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Trend Following with Michael Covel

Bestselling author Michael Covel is the host of Trend Following Radio with 7+ million listens. Investments, economics, decision-making, human behavior & entrepreneurship--all passionately explored. Guests include Nobel Prize winners Robert Aumann, Angus Deaton, Daniel Kahneman, Harry Markowitz & Vernon Smith. Also: James Altucher, Dan Ariely, Jean-Philippe Bouchaud, Kathleen Eisenhardt, Marc Faber, Tim Ferriss, Jason Fried, Gerd Gigerenzer, Larry Hite, Sally Hogshead, Ryan Holiday, Jack Horner, Ewan Kirk, Steven Kotler, Michael Mauboussin, Tucker Max, Barry Ritholtz, Jim Rogers, Jack Schwager, Ed Seykota, Philip Tetlock & Walter Williams. All 600+ eps at www.trendfollowing.com/podcast.
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Bestselling author Michael Covel is the host of Trend Following Radio with 7+ million listens. Investments, economics, decision-making, human behavior & entrepreneurship--all passionately explored. Guests include Nobel Prize winners Robert Aumann, Angus Deaton, Daniel Kahneman, Harry Markowitz & Vernon Smith. Also: James Altucher, Dan Ariely, Jean-Philippe Bouchaud, Kathleen Eisenhardt, Marc Faber, Tim Ferriss, Jason Fried, Gerd Gigerenzer, Larry Hite, Sally Hogshead, Ryan Holiday, Jack Horner, Ewan Kirk, Steven Kotler, Michael Mauboussin, Tucker Max, Barry Ritholtz, Jim Rogers, Jack Schwager, Ed Seykota, Philip Tetlock & Walter Williams. All 600+ eps at trendfollowingradio.com/rss.

Dec 10, 2018

Time to Blame the Computers Again with Michael Covel on Trend Following Radio.

Dec 7, 2018

Follow the Opportunity with Michael Covel on Trend Following Radio.

Dec 3, 2018

Daniel Crosby is a psychologist, behavioral finance expert, asset manager and author of several books. His most recent book is “The Behavioral Investor.” Daniel’s background in behavioral psychology has taught him to look at markets as a backdrop to view human behavior in a real world setting.

Why did Daniel decide to write his latest book? What was his motivation? Daniel is a regular speaker at conferences. At those speaking engagements he was continuously hearing misinformation presented about behavioral biases in trading. He wanted to set the record straight about how to tap into emotions and explain how much personalities really play into trading.

As a psychologist who works in the markets, Daniel gets real time information on how people are feeling by looking at how price movements fluctuate. Daniel cites a study showing that 94% of the time rules beat out discretion in the markets. Betting on your “gut” almost always leads to ruin. Trading off rules doesn’t just lead to a better trading record, it also leads to less brain damage and heartburn. Daniel found about 200 different biases that can harm up trading. Within those 200 biases Daniel has created four main categories: ego, emotion, attention, and conservatism. He shows through facts and data how systematic trading is better on the pocket book as well as fostering a healthier lifestyle.

In this episode of Trend Following Radio:

Functional fictions
Evolution
Human behavior in market price
Loss aversion
Behavior bias
Contrarian perspective

Nov 30, 2018

Ann Mei Chang is author of “LEAN IMPACT: How to Innovate for Radically Greater Social Good.” She was a technology executive with more than 20 years of experience at Google, Apple, and Intuit, as well as a range of startups before she pivoted her career into the private, social and non-profit sectors. She now works with companies around the world to help streamline growth and innovation.

Innovation is necessary for any company to grow. Ann helps non-profits and more risk-adverse companies properly take risks to improve their process. From global development to technology companies – there is a lot of uncertainty to combat against, grants to be filled as well as shareholders to appease. When tackling big issues investors and the public want to see tangible results quickly. Ann shows a balance between thinking big, keeping an eye out for what can be done better and keeping track of ever changing demand. Audacious goals are important, but you also need a process and plan of what is going to get you to that audacious goal.

Innovation is not only about creating the latest new thing, but rather taking something that is already created and making it better. Google wasn’t the first search engine, but they made it better. Facebook wasn’t the first social network, but they improved on it and made the experience better. Ann gives the example of a 700 year old invention – eyeglasses. With how long eyeglasses have been around, there is still about 2.5 billion people without access to them. Vision Spring is a non-profit that was created to reach these people without access. Vision Spring’s initial business plan wasn’t reaching as many people as planned and money was running out quickly. With continuously being open to making pivots in their business model, they continue to grow and reach larger and larger amounts of people. It is all about adaptability and innovation within whatever company your are at – non-profit to big technology.

