I love controversy. It works for me. My bluntness though can bring the nuts out of the woodwork (an example at Amazon today) and the nuts seem to have a common refrain: “Your book is a waste of trees and you sell trading courses!” Followed by the always implied “Covel is the devil” outbursts. But as that ‘review’ at Amazon shows — the angry critics never get into the ring with me on content — just ad hominem attacks. You would think by now that they would change their approach — nope.

Where am I going? Well, after seeing that review I had a scheduled lunch with a late twenty-something fund manager. He runs a trend following fund that is closing in on $10 million dollars under management. Considering he started three years ago with less than $60,000 — that’s a pretty impressive trend following start.

Where did our conversation go over two hours? All over! However, we ultimately talked about his ’start’. Him and his partner first read ‘Market Wizards’ years back, but he said that it was my book ‘Trend Following’ that really provided the inspiration. He said ‘Trend Following’ was the book that laid the foundation for their success up to this day. That’s a good feeling. It’s nice to know that my writing labor over the years continues to have such rewarding results.

“Covel’s books kill trees! Stop him! He is a capitalist!”

Recently I have debated how to allow more collaboration on my sites. Some feedback in from a long time reader:

“Mike, you’ve created a very, very strong presence and are a thought leader…I’ve attracted some large investors from actively participating on some private message boards, so I am fully aware of the potential. And, at some point you’re going to want to take what you’ve developed to the next level. That could mean a lot of different things. Offering a sponsorship may be the safest way initially (as opposed to becoming a consultant/rep/solicitor). Here is a unrelated example. In addition to business owners and executives, many of my investors are specialized physicians. For a few years xxx Capital was a “TMA corporate partner”. The TMA is the Tennessee Medical Association with 10,000 member physicians in TN. Take a look at these links to understand how they did it. I did the Elite Package which allowed me to pen 6 articles in their monthly publication, a full page ad in the same every month, we attended their annual meeting (with a booth, etc), links and logo on their website, did some conference calls, etc. The large funds that you’ve included on your site an in your books have no doubt already benefited immensely from your efforts (and you have benefited from their giving you access). It’s probably some of the lesser known and possibly even better shops that need the help in…gaining more exposure. I will suggest the next Soros probably looks a lot like what I sent you last night! And, of course, you’ll need to check them out diligently using the regulatory websites. Some people can appear one way, but when you check them out with regulators they’ve bounced around a lot and are actually salesmen, not money managers.”
Mike S.
Chief Investment Officer
Portfolio Manager xxx Capital Management LLC

Thanks Mike for the insights. We are definitely considering other options where we can add value beyond courses, books and my film. For example:

1. My firm will definitely offer space for third party sponsors shortly. This will include, after first vetting the ‘right’ partners, fixed promotional space on our sites and the ability to submit articles and or research. This can also include the ability to place third party “offers” on our sites.

2. We will soon launch in-person seminar events. What will be covered? Trader training in trend following will be a core seminar direction, but we will also be assisting other businesses to understand our proprietary marketing, branding and business practices. Fifteen years into this I have learned a few things about online entrepreneurship that have nothing to do with trend following!

3. A boot camp for learning how to gain access to top pros. There is a method to my madness so to speak, and sharing those “get in the door” techniques will help thousands. Readers and clients have been asking about this for years.

Feedback in:

“I am a former stockbroker and economics graduate who had his initial financial education forged in the fires of major institutional academia. And that wrought-iron mutual-fund-based financial steel was reinforced during my time at Edward Jones Investments, a conservative buy-and-hold financial firm. Well, the classic saying in economics is “there’s no such thing as a free lunch.” But my personal belief, however, is that there’s no such thing as economics — if you want to learn economics, learn psychology. Understanding motivations is more important to understanding economic decisions that learning some stodgy abstract theory from a university professor who has the uncanny ability to postulate far and wide on situations after-the-fact, claiming keen insights and deep understanding about why something happened yesterday. Ask him what will happen tomorrow and you’ll get an answer that’s about as useful as if you’d asked your pet labrador. The point is: economics, and more specifically, economic prediction, is futile. And my personal experience selling bond mutual funds to old ladies was a process in supreme frustration (…no, the value of the bond can change but the interest payment you receive will always be the same… see?  no? … [sigh]…). So armed with these thoughts and feelings I set out on my quest to ally myself with real information that I can use to make some real money… And luckily, Michael Covel’s ‘Trend Following’ was the fourth financial book I read. Let’s put aside for the moment the fact that it contains several real world examples of real traders making real money from real decisions based on the concepts shared in the book — it was the first book I read where the fundamental (I use this word carefully) underlying assumptions behind the concepts made intuitive sense, were useful, and could be applied by anyone in a real way in the real world. The simplest solutions are usually the best solutions, and Michael has done an excellent job in ‘Trend Following‘