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Trend Commandments

Michael Covel (FT Press)

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The Little Book of Trading

Michael Covel (Wiley)

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The Complete TurtleTrader

Michael Covel (Collins)

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Trend Following

Michael Covel (FT Press)

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Broke (Film DVD)

Michael Covel

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Archive for May, 2009

Buy A Car, Lose Your Job, But Keep Your Car!

If you buy a new Saturn and lose your job they will make your payments for up to 9 months. Hmm…why not longer? Only a company propped up with taxpayer dollars could make such an offer to buyers, but wait this comes from the wires the other day:

Whether or not General Motors files for bankruptcy protection, the carmaker has made clear that its future plans do not include two brands – Saturn and Hummer – that once seemed to hold immense promise for the company.

So a commercial runs tonight enticing me with this great offer to make my payments if I lose my job, but a few days before that GM is talking of dumping Saturn. Here is how it works: say anything to appease anyone and if the situation changes — lie again.

Ed Seykota’s “Whipsaw” Song

From Ed Seykota’s “Whipsaw” song…His 6 Trading Rules:

1) Ride your winners
2) Cut your losses
3) Manage your risk
4) Use stops
5) Follow your system
6) Trash the news

Q: What do you do when you get whipsawed?
A: One good trend pays for them all.

Q: What do you do when you get a loss?
A: Kill it.

Q: How do you know when the risk is right?
A: You make a lot of money AND you sleep well at night.

Q: What do you do when the price breaks through (support and/or resistance)?
A: There is nothing to do because the stop (buy and/or sell) is there.

Q: What do you do when a drawdown comes and it gets real big?
A: Stick to the plan, pull the trigger.

Q: What do you do with a hot news flash?
A: Stuff it in the trash.

I posted the video about a year ago, but it is worth repeating:

Rich Dennis and MidAm Feedback

From a reader:

Mr. Covel, I picked up a copy of your “The Complete TurtleTrader” and finished it in one sitting. Very nice book and you did a very thorough job in your research. Your book is an improvement over [...]‘s book. You did a nice and quick explanation of N, which [...] failed to do in his seminars. I was thoroughly impressed when you mentioned Lucy Wyatt. Not too many people know of her involvement in the early stages of the Eckhardt-Dennis school of thought…You brought  up a lot of names from the MidAmerica Days. The person who was instrumental in Dennis’ (PDF) growth was a trader at the MidAm by the name of Harold Greenberg. Harold was a trend trader and it was he who always took out the positions that Dennis, Willis, Ware, and others who were panicked into selling. Harold would just go into the pit, and buy anything these boys sold to him, as long as it was a bull market. I always get a kick out of what Harold use to tell everyone: “I’ve been trading for over 30 years and I’ve been broke 29 of those years!” I would like to buy a copy of your book, autographed to me, “[...],” and whatever you can think of inscribing. How do I go about it? Thanks in advance. William [...]

Pravda: A Voice of Reason?

Pravda opines:

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people. True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists. Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters. First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish. Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America. The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe. These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them? These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters. Then came Barack Obama’s command that GM’s (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of “pure” free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions. So it should be no surprise, that the American president has followed this up with a “bold” move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK’s Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our “wise” Anglo-Saxon fools find out the folly of their own pride. Again, the American public has taken this with barely a whimper…but a “freeman” whimper. So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set “fair” maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Frank…has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive. The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left. The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.

Seth Green on Money

Lost Generation

From Bill Bonner today:

The luck of one generation is the curse of the next. Like Pericles, your parents inherited a dollar; they leave you a peso. They took over the strongest, richest, most competitive nation in the world. And like Pericles they minded everyone’s business but their own. Now, not only does the US owe money all over town, its government puts out trillions more in IOUs every year – each one with your name on it. You’re not even out in the real world yet, and you’re getting the bill for 50 cents of every dollar the feds spend – almost none of it earmarked for you. But that is the thing about the real world your teachers probably forgot to tell you about. It is more unreal and fantastical than anything you studied. Here’s what’s real: You’ve been dealt a bad hand. From the bottom of the deck…your parents have slipped you some nasty cards. Our advice? Fold ‘em. Get up from the table before they clean you out. Enjoy your weekend, Bill Bonner

Good Riddance GM

I don’t like to be openly lied to. And let’s face it that’s what happened. The government knew all along that GM was toast, but they lied to everyone pretending this joke of a company was actually repairable all just to give a big parting gift to the union workers…directly from our pockets. What in the world are we becoming in little ole United States of America? I sincerely hope this dog of a company is taken out to the woodshed and shot.

Oil Trend

Arianna Huffington: Obama Is Wrong About Wall St. and I’m No Lefty

Dialing It In

I like James Stewart. He has written some interesting books, but he is dialing it in here. An excerpt:

As the economy shows signs of improvement, I plan to gradually shift out of defensive positions like consumer staples and health care and into more growth-oriented positions. Meanwhile, I still have the cash position I raised by selling stocks in April. With benefit of hindsight, that sale was premature, a decision for which I nonetheless remain unapologetic. As I’ve said many times, no one can time the market perfectly. I’m in no rush to put that money back into stocks. Last week’s drop was a reminder that even bull markets suffer declines. Eventually there will be a 10% drop, which will be the trigger for me to put more money into stocks. No doubt by then, fear will again have made its presence felt.

Take that advice to the bank! Seriously, there is no system there. You might as well be rolling dice. Pretending there were discernable fundamentals in the last few months, fundamentals that could be pulled apart and used to a profit advantage, is not exactly believable.

Free Money!

This story is depressing. An excerpt:

“All I did was rent,” Gullett said. “To buy my own home, it’s wonderful. And I’ll have a back yard.” In Broward and Palm Beach counties, dozens of local governments have been awarded a total of $104 million to turn abandoned, foreclosed properties into occupied, tax-producing dwellings. Tamarac has $4.7 million to spend on down-payment assistance in some neighborhoods, such as Heathgate-Sunflower, Westwood, Mainlands, Vanguard Village and Concord Village. Gullett is a single mother of a 1-year-old daughter, Madison. With a salary “in the 20s” as a clerk for the state unemployment office, she meets the program’s income guidelines. The house in the Mainlands neighborhood will cost her $133,000. The city, through a grant, is chipping in $91,300.

I just puked in a bucket. What a system we got going.

The Definition of Wicked

Laying it out in brutal fashion.

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The Little Book of Trading

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Market Wizard Interviews


  • Jim Rogers with Michael Covel in Singapore.

  • Market Wizard Larry Hite discusses odds.

  • Harry Markowitz on Jim Cramer.

  • Trader Salem Abraham about the unexpected.

  • Michael Covel: Reason TV Interview.

  • Michael Covel in Brazil for BM&FBovespa.

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