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Ep. 536: The Most Important Thing with Michael Covel on Trend Following Radio

The Most Important Thing with Michael Covel on Trend Following Radio
The Most Important Thing with Michael Covel on Trend Following Radio

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Howard Marks is a billionaire value investor with four decades of success. Although a value investor, his thought process mirrors trend following in many aspects. Michael plays an excerpt from Howard covering his thoughts on price, the lack of value in forecasting, efficient markets, surviving market randomness, and high yield bonds. Trend following and value investing may be two different worlds, however, there is a lot of overlap in how Howard trades and how trend followers trade.

In this episode of Trend Following Radio:

  • Price action
  • Forecasting
  • Value investing
  • How to think about investing
  • Black swans

“You should not act as though the things that should happen will happen.” – Howard Marks

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Buy and Hold Works, But Do You Want It?

Feedback in:

Greetings Mr. Covel,

Meb Faber recently stated on your podcast that buy and hold, value investing, and trend following are techniques of investing that “work.” I was surprised that you did not challenge his assertion. Do you agree with him? If Faber is correct, maybe the reason why is because an investor must select the technique of investing that is best suited to him/her as oppose to selecting the “best” method of investing. Comments?

Regards,
[Name]

Buy and hold works. The question: Do you want that “works”?

That is a personal choice.

Isn’t? I don’t want buy and hold. And of course other strategies work. I have had the likes of Toby Crabel and Larry Williams on my show.

Everyone needs to dig deep and pick what they want in life.

Larry Williams
Larry Williams

Trend Following Goes Against Established Orthodoxy

Trend following can be a counterintuitive. It goes against the orthodoxy of buy and hold, fundamental analysis, value investing, Warren Buffett, EMH and Federal-Reserve-Trust-the-Government ZIRP policy. Further, it is not day trading, HFT, Elliott wave or candlestick patterns. All market prediction strategies are false narratives.

Trend following is something different. Trend following reacts to market movements.

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