In this episode of Trend Following Radio:

Political grandstanding
Process vs. outcome
Understanding your base customer
Projecting bias
Non-profit work

Nov 26, 2018

You Are Responsible with Michael Covel on Trend Following Radio.

Nov 23, 2018

The Trend Following Mindset with Michael Covel on Trend Following Radio. A holiday reminder on great thinking!

Nov 19, 2018

Bradley Hope is a finance and malfeasance reporter for the Wall Street Journal and his latest book is “Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World.” Bradley is a Pulitzer finalist and winner of the Gerald Loeb Award for international reporting and the TRACE International Award for Investigative Reporting.

“Billion Dollar Whale” profiles a man named Jho Low – a young Malaysian man from a relatively wealthy family. He grew up attending the best boarding schools and finished up schooling at The Wharton School. During his time at Wharton he created a private equity group. He was able to get some of his wealthier friends and their parents to throw money into the fund. From a young age he knew what made people tick and had a talent connecting with very wealthy and strong political figures. Jho eventually got an audience with the Prime Minister of Malaysia to set up a fund for the Prime Minister’s campaign – this is where the real story of Jho Low starts to unfold.

Jho quickly went from a guy with a million or so dollars to worth about $700 million over night. He began throwing extravagant parties, renting private yachts and planes, and rubbing elbows with the world’s elite. He started buying giant stakes in companies and was even able to borrow 6 ½ billion from Goldman Sachs. The extent of how much he has stolen and from who is still largely unknown. Jho Low figured out how the world works, develop relationships and was the king of understanding that you could buy just about everything. With the scandal still unfolding in real time, Bradley’s book has created waves in countries around the world.

In this episode of Trend Following Radio:

  • The Wolf of Wall Street
  • Sovereign wealth funds
  • Money laundering
  • Goldman Sachs
  • Banking compliance
Nov 16, 2018

Daniel Peris is author of “Getting Back to Business: Why Modern Portfolio Theory Fails Investors and How You Can Bring Common Sense to Your Portfolio” and a portfolio manager at Federated Investors. Before transitioning into asset management, Peris was a historian focused on modern Russian history, but now self identifies as a business investor.

Daniel’s clients tend to be more conservative investors that approach markets from a business perspective rather than a passive investment approach. His main focus is to help clients make better business like decisions about markets. Not everyone has the time or desire to be an active investor, however Daniel hammers the point that if you don’t want to take responsibility for your own trading, there are plenty money managers for hire that will align with investors needs.

Daniel has strong views on economic practices like the efficient market hypothesis (Eugene Fama) and modern portfolio theory. Daniel sees the modern portfolio theory as particularly outdated. Modern portfolio theory was a hypothesis developed by Harry Markowitz in his paper “Portfolio Selection,” published in 1952. It is an investment theory that investors can build portfolios to optimize or maximize potential return based on a prescribed level of risk within the market. This theory governs the typical investors portfolio and is the most influential economic theory in finance and investment today. Daniel argues in his book and on the podcast that this system was developed in the 50’s and does not connect to 2018 investing.

In this episode of Trend Following Radio:

Modern portfolio theory
Efficient market hypothesis
Value investing
Momentum investing
Diversification
Portfolio selection
Defining risk

Nov 12, 2018

Peter Boettke is economist of the Austrian School. He is currently an economics and philosophy professor at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU. His newest book is “F. A. Hayek: Economics, Political Economy and Social Philosophy (Great Thinkers in Economics).”

Peter got hooked on economics during college after being hired for his first job – digging pools. He saw taxes being taken out of his pay and personally felt the negative effects. The philosophy behind why his checks were being garnished didn’t sit well with him. Rather than be frustrated, he got fascinated with the way economics worked and quickly saw there was something obviously wrong with the way government was ran. Along with signing up for all the economics classes he could, Peter went to the library and read. He had “a-ha” moments in those reading sessions that has molded him to be the economist he is today.

Michael and Peter touch on a broad scope of topics including: What is Peter’s perspective on President Trump’s view of trade wars and tariffs? Should intellectual property be protected? What is rent seeking and how does it relate to Jeff Bezos? What separates the American entrepreneurial spirit from entrepreneurs overseas?

In this episode of Trend Following Radio:

Trade deficits
Trump politics
Politics in the marketplace
Zero sum game
Jeff Bezos and rent seeking
The market for privileges
Merchant class mentality

Nov 9, 2018

Paul Britton is a portfolio manager at Apollo Systems Research Corporation.

