Ep. 331: Douglas Emlen Interview with Michael Covel on Trend Following Radio

Synopsis: Michael Covel speaks with Douglas Emlen on today’s podcast. 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. Covel and Emlen discuss taking our lessons from animals; the connection with human and animal arms races; international hacking; comparing the fiddler crap to US and USSR bombers during the cold war; defining evolutionary biology; how an arms race can run its course via the example of the sabertooth tiger; the arms race in the trading world; how the cuttlefish has found its way around the “alpha” system; finding “workarounds” when the deck is stacked against you; war games and detente; why predictability in weapons is important; one-on-one showdowns; and the importance of being nimble. Emlen’s book, Animal Weapons: The Evolution of Battle, is available on Amazon. Want a free trend following DVD? Go to trendfollowing.com/win.

Doug Emlen Interview with Michael Covel

Doug Emlen Interview with Michael Covel

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Posted in Interviews, Multimedia, Podcasts, Trading 101, Trend Following

“Every Investor Who Invests In Anything Should Read It”

Feedback in:

Mike, we were referred a client from a futures broker about a month ago. He has been investing in CTAs for a few years now, but had no clue what trend following was. He invested in us because of our 2014 results (chasing returns). When he started talking about not suffering drawdowns too well, I sent him “Trend Following”. Below was his response. Still a long way to go in educating the masses, but hopefully this is a start.

[Name]

Here:

Hi [Name], Thank you very much for the book it is very interesting and has lots of good quotes. I think every investor who invests in anything, should read it. Thanks again.

[Name]

More voices and their view of Trend Following.

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Posted in Book Reviews, Feedback, Trend Following

All Michael Covel Trend Following Episodes

Michael Covel in Japan

Michael Covel in Japan

Note: These episodes play by clicking “listen”. You may also want to “save as” each file to your device. All episodes on iTunes too.

Michael Covel in Singapore

Michael Covel in Singapore

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Posted in Trend Following

Ep. 330: Nigol Koulajian Interview #2 with Michael Covel on Trend Following Radio

Synopsis: Michael Covel speaks with Nigol Koulajian on today’s podcast. Koulajian is the Founder and Chief Investment Officer of Quest Partners LLC. He has been designing and trading short-term and long-term technical systems for over 22 years. Covel starts the episode with some comments on Ray Dalio’s recent comments drawing a parallel to 1937. Then Koulajian and Covel talk all things trend following in the CTA space. Covel and Koulajian discuss trend following performance in 2014; volatility vs. skew; why having a good Sharpe Ratio is not the be-all-end-all; the notion that alpha in the CTA world is not a result of skill; correlation between tail risk and the Sharpe Ratio; central bank action and the Swiss Franc; why trend following may not be as good in equity market corrections now as it has been in the past; why trend following is not about the super-complicated mathematics; getting outsiders to understand drawdowns; emotional intelligence vs. intellectual intelligence; media bias against trend following. For more information on Nigol Koulajian, visit questpartnersllc.com. Want a free trend following DVD? Go to trendfollowing.com/win.

Nigol Koulajian Interview with Michael Covel

Nigol Koulajian Interview with Michael Covel

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Posted in Interviews, Multimedia, Podcasts, Trading 101

Hocus Pocus, Smoke and Mirrors Is Not Trend Following

Feedback in:

Very stimulating to hear [listen] an “original Turtle” still thrilled and verifying the TF he learned in 1983. Like Parker, as I read your books, validated in your course, I believed it “hook, line, and sinker.” The rest is hocus pocus, smoke and mirrors. Been there, done that.

Thanks,
[Name]

Thanks!

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Posted in Feedback, Trend Following

The Wrong Way to Think About Trend Following

Listener: My first question. How can a $50,000 portfolio generate a $1000 per week return on average over a 1-year period trading shares (stocks) on the Australian Share Market?

Covel: I don’t follow. You want to consistently make 1000 per week? Impossible. Or you you want to make essentially 100% in one year? Possible, but high risk. Of course, no guarantees and you can’t force a particular year to give you anything.

Listener: My second question: What is the expected time frame for someone new to share trading to master trend following strategies and be profitable? (This is assuming they can master themselves and their attitudes to risk, share trading and money management.)

Covel: No one time frame, but in under few months you could be trading. Also, see: www.trendfollowing.com/faqs.

Listener: Reading your books The Complete TurtleTrader and Trend Following. In The Complete TurtleTrader you use company names that did not exist when the turtles were trading [Note: The Turtles are still trading]. I know they are examples, but somehow it loses credibility because they could not have been trading them. So that was made up. My mind then creates this picture. Google inserted to make this story sound better/more modern (maybe?).

Covel: You read The Complete TurtleTrader and that is your conclusion? This is not for you, clearly.

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Posted in Feedback, Trend Following

The Successful Exception

Feedback in:

Dear Michael, Hope this meets you well. I’ve been a fan of your work for a couple years now and definitely credit your first book for much of my success today (went from struggling prop trader to currently running a registered corporate advisory firm at age 27). Just seen your response to one of your readers about focusing on FX, sorry but I disagree with you on this one, fair enough your response makes sense to a certain extent but it’s worth doing a bit more research and looking at the available data in terms of monthly and annual returns before concluding since there is ample evidence to suggest that trading only FX can be equally important as having a traditional CTA in a typical equity/bond portfolio. You already interviewed Chris Cruden who focuses on FX, besides Chris, there are numerous firms focusing on FX managing several billions. If you need help finding such firms, please do not hesitate to give me a shout. However, going forward as a company I hope to introduce the typical managed futures product to our clients in the future only because it offers a different return profile to what we currently achieve at the moment trading FX only but not to necessarily replace what we do. It is definitely possible to trade only FX using trend following strategies by diversifying across several regions which are uncorrelated just as you would in your typical CTA, make no use of leverage and still achieve some decent risk adjusted returns. Just thought I’d add my two cents in. Take care and keep up the good work.

[Name]

Chris is the successful exception not the rule. You need diversification as a trend following trader. You are not just disagreeing with me – as you know. You are welcome to send me the track records of the FX only trend following firms.

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Posted in Feedback, Trend Following

Trading Food For Thought

Interesting reads:

Enjoy.

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Posted in Psychology, Trading 101, Trend Following

Ep. 329: Terrance Odean Interview with Michael Covel on Trend Following Radio

Synopsis: Michael Covel speaks with Terrance Odean on today’s podcast. Odean is the Rudd Family Foundation Professor and Chair of the Finance Group at the Haas School of Business, University of California, Berkeley. Odean has extensively researched into the empirical data on active trading. He is very well-known for his work in behavioral finance and is once of the early pioneers. Covel and Odean discuss how Odean describes his work; how Odean started his work looking at individual broker statements; the disposition effect; how Odean was able to get individual investor data when he was starting out; looking at early thinkers in the arena of behavioral finance; why people buy low and sell high; why statistics are one of the best ways to understand what’s going on in the market; the difference between male and female investors; why overconfidence hurts investors; attention and how we make decisions; why a simple heuristic from Seinfeld could be the best way for most investors. For more information on Terrance Odean, visit odean.org. Want a free trend following DVD? Go to trendfollowing.com/win.

Terrance Odean Interview with Michael Covel

Terrance Odean Interview with Michael Covel

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Posted in Interviews, Multimedia, Podcasts, Trend Following
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