Michael Covel

This is a great article from a columnist who writes about professional hockey for ESPN. The article has little to do with hockey and everything to do with amassing wealth. Perhaps the best line from it

You work, you save, you sacrifice, you play hurt, you don’t call in sick, you laugh, you cry, you care, you give, you drink beer and you never give in. Right to your last breath.

The father of the Turtles Richard Dennis was very wise even back in the day. From an article circa 1976 wholly relevant to today.

Since 1996 I have seen an absolute ton of hero worship in the investing space. It always strikes me odd to see people blindly follow along cult style to people who play the part. Thinking about that tonight I recalled a passage from the TV series “King of the Hill” that did not make my TurtleTrader book.

In the episode a washed up former Dallas Cowboy football player moves into Hank’s neighborhood. The football player who was never that good to begin with, but to weekend warriors like Hank and his buddies, it does not matter. He was a former pro football player - he was a god to be worshiped - that is until the guys found out the real story of ‘Big Willie’:

BIG WILLIE: Hey, you guys wanna see some stuff from my career? Hank, you’ve seen this. It’s the football from that kick I blocked. Oh, and here’s a picture from that kick I blocked…and that’s how I blocked that kick.

HANK: That story gets better every time you tell it.

But later, as Hank’s son points out, Big Willie is not that impressive a football legend.

BOBBY: You know, for a guy who was a pro athlete, Willie’s drunk a lot.

Finally, Hank’s neighbor Kahn, who knows little about football, gets tired of Big Willie’s beer bashes that are keeping his family up at all hours of the night. He senses that Willie is a loser hanging onto an unimpressive past:

KAHN: I don’t sleep. My career is going in the toilet. My little girl can’t study. And all because some fat jock slob play a little football and “block a kick.” I don’t even know what it means, to block a kick, but if you can do it, then any idiot can do it!

Quotes from “New Cowboy on the Block”
Written by Dean Young
Directed by Cyndi Tang-Loveland

Warren Buffett has once again debated the value of hedge funds. True, not all funds are created equal, but there are no doubt many funds that beat the averages and in some instances by wide margins.

From “Chan” comes feedback:

Dear sir, We have purchased your book titled trend following and we could hardly finish half of the book as it was poorly written with no concrete information that we can learn from. Then we came to know of another book also written by you. On the safe side we did not buy it but we borrowed it from the local library. Regret to say but your writings is a rambling of nonsensical writings with no information that we can learn. Your writings is poor when compared to William J Oneil where a lot of information can be learnt from the book. Yours sincerely, Chan

Apparently Chan doesn’t like my writings!

A great comment on that evil concept of speculation!

There is nothing unusual about the oil move of the last year. Markets, and go look at just about chart of the last 40 years with a big move, shift unexpectedly and move great distances all the time. Stocks, gold, cotton, corn, dot-coms, whatever - markets trend. Oil just so happens to be the life blood that affects everyone’s pocketbook perhaps more so than any other market, but from a trend perspective, and especially if you have been long oil in some form or another, has been a beauty of a money making opportunity. Better to live in the here and now than sit around and complain about the good ole days, even if the good ole days were only a year ago! Time marches on. Adjust or die.

Michael Marchese of Marchese Capital Management, LLC had a well written piece that caught my attention:

This past week there was an article in the Financial Times denouncing price as a proper indicator for determining entry and exit triggers in trading, touting ‘value’ as a true measure of when trading should begin and end. There are many perspectives on the street and just as many ways to make and lose money. At Marchese Capital we recognize that there is no one ‘right’ way to trade. In fact, our belief is that the trading strategy must suit the personality of the particular trader. If you can find a strategy that suits you and your circumstances then you have a chance at succeeding. If you pigeon hole yourself into someone else’s perspectives you are destined to fail.

Price happens to be my choice for exit and entry indication. I am partial to price because there is no truer value of a liquid security than price itself. My faith is also in the theory of ‘now’. For me there is no future, it simply doesn’t exist, there is only now, and the current price represents the only value that anyone can know with any true sense of reality. ‘Future value’ is a phrase used throughout history by charlatans. Whether they are dressed in turban and cape, gazing into a crystal ball or wearing gray pinstripes, looking you straight in the eye and working on Wall Street, they are no more than soothsayers trying to sell you on their ability to predict the future, a future which frankly does not exist.

Value means different things to different people. In the market there is a number in front of you, one party just bought there and another sold, it represents the current market value, and traders call it ‘price’. Let’s not confuse the issue with a newspaper writer’s smoke and mirror ratios, historically based statistics, and conceptual view of the books and records of a corporation, they all lead to one thing - predictions. Great for your ego when you are ‘right’, great for cocktail party conversation, but when you are trading with real money and trying to turn a profit;

…cut your losses, let your winners run, leave your ego at the door.

At Marchese Capital the focus is not on fruitless prediction, the focus is on bringing true value to our clientele, in the form of absolute returns, gained through the management of downside risk and the disciplined trading of market price.

Marchese of course was writing for his firm, but in his comments are nuggets for everyone whether his client or not.

I know Lindzon. An interesting and perhaps very wise long term view.

Yes, the prices of goods and services have been rising dramatically in the States, but not 100,000% like here. That’s an economy collapsed.

Oil predictions seem to be feeding on themselves! How high can oil go? As high as it wants to go. Or said another way: it will trend until it stops.

Been on the road for the last several days. Capturing via a 2000 mile round trip car ride real estate “pain” on the East Coast. If you have a story to tell I am in Delray Beach, FL and Miami Beach through tomorrow.

Hunter S. Thompson had a way with words and great insight into the human condition:

In a nation ruled by swine, all pigs are upward–mobile and the rest of us are f––-ed until we can put our acts together: not necessarily to win, but mainly to keep from losing completely. We owe that to ourselves and our crippled self–image as something better than a nation of panicked sheep.

A MP3 on Warren Buffett, his shareholder meetings and derivatives.

Before he was writing for Trader Daily I had the chance to interview Michael Martin. Martin, who earlier trained under Ed Seykota, now works with a successful family office. Martin gave us a great body language example in the film using his arm as a trend pointing to the often irrelevancy of entry. He brings it all back to stop loss plans and risk management.

From Barry Ritholtz.

Mark Walsh, a second generation Turtle I mention in my book, has an annualized return of 23.72% since September 1985. Those are nice numbers for a style of trading that doesn’t work!