What got Paul going down the trend following path? In high school Paul’s dad put him into a stock that went from $5 to $60. He took his profit and put money into a couple more stocks that turned out to be winners as well. These lucky trades peaked his interest in markets. Shortly after making these initial trades, Paul’s dad also gave him a copy of “Reminiscences of a Stock Operator.” He started working and looking at data trying to see if he could get a system of his own to work. He quickly learned that you can play around with entry and exit points, markets, etc., but as long as you pick up on the big trends and ride them until they lose–that was the #1 way to make money.

Paul lets the experts in different markets such as milk, coffee, orange juice, sugar, stocks, currencies, etc. “tell him how to trade” by showing their opinions hidden within the price. “You don’t need a fundamental expertise to be trading any of these markets.” Paul is in 110 different markets. He trades strictly off price and has no idea outside of price “why” stocks are going up and down. Every strategy they develop at Apollo Systems Research Corporation has to work on many markets and have maximum diversification. Paul loves adding diversity to his portfolio where other trend followers may not be.

In this episode of Trend Following Radio:

Momentum bias
Let your winners run
Fundamental trading
Diversification
Global macro trading
Compounding
Supply and demand

Nov 5, 2018

One of the Omaha Guys Lays It Out with Michael Covel on Trend Following Radio.

Nov 2, 2018

Deliberate Practice with Michael Covel on Trend Following Radio.

Oct 29, 2018

My reach back in time to a blast from the past on Trend Following Radio.

Oct 26, 2018

Howard Marks is an investor, writer and author of “Mastering the Market Cycle: Getting the Odds on Your Side.” After working in senior positions at Citibank early in his career, Howard joined The TCW Group, Inc. in 1985. He led groups within the company responsible for investments in distressed debt, high yield bonds, and convertible securities. After 10 years at The TCW Group, Inc. he co-founded Oaktree Capital Management.

Howard got into high yield bonds in August of 1978. This was a turning point in financial history because up until this moment only good companies could borrow money. High yield bonds opened the market to more risky companies and also showed Howard a different way of looking at markets. The first company he worked for had a strategy of buying stock in the 50 most successful companies in hopes they would continue to go up forever. With the advent of the high yield market he saw himself making good and steady money off of the worst/most risky companies–turning everything he had been previously been taught upside down.

Howard has lived through over 50 years of financial history and with his new book he has gone back hundreds of years to examine and study cycles. So how does Howard define a cycle? There are many different cycles–cycles in science, speed, people inhabited, etc. Cycles in the financial world are produced by people and are created by their feelings. The cycle represents a fluctuation in something around a mid-point, but time-frames and reasons for fluctuations do not repeat themselves–except for in human behavior. Looking back hundreds of years there are a few things that are underlying in every financial boom–too much optimism, too much money chasing, and too much risk aversion.

In this episode of Trend Following Radio:

High yield bonds
Financial cycles
Sub prime bubble
Dot-com crash
Continued learning by reading
Risk management
Decision making

Oct 22, 2018

Run Rabbit with Michael Covel on Trend Following Radio.

Oct 19, 2018

Allison Shapira is founder and CEO of Global Public Speaking LLC and author of “Speak with Impact: How to Command the Room and Influence Others.” She teaches at the Harvard Kennedy School and offers keynote speeches, workshops, and executive coaching for Fortune 500 companies, government agencies, and nonprofits around the world.

What was the process for pulling research together for her new book? Conducting interviews? Pulling from personal experience? Allison has been teaching on public speaking for over 15 years. She has hundreds of stories spanning across just about every industry – giving her the depth of knowledge needed for this book. Allison saw trends of what worked, didn’t work and how to apply that information to the real world and real people. Public speaking is a critical skill in the professional world and it is a skill that needs training and coaching to become good at. Having knowledge and expertise on a subject alone does not make you a good speaker. Speaking clearly and concisely is a craft that demands hours of practice to feel comfortable.

Allison has had some brilliant and academically distinguished mentors, however the people she has learned from and been inspired by the most are in workshops. She is inspired by getting people “over the hump” and seeing scenarios that prove that public speaking is a skill that everyone can execute.

How does she get students over that “hump?” Vocal variety, eye contact and body language are three non-verbal communication elements that are key in giving an engaging presentation. Also, when people believe in what they are speaking on and are passionate about it, they seem to be less nervous and have less anxiety. A good presentation should feel like a conversation with the audience. With that being said, there is no such thing as perfection when it comes to public speaking. There is always room for improvement – Practice, practice, practice.

In this episode of Trend Following Radio:

Authenticity
Public speaking
Karaoke singing
Vocal variety
Eye contact
Body language

Oct 15, 2018

Las Vegas Roundtrip with Michael Covel on Trend Following Radio.

