trend following is still confined to and seen as a specialized CTA strategy, one of many others. Thankfully, there was a short section (discussed in a separate boardroom) about CTAs and their role in a portfolio, and it would appear that there was a greater deal of acceptance of trend following amongst this group. I also cannot help but feel that even though we are all in the same industry, actual fund managers and those who allocate assets (and therefore judge and analyze us) are in fact very far removed from one another. Michael, we are in the process of building our business and diversifying beyond our own single strategy fund. We have planned for some time to create a fund-of-fund of esteemed peers: the qualification simply being systematic trend followers who we respect from both a quantitative and qualitative point of view. As you know, there are some fancy software and websites which allow you to do quantitative analysis on these. However, we kindly want to ask your opinion and suggestions on the handful of funds here in Europe and the UK which you in your experience find to fit well with your idea of systematic trend followers (regardless of trading instruments, asset class or such variables such as AUM). Of course, there are people like [name] and the like, but preferably ones that are not as well-known as the more famous ones. We will treat your suggestions with confidence and will not hold you responsible for your suggestions; they will simply provide an interesting angle from which to begin our analysis, from somebody whose opinion we hold in high regard. Thank you so much and all the best to you Michael. PS: Thank you for the many updates on both your blog and Facebook. Sometimes you are the only reason for going onto Facebook!

Thanks for the insights and feedback!

I am an open book, however. My experience with assorted managers (by name) is across my websites, 4 books, film and podcast episodes.

It’s all transparent.


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Removing ‘Junk’ from People’s Brains? Check!

From an associate in the trend following world:

“Michael, Great to see you at the MFA panel in Chicago and congratulations on Trend Commandments. I’ve been working through it and really impressed with how you continue to make trend following more and more accessible to the average individual who, unfortunately, has to be de-educated in order to ‘get it’. Your writing successfully breaks down all the mis-information leaving fertile ground for people to open their minds to new concepts of managing money. Most…may never actually trade for themselves, but I think your book is a great tool to get people thinking in the right direction on many things, including how to manage their portfolios.”

Thanks.

Unrelated, people have been asking about trend following performance in recent queries. All of my books, including Trend Commandments, gives an idea of how trend following pros have fared for decades. Ignore their success at your own peril.

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How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
Frequently Asked Questions
Performance
Research
Markets to Trade
Crisis Times
Trading Technology
About Us

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.

Trend Following Panel Event: Chicago June 21 10am

I will be moderating a panel event at MFA’s Forum 2011. The panelists include Larry Hite and Ed Seykota.

NOTE: Go to http://www.managedfunds.org/forum2011 and register as a guest. Use the the code TRENDS250 and you can register for Hite/Seykota/Covel panel only — for $250.


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

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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.

An Interchange: Trend Trading Confusion

Feedback in:

Hi Michael, this is [name] from Kuala Lumpur, Malaysia. What is your take on Gold and soft commodities for the present year and where do you think the Dolllar is heading to? Warm Regards, [name]

Hi, are you familiar with my trend following research?

Yes i have read your books namely Trend Following and TurtleTrader. For a fact you go with the trend, but just wanted to know as to how you see these trends goin…

But I am a trend follower, not trend predictor! Trend followers don’t make predictions. Both my books emphatically say that. It’s not a joke!


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
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Performance
Research
Markets to Trade
Crisis Times
Trading Technology
About Us

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.

Francisco Vaca: The ‘Turtle’ Scientist

I spent some time with Francisco Vaca a few years back in Florida. He offered a nice view on my book ‘The Complete TurtleTrader’:

“Regarding your new book [“The Complete TurtleTrader“], I can say that after hearing the turtle story many times from many of the people that are part of the story and after reading many articles about such story, this is by far the most entertaining, inspiring, extensive, and honest story of the turtles I have ever read.”

Vaca’s background? He currently is an associate with original Turtle Paul Rabar. How did he get started?

“…a friend…told me there was a job for a programmer at a commodity trading firm. He had thrown away the job ad, so I picked it out from the garbage! It turned out to be at C&D Commodities, which was co-founded by Richard Dennis of ‘turtle’ fame.”

