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Ep. 552: Mega Eclectic Number Two with Michael Covel on Trend Following Radio

Mega Eclectic Number Two with Michael Covel on Trend Following Radio
Mega Eclectic Number Two with Michael Covel on Trend Following Radio

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Today is another mega episode featuring Douglas Emlen, Toby Crabel, Robert Aumann, Ryan Holiday, Sally Hogshead and Michael Mauboussin.

Douglas Emlen is a professor at the University of Montana. He is the recipient of the Presidential Early Career Award in Science and Engineering from the Office of Science and Technology Policy at the White House. He has also earned multiple research awards from the National Science Foundation, including their five-year CAREER award.

Toby Crabel is founder of Crabel Capital Management. His approach is very different from Covel’s, but there are some commonalities: price action driven, systems, models, risk management. Crabel works on a whole different timeframe than the typical trend follower, typically turning his portfolio over in less than a day. Crabel, a former pro tennis player, has a philosophical nature and discusses how he executes these philosophies in the trading world.

Robert Aumann is an Israeli-American mathematician and a member of the United States National Academy of Sciences. He is a professor at the Center for the Study of Rationality in the Hebrew University of Jerusalem in Israel. Aumann is the 4th Nobel Prize Laureate in economics to be a guest on the podcast.

Ryan Holiday is an American author, writer, and marketer. He is the media strategist behind authors Tucker Max and Robert Greene, the former Director of Marketing for American Apparel and an editor-at-large for the New York Observer.

Sally Hogshead is an American speaker, author, former advertising executive, as well as the Chief Executive Officer of Fascinate, Inc. Hogshead’s newest book is “How The World Sees You: Discover Your Highest Value Through The Science of Fascination.”

Michael Mauboussin is an author, investment strategist in the financial services industry, professor at the Columbia Graduate School of Business, and serves on the board of trustees at the Sante Fe Institute (an independent, nonprofit theoretical research institute). He is managing director and head of Global Financial Strategies at Credit Suisse, where he advises clients on valuation and portfolio positioning, capital markets theory, competitive strategy analysis, and decision making.

In this episode of Trend Following Radio:

  • Humans and animals
  • International hacking
  • Game theory
  • Economics
  • World champions of peace
  • The book writing process
  • Flow state
  • Personal branding
  • Multi-disciplinary thinking
  • Luck vs. Skill
  • Outcome bias

Mentions & Resources:

Listen to this episode:

Adopting a Proper Psychological Attitude: Michael Mauboussin Wisdom

Excerpt:

In 2013, the Nobel Prize in economics went to three men. One of the recipients, Robert Shiller, is a professor at Yale University known for showing that markets are inefficient. Another was Eugene Fama, a professor at the University of Chicago known for his advocacy of market efficiency. (The third was Lars Hansen, also at the University of Chicago.) This leads to the first point worth stressing: to be an active investor, you must believe in both inefficiency and efficiency. In other words, you have to think that both Shiller and Fama are right―just not at the same time. Naturally, if markets are perfectly efficient there’s no reason to try to beat them through active management. But it’s also true that there’s no reason to try to beat the market through active management if you think markets are always inefficient. That’s because even if you are savvy enough to buy a dollar for fifty cents, there’s no reason to believe that the price and value will ever converge in a perpetually inefficient market.

How can you best deal with this? Trend following.

Ep. 315: Michael Mauboussin Interview with Michael Covel on Trend Following Radio

Michael Mauboussin
Michael Mauboussin

Michael Covel speaks with Michael Mauboussin today on his second visit to the podcast. Mauboussin is 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 serves on the board of trustees at the Sante Fe Institute (an independent, nonprofit theoretical research institute). He is managing director and head of Global Financial Strategies at Credit Suisse, where he advises clients on valuation and portfolio positioning, capital markets theory, competitive strategy analysis, and decision making. Covel and Mauboussin discuss multi-disciplinary thinking and its influence on Covel; looking at larger reference classes; the Swiss Franc; Mauboussin’s personal take on the recent oil move; fundamentals and expectation; luck or skill when it comes to trading profits; the paradox of skill, absolute, and relative skill; whether scientific principles of luck exist; defining luck; outcome bias; and the general public perception of behavioral economics. For more information on Michael Mauboussin, visit michaelmauboussin.com.

Listen to this episode:

Michael Mauboussin Will Make You Think

Michael Mauboussin appeared in my film Broke a few years back and I have always enjoyed his efforts. While not a trend follower much of his work dovetails nicely with the heart and soul of trend following success: human behavior and inefficient markets. Two recent Mauboussin works worth reading (PDF):

The Importance of Expectations. The Question that Bears Repeating: What’s Priced in?
Shaking the Foundation: Revisiting Basic Assumptions about Risk, Reward, and Optimal Portfolios

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