Oct 12, 2018

Jeffrey Gitomer is an author, professional speaker, and business trainer, who writes and lectures internationally on sales, customer loyalty, and personal development. He is best known for “The Little Red Book of Selling” and his newest book, coming out at the end of October, is “Truthful Living: The First Writings of Napoleon Hill.”

Jeffrey was introduced to the Napolean Hill Foundation about 10 years ago and volunteered to start writing for their newsletter with an article every Friday. Napoleon Hill was the founding father of positive attitudes. In 1917 he had a course in advertising and selling. At the end of every course he would lay out positive thinking. When the Napolean Hill Foundation found these writings, what they call “After the Lesson Visits by Napolean Hill,” the foundation approach Jeffrey about writing a book outlining his teachings. Jeffrey did not hesitate to say yes – and after years of pining over these lecture notes, his newest book was formed.

What energizes Jeffrey and motivates him to write? He loves what he does. Every day is a great day for him. He doesn’t have two days that are alike, or two books alike, or two speeches alike. He is most excited about “What is next?”. Jeffrey lives in the moment but is ready for tomorrow and his ideas, strategies, and connections – they are all in place to set him up for success in the present day and the next.

In this episode of Trend Following Radio:

Personalization
Service as the foundation of success
Truthful living
Communication

Oct 8, 2018

Tom Basso is back for episode 700. Tom is featured across Jack Schwager’s “Market Wizard” series and most famously known as “Mr. Serenity.” He was featured on episode 400 of Trend Following Radio with a mega 4 ½ hour episode, and today he is back for this new episode. Now retired from managing client money, Tom was president and founder of Trendstat Capital Management. He became a registered investment advisor in 1980, a registered commodities advisor in 1984, and was elected to the board of the National Futures Association in 1998.

Although Tom has been retired for over 15 years he still gets emails daily from aspiring traders. While on vacation with his wife, they came up with a more efficient solution to answering all these emails. Tom decided to start an educational platform that he more candidly describes as a “Tom Basso brain dump into a website.” He has had 28 years of experience managing money and over 40 years of managing his own money. With all that knowledge, his new website addresses what he feels new and old traders alike struggle with. All content on his website will be free aside from his personal training videos and a narrated version of his book “Panic-Proof Investing.”

What is it about the individual that is so important in trading? How do you become the best trader you can be? How does exercise and diet play into trading? How do you separate self worth from your net worth? How do you stay young in your energy? Michael and Tom keep their conversation on trading today more philosophical rather than technical.

In this episode of Trend Following Radio:

Trend following philosophy
Separation of net worth from self worth
How to view winning trades vs. losing trades
Staying mentally young
Brooks Koepka vs. Tiger Woods
Dealing with stress in the markets
Social media stressors

Oct 5, 2018

Tiffani Bova is author of “Growth IQ: Get Smarter About the Choices that Will Make or Break Your Business.” She has a unique background, with 20 years of experience spread between start-ups and fortune 500 companies. Tiffani has put together a first hand look at what it takes to start and run a successful business as an entrepreneur.

How did Tiffani get her start in business? Early in her career she would ask executives and CEO’s constantly for little tid-bits of knowledge–she wasn’t afraid to step out of her comfort zone and ask for help. That feedback and confidence building was the cornerstone to becoming who she is today. What gave Tiffani the courage to talk to these leaders and say “please help and give me some advice?” Sports played a huge role. Win or lose, she learned how to conduct herself and hold her head high no mater what the turnout of a game was.

Growth IQ is a dense book with many case studies. Tiffani researched about 30 companies from all backgrounds including Kylie Cosmetics, Honest Co., and Under Armor–using them as examples to show how to build and sustain successful businesses. She also shows companies hitting forks in the road and how they overcame. Every case study may not be useful to everyone but there are lessons to be learned from all.

Tiffani stresses that it is sometimes the little changes made that make all the difference between a failed venture or a successful one. What are some good questions to reflect on if your business is not where you think it should be?: Is the order you are presenting your product off? Are you selling to the wrong demographic? Are you giving customers the wrong experience?

In this episode of Trend Following Radio:

Flexing your confidence muscle
The power of now
Selling to your demographic
Buddhism
Growing a business

Oct 1, 2018

The Whipsaw Guy with Michael Covel on Trend Following Radio.

Sep 28, 2018

Jerry Parker is back on the podcast. He is the founder of Chesapeake Capital, was one of the original TurtleTraders trained by Richard Dennis and has had unbelievable success over his four decade career. Jerry brings to the table a straightforward way of breaking down how trend following works.