That ‘find the ad in the garbage can’ was long after the original Turtle experiment. Read a recent article on Vaca (PDF).


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
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Performance
Research
Markets to Trade
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About Us

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.

Making the Trend Your Friend; Trend Following and Michael Covel in Barrons

michael covel in barrons

Mike Hogan penned an article titled ‘Making the Trend Your Friend‘ in today’s Barrons. An excerpt:

BUY-AND-HOLD INVESTING is a loser, says Michael Covel, founder of Trend Following, one of several Websites devoted to the trading strategy of the same name.

“How many more decades can you go with negative returns?” he asks, referring to the disappointing aughts (www.trendfollowing.com). The unofficial chronicler of the 25-year-old active investing strategy, Covel claims that leading practitioners of trend following, like Boston Red Sox owner John William Henry, have collectively logged a 17.56% average annual return since 1984 compared with 7.37% for the Standard & Poor’s 500.

Trend following is grounded in the notion that a stock or sector in motion tends to stay in motion—until it stops. “Markets that break out are more likely to continue than to reverse direction,” maintains Covel. It’s equally applicable to short and long trades and to any class of asset—stocks, futures, currencies—with typical holding periods of a few weeks.

Trend following is similar to momentum investing, except that devotees studiously avoid using company fundamentals like revenue growth or positive earnings surprises as trade signals. The focus is entirely on price movement—although trend followers aren’t that enamored of charting or technical analysis, either. When a trend starts, most technical indicators turn in the same direction, says Covel.

THE KEY DIFFERENCE between trend following and most investment strategies is the lack of crystal-ball gazing. Trend followers make no attempt to forecast a trend’s duration, magnitude or key inflection points. Entry and exit triggers are decided at entry, and trend followers often arrive late to the party.

Its “buy high, sell higher” orientation smacks of the bigger-foolism that has tripped up so many investors, large and small. But trend followers don’t blindly chase bubbles. Their systems try to take the emotion out of investing through rules-based decisions, back-testing of trade theses and strict risk management.

A portfolio is usually spread across a dozen or more (hopefully) noncorrelated assets with tight trailing stops, which can be 2% or less below entry price. That means a high percentage of holdings can get stopped out in the search for a few home runs. Investors need a pre-defined fund allocation strategy that can withstand a losing streak.

“As many as 60% of initial bets will be wrong,” says Covel, “The biggest impediment to success is fear of failure.”

Covel operates several sites that explain the strategy, including trendfollowing.com and TurtleTrader. They are supported by the sale of books, CD-ROMs and seminars, but also offer considerable free content (www.trendfollowing.com/resources.html).


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
Frequently Asked Questions
Performance
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About Us

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.

Glenn Beck’s ‘Broke’ Inspired by Michael Covel’s ‘Broke’

Glenn Beck's Broke

Glenn Beck (and his co-author Kevin Balfe) released a new book today (Oct 2010) titled Broke.

I happen to have a documentary film titled Broke released last year.

Once my film was completed it made the rounds to many potential distribution outlets. One outlet among many was Glenn Beck’s office (my film ended up premiering on The Documentary Channel). Beck’s co-author Kevin Balfe emailed me October 1, 2009 to say:

“I think you’ve produced an excellent documentary but it’s not a great fit for us at this time.”

Did not think too much of that as rejection is part of the business in a creative world. Easy come, easy go. However, a year later it was an interesting surprise to see Beck’s book ‘Broke’ announced in Aug 2010. My gut immediately said, “I know where they got that title from.”

Beck confirmed when his title changed (audio) in Sep 2010:

“This one started out last October [2009] as ‘The Plan’, but we decided to make it ‘Broke.'”

‘Broke’ was a great title for a film and it is interesting to see Beck change his book title due to my random 2008 moment of inspiration.

Michael Covel's Broke


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
Frequently Asked Questions
Performance
Research
Markets to Trade
Crisis Times
Trading Technology
About Us

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.