For the rest of this month I am offering a special with my $1897 trading course. It includes the new Hite and Failkner DVDs at no extra cost. That changes come January!

From Yahoo today:

Investors had hoped that FedEx’ raising of its guidance in early December for its fiscal second quarter meant a more thoroughgoing economic recovery than the company described in its results on Thursday, said Edward Jones analyst Dan Ortwerth. “The market had decided this meant the economy was going gangbusters. Then out comes the details. The economy is improving but it’s still on shaky ground. So the stock is back to where it was before the pre-announcement,” Ortwerth said. “It’s almost comical. The price goes up, the price goes down.”

Dan, my friend, since when did volatility become abnormal? That little paragraph is such a great microcosm of the insanity of trying to use news and fundamentals to guess market direction.

An excerpt from Forbes circa 1982:

The fundamentalists — a decided majority among successful investors — look on chartism somewhat the way physicists look on parapsychology. They are probably correct to regard them so, but there is no rule that does not have an exception. Dick Donchian seems to be that exception. Donchian differs from many a chart watcher: He doesn’t predict price movements, he just follows them. His explanation for his success is simple and as old as the Dow Theory itself: “Trends persist.” He will buy a hog or Treasury bond future after an upswing is under way, and sell it only after the price has begun to tumble. He misses some of the profit, but that’s part of the discipline of his style of investing. “A lot of people say things like: ‘Gold has got to come down. It went up too fast.’ That’s why 85% of commodities investors lose money,” he says. Donchian gained that wisdom the hard way. His Futures Inc., the first publicly offered commodities fund, came out in 1948 at $10 a share. It was before its time — or Donchian’s. “When I started trading I was bearish,” he recalls. “Cocoa seemed too high. So we took a short position at 30 cents, and it went down to 19. We made a lot of money at first; that was the worst thing that could happen. I looked around for another commodity that was overvalued. Coffee was making a new high of 20 cents, so we took a short position, and it went up to $1. I made a rule never to be a price trader. There’s no such thing as too high a price or too low a price.” Futures Inc. went as low as 4 cents a share before finally being dissolved…The essence of trend-following, however, is always this: Buy on a rising price and sell on a falling price. That sounds like buying dear and selling cheap, but it works, if prices move not in random walks but in long strides.

While the article might be a few years old, it’s very relevant going forward.

My book “Trend Following” will be published in Portuguese now. To all my new friends down in Brazil at BMF&BOVESPA thanks for pushing the issue after my summer visit! Obrigado!

That’s now 10 foreign translations:

Arabic
Chinese-Simplified
Chinese-Traditional
French
German
Japanese
Korean
Portuguese
Russian
Turkish

An excerpt from James Montier:

If you are after specific investment advice, stop reading now. We seek to explore one of Adam Smith’s obsessions: what it means to be happy. We also discuss why that’s important to investors, and how we can seek to improve our own levels of happiness. The list below shows our top ten suggestions for improving happiness.

• Don’t equate happiness with money. People adapt to income shifts relatively quickly, the long lasting benefits are essentially zero.
• Exercise regularly. Taking regular exercise generates further energy, and stimulates the mind and the body.
• Have sex (preferably with someone you love). Sex is consistently rated as amongst the highest generators of happiness. So what are you waiting for?
• Devote time and effort to close relationships. Close relationships require work and effort, but pay vast rewards in terms of happiness.
• Pause for reflection, meditate on the good things in life. Simple reflection on the good aspects of life helps prevent hedonic adaptation.
• Seek work that engages your skills, look to enjoy your job. It makes sense to do something you enjoy. This in turn is likely to allow you to flourish at your job, creating a pleasant feedback loop.
• Give your body the sleep it needs.
• Don’t pursue happiness for its own sake, enjoy the moment. Faulty perceptions of what makes you happy, may lead to the wrong pursuits. Additionally, activities may become a means to an end, rather than something to be enjoyed, defeating the purpose in the first place.
• Take control of your life, set yourself achievable goals.
• Remember to follow all the rules.

Here is a recent interchange I had with a new friend on my Facebook:

Ken:

I’ve actually been “following” you for a while on your email list and websites.

Me:

That’s kind of how it goes…see if the crazy trend following guy [me] is actually useful then maybe stick around!

Ken:

I was just talking with a hedge fund guy who recommended you.

Me:

That’s nice. Always good to hear.

Ken:

I don’t want to take up your time, I know you’re busy and you aren’t in the free advice business, but I’m looking to either go to business school or trading of some kind. I don’t have a lot of capital right now. What do you suggest a young 26 year old guy like me does? It’s brutal out there.

Me:

My books [Trend Following and The Complete TurtleTrader], if you have not seen, are a good start. Lot’s of stuff there very relevant to your situation. Business school? I started an MBA at 25. Would never do again today. Waste of time IMHO.

Ken:

I know I read that comment on your twitter, but starting a business or getting into trading with little capital isn’t so easy.

Me:

But business school just delays the inevitable struggle. If you really want to do it, you will do it. If you don’t want to do it, you won’t (or you will delay). Life is easy. We [humans] make it hard! That’s all the free advice for the night!

Ken:

At the very least maybe getting a business degree would secure a job at a investment firm and lead to eventually starting your own investment firm or business. No easy choices. But thanks Mike. I appreciate it! I will keep following you.

Me:

I would argue that your logic is right for some people, but mostly wrong for most people.

Ken:

Take care. I’ll contact you again when I’m rich!

Me:

Hey, you never know, insights from this end might help you get to the rich thing.

Ken:

What would the price of an hour of brutal real world advice for a struggling 26 year old guy like me for financial and career advice cost? I’m ready, I just need to know the right actions to take and not waste time.

Me:

I am going to post some stuff on consulting soon, but an hour would not be enough for me to feel like I helped or [enough time] for you to absorb [it all].

Martin writes:

I read about Salem Abraham in Michael Covel’s The Complete TurtleTrader and Trend Following books. Abraham’s story is unique and his credentials, especially his trading performance, are impeccable. So when I heard about the Market Wizard Mentoring DVD featuring this second generation “Turtle,” I couldn’t wait to see it. After seeing the DVD, I highly recommend it. It’s a tremendous experience to watch a casual 1.5 hour conversation as Michael Covel picks Salem Abraham’s brain. Abraham tells the story of how he got started and of his influences growing up. He shares the major lessons he learned along the way and offers his advice. He teaches about probability and risk. I was blown away! I was getting a lesson in probability from one of the top traders in the world! I think the best part of watching this DVD is not just the content but the nuances you get when you “read between the lines”: the way he thinks; his confidence and mindset towards trading. I had some high expectations and this DVD definitely delivers!

Bill writes:

My two cents on your next project: Make another film. Don’t get me wrong, your books are great. However, you are a great storyteller, and your no-bullshit attitude is a huge part of your appeal. It comes through much stronger on the camera as opposed to the printed page. Maybe do both a film and book and spin a book out of it? Enjoyed the NYIF webinar even without the video. Keep up the great work.

Joaquin writes:

I consider “Broke” to be one of the most brutally honest and accurate assessments of the financial services industry, media, crowd psychology, and investing/trading knowledge ever produced. As a risk professional with long-held similar views, I can’t begin tell you how much a voice like yours is needed to offset the traditional flawed investment paradigm that is spoon fed to the general public as wisdom. I have posted your Youtube preview on my website and am recommending your film and services to all of my clients, neighbors, and friends. Awesome job Mr. Covel! Keep speaking truth to power, you are doing an immeasurable public service by doing so.

Martin writes:

Although I had never heard of Kevin Bruce prior to watching Michael Covel’s movie, “Broke: the New American Dream”, the fact that he had earned over $100M caught my attention. The Kevin Bruce DVD offers a closer look at this extraordinary trader. A truly unique aspect of Bruce’s story is that he taught himself to trade and developed his own style of trading without the help of any real trading mentor. He researched his own methodology to identify trends while working at a gas station! His research gave him such conviction that his trading methodology would work. It’s clear that this confidence and conviction was a main component of his success. As he tells his story, analyzing his journey step by step, he offers little pearls of trading wisdom that you almost miss the first time watching the DVD. Clearly, this is one of those DVDs that you need to watch several times (while taking notes) to get the full benefit. It’s also extremely motivating to see someone, who started from scratch yet with the correct approach, reach such lofty heights of trading success.

Thanks!

A sad commentary on the times. Unfortunately for the ‘proletariat’ they don’t understand that asking for the so-called rich to be soaked will in the long run only see their lot in life continue to worsen.

When did laying asphalt sneak into the public consciousness as a noble endeavor? Why have colleges and higher education if digging ditches and pouring concrete are the new coveted jobs? I am not making fun of those jobs either. I am making fun of America’s pitiful desperation so expertly catered to on a near daily basis by politicians whose only goal is to be elected.

An excerpt from Bloomberg:

Economic growth is the best source of job growth. If growth is curtailed by soaring government debt, job creation will be sub-par as well. The government can’t keep shoveling out money to ‘create jobs,’ concoct some fictitious number of jobs that were created or saved and expect the public to buy it. Like the $787 billion stimulus, spending money to save money is not a winning strategy.

True that.

This article is why I am in the business of educating traders. An excerpt:

Employers and career experts see a growing problem in American society – an abundance of college graduates, many burdened with tuition-loan debt, heading into the work world with a degree that doesn’t mean much anymore. The problem isn’t just a soft job market – it’s an oversupply of graduates. In 1973, a bachelor’s degree was more of a rarity, since just 47% of high school graduates went on to college. By October 2008, that number had risen to nearly 70%. For many Americans today, a trip through college is considered as much of a birthright as a driver’s license.

Nothing in college is unique. It’s the same stuff taught by the same professors year after year. It’s recycled waste. Some students, aware of the ripoff that they are paying for, make it here. And for that select group I guarantee that they will actually learn something that can be used to make money.