Trend following relates to everything – from Wall Street to baseball. One of Jerry’s early heroes was John W. Henry, a successful trend following trader and now owner of the Boston Red Sox. Michael and Jerry break apart how John W. Henry and others cross the trend following mindset into sports and beyond.

What is Jerry Parker’s worldview? “It’s dangerous out there and you cannot predict it. Stocks are not superior and they are not the go-to investment all the time. Pay attention to the trend. Protect yourself. Be humble, conservative and worried about risk.” He doesn’t see that view changing anytime soon for anyone – including investors. What do investors want? And do they know what they want? Jerry knows he can’t make everyone happy but he try’s to provide appropriate risk control for his clients without missing out on too much profit.

In this episode of Trend Following Radio:

Baseball analytics
Lumpy returns
Crisis alpha
Having a process and sticking to it
Value Investing
Bobby Axelrod

Sep 24, 2018

Michael explores new research showing pharmaceutical statins do nothing to help prevent medical problems relating to heart disease–if you have no risks. For years people have believed there was a special pill to save them from high cholesterol. Turns out, there is no special pill to help–exercise, eat well, get adequate sleep–these things are how you improve your health. It’s about personal responsibility. Trust yourself? Or trust the system that has been proven wrong time and time again?

$400 billion dollars has been lost in crypto currencies. Michael shares an example of a man who lost 95% of his $120,000 investment in Bitcoin. When Bitcoin started going down he tried diversifying into other crypto currencies. He said his learning process was like “solving the plot of a murder mystery.” The notion that he could use fundamental data and figure out how to trade Bitcoin was all wrong. Jerry Parker commented on this story by saying, “He should have studied trend following.” Having a stop in place, and looking at the data would have saved him from his financial ruin.

Statins and cryptos connect? You bet.

In this episode of Trend Following Radio:

Big pharma
Statins
Trusting the system
Personal responsibility

Sep 21, 2018

Scott Belsky is an American entrepreneur, author and early-stage investor best known for co-creating the online portfolio platform, Behance, Inc. He is author of several books with his latest being “The Messy Middle: Finding Your Way Through the Hardest and Most Crucial Part of Any Bold Venture.”

How did Scott get started as an entrepreneur? He started his first business with two partners selling paper products. He bootstrapped his way through the industry for the first few years – accepting no outside help. It wasn’t until five years into building his company that he had to move in the direction of needing to raise funding. However, at that point Scott and his partners had already built their company at their own pace and on their own terms.

When starting a new business there are a lot of questions that come up: How do I prepare for the long term? How do I hire someone? How do I fire someone? How do I structure team communication? How do I become a better decision maker? How do I continue to make a better product? Scott’s new book is a guide to help answer all these questions.

Uncertainty may be one of the biggest roadblocks in deciding to start a business. What does uncertainty mean to Scott? Uncertainty is a burden that must be processed continually. The more you embrace doing something on your own, the more you will learn how to cope and process that fear.

In this episode of Trend Following Radio:

Seth Godin
Entrepreneurship
Enduring lows and optimizing highs
Uncertainty in business
Starting a business
Staying engaged
Self awareness

Sep 17, 2018

Ken Kocienda was a software engineer/designer at Apple for over fifteen years and is now the author of “Creative Selection: Inside Apple’s Design Process During the Golden Age of Steve Jobs.” After being introduced to the internet in 1994 he taught himself computer programming and made his way through a succession of dot-com-era startups, before landing a job at Apple in 2001. He worked on software teams responsible for creating the Safari web browser, iPhone, iPad, and Apple Watch.

Ken entered college with the mindset of becoming a history professor or even a photographer. He had various interests in college, however none of them were in the technology sphere. He moved to Japan after college for a few years and upon moving back to the United States, he was introduced to the internet for the first time and instantly intrigued by it.

Ken interviewed for Apple in spring of 2001 before the iPod had been released--Apple was still relying on the Mac as their main revenue stream at the time. Ken had loved Apple products since he saw his first Mac in 1984 so when he was hired on at Apple it was surreal. His first job was to make Apple a web browser of its own – what we all know as Safari today. Later, in 2004, he joined the team to make the software for the iPhone’s touchscreen operating system, among other products.

Inspiration, collaboration, craft, diligence, decisiveness, taste and empathy are seven attributes Ken uses to describe how Apple became the success story they are today. Steve Jobs and Apple chased perfection and demanded nothing short of it.

In this episode of Trend Following Radio:

Pyramid of demos
Steve Jobs thought process
Apple company philosophy
Completely present in the moment
Reality distortion field
Creative selection
Green Bay Packers and Vince Lombardi

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