Michael Covel opens his monologue with a clip from the film, ‘Patton’. He talks about persistence over time in relation to the film, relating it to some personal examples from his own life. Some people seem to have genetic disposition for certain skills; however, the drive to succeed supersedes any genetic disposition you may have. Dedication, persistence and the drive to achieve are the true keys to success. Covel leads into a clip of Maria Bartiromo talking with Ray Dalio of Bridgewater. Covel notes some things that Dalio goes into that have to do with trend following: having a strategic asset allocation mix that assumes you don’t know what the future is going to hold; and the importance of the few big wins. However, Dalio says he isn’t a trend following trader in the traditional sense: he’s 100% systematic using fundamental information–not technicals. Covel goes on to surmise that there is evidence that some portion of Dalio’s business is perhaps in the technical trend following space. Covel also talks managed futures: the origin of the term; how it describes an instrument and not a strategy; and its relation to trend following. Further topics include why you don’t need a Ph.D. to be a trend following trader, and process vs. outcome.
Paul Tudor Jones as quoted in the Foreword to The Alchemy of Finance:
In Patton, my favorite scene is when U.S. General George S. Patton has just spent weeks studying the writing of his German adversary Field Marshall Erwin Rommel and is crushing him in an epic tank battle in Tunisia. Patton, sensing victory as he peers onto the battle field from his command post, growls, “Rommel, you magnificent bastard. I read your book!”
Every day I say the same thing to myself.
The Erwin Rommel book in question is most likely to be Infantry Attacks, published in the middle of the 30’s as ‘Infanterie greift an’. It discusses the Stoßtruppen tactics used in the first world war. Reading as many books as possible on a subject, especially by your competitor, may just give you the advantage you need to win.