Ep. 200: Tom Basso Interview #3 with Michael Covel on Trend Following Radio

Synopsis: Michael Covel talks with Tom Basso, the trader most famously known as “Mr. Serenity” in Jack Schwager’s “New Market Wizards”. Basso, now retired, was a stock and commodities trader who was president and founder of Trendstat Capital Management. He is the author of two books, “Panic-Proof Investing” and “The Frustrated Investor”. Basso 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. This is Basso’s third podcast conversation, and Covel and Basso talk about location independence; making sure trading doesn’t take up your entire life; stoicism; trend following in the emotional arena; mental exercises; the psychology of trend following; the “observer self”; the mental aspects of success; the importance of being able to lose small amounts of money; why trend following does so well when the black swans hit; Basso’s daily routine and the importance of routine in daily life. Covel and Basso also go through listener questions such as whether Basso would make the same trading decisions that he did from the start; money management v. trading; tinkering with current systems; knowing when it’s a regular drawdown v. something really going the wrong way; and whether Basso is a one-system kind of guy v. multiple systems. Want a free trend following DVD? Go to www.trendfollowing.com/win.

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6 comments on “Ep. 200: Tom Basso Interview #3 with Michael Covel on Trend Following Radio
  1. Patrick says:

    Well done Mike. Another great interview with Basso. Loved his cool response re: whether a draw down is just the usual or the system is broken. Cool as.

  2. Robert Lynn says:

    It’s very frustrating that I can not download the Podcast directly from the website. Great interview with Tom Basso Mike.

  3. DGDye says:

    I absolutely agree with Tom’s reflection on how he would do things differently today. The financial industry is the most regulated industry in the world. As a result, all the “sheep” out there have zero chance of having their money managed by the best in the business because lawmakers have deemed such investments as risky based on generalizations and flawed analysis. Their “protection” of the masses has guarantees that these sheep will be herded into the mutual fund/big bank pens to get their usual sub-par returns with oversized fees.

    I originally dreamed of starting a hedge fund, but soon came to realize that — as Tom says — most of my time would be spent on non-trading activities. Consequently I trade only my own money. With the ability to focus and constantly improve, I have been fortunate enough to have results that beat anything I have seen, published or private.

    I have no desire to manage other people’s money. I went into trading for freedom — Why would I give that up to answer to a bunch of suited, moronic institutionals who don’t understand simple concepts like volatility, real returns, and the essentials of risk management?


  4. DGDye says:

    BTW, Michael,

    I should mention that my returns became exceptional only AFTER I read Trendfollowing. Until then I was doing the usual research, following analysts, etc. TF taught me about the world of algorithmic trading and I haven’t looked back since.


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