Subscribe now and watch my free trend following VIDEO.

The Babe Ruth Effect in Venture Capital and Trend Following

Consider from The Babe Ruth Effect: Frequency vs Magnitude (PDF):

“Building a portfolio that can deliver superior performance requires that you evaluate each investment using expected value analysis. What is striking is that the leading thinkers across varied fields — including horse betting, casino gambling, and investing — all emphasize the same point. We call it the Babe Ruth effect: even though Ruth struck out a lot, he was one of baseball’s greatest hitters.”

Chris Dixon adds:

…about ~6% of investments representing 4.5% of dollars invested generated ~60% of the total returns. Let’s dig into the data a little more to see what separates good VC funds from bad VC funds.

Further from Dixon:

The home runs for good funds are around 20x, but the home runs for great funds are almost 70x. As Bill Gurley says: “Venture capital is not even a home run business. It’s a grand slam business.”

Speculation is not about a consistent 1% a month. That’s fantasy.

More TF resources.

The Babe Ruth Effect
The Babe Ruth Effect

Check out the resources page for Trend trading for dummies pdf.

Trend Following Resources for New Traders

Feedback in:

Hello Mr. Covel,

Having passed the CPA exam last year, I subscribed to the Wall Street Journal and found your podcast recently. As instructed on your podcast, I am emailing you because I would love any material for new investors that could help me grow and develop past the buy and hold phase I am currently in and learn to become a capable, active investor.

Love the podcast and appreciate your passion and content.

Sincerely,
[Name]

Starting steps: right here.

Trend Following Resources Start Here

Feedback in:

Hi Michael,

I’m a relatively new listener to your podcast and wanted to thank you for the quality material you present week over week. At the end of your recent show with guest Evan Carmichael you advised listeners to reach out if they have a sincere interest in trend trading. That’s me. I left my job with Vanguard to pursue cryptocurrency investing and so far my buy and hold strategy with Ethereum has worked well… but not good enough. I see a lot of potential for various aspects of technical analysis and momentum trading to be incorporated into the strategy I’m currently developing. I would greatly appreciate any materials you can offer to help me along the way in my journey toward actualizing a real trend trading approach to this asset class.

Much obliged,
[Name]

Thanks for the feedback.

Starting steps for more? Go here.

How to Start in Trend Following

Feedback in:

Hi Michael,

I’m a huge fan of your podcasts and have finished your books Trend Following, Little Book of Trading and Trend Commandments. I also listen to your podcast pretty religiously and am working through your early episodes with the fund managers. I’m currently in medical school living off loans so I use the public library for books whenever possible. I’m using just 50 day and 200 day moving averages and reading some of [name] works now. Do you have any advice on sources and ideas for trading systems and rules? Or any advice on the application of trend following.

Sincerely,
[Name]

Here is one way to start and another way to start.

Approach the Market in a New Way

Feedback in:

I want to thank you for writing your books. They got me to approach the market in a new way. I have dived head long into algo/quant trading through trend trading. As long as you trust the system and follow through you will succeed. I think that the simpler systems are better than complex. Also the markets are noisier than they were 20 years ago which make trend trading harder, but it is still the most successful method for trading. Thanks again Michael.

[Name]

Thanks.

Starting Point: Trend Following Suggestions

Feedback in:

Hello Michael! Honestly thank you so much for this opportunity, unfortunately I am 21 and do not have enough money to take you up on this offer. I will most definitely get both of your books. Your podcasts usually get me to laugh! You are a true bad ass as well. If you could suggest any books to me (the more the better) that I can also read to start my mastery of being a trader I would appreciate that. Thanks in advance.

Sincerly,
[Name]

Go: 1, 2, 3, 4.

That list should keep you busy.

Trend Following Mentoring Works

Feedback in:

I hope you are doing well on your journey. It has been a long time since we touched base. I have been incredibly busy to say the least, but at least I would say busy in a good way. I consider you one of my earliest mentors through your work that I have reviewed extensively. I will say that I have traveled some distance since that first introduction and continue to conduct rigorous research into the marriage between math/science and market mechanics. 2014 has been a very revealing year for me. I have realized a net ROI of approximately 80% in my retail futures account with a max drawdown of approximately 27%. I do not take this startup success for granted. My research has revealed that different market environments flatter different approaches. September-December has been interesting with the infusion of volatility into the markets benefiting my strategic and tactical approaches. I am also expanding on my arsenal of computer programming abilities as that is the language of mathematics in our day and age and essential for my further development as a market speculator. In 12 to 18 months I look forward to starting my own quant fund. I am enjoying this journey so much that I think this will likely become one of my life long endeavors. I wish you all the best and thank you for your immense contribution to my development as a trader. I look forward to speaking with you further when I am at a certain stage of my development as a money manager and perhaps meeting you in person one day as well.

Best,
[Name]

Thanks for the nice note. Best of luck.

Learn to be a trend following trader.
Sign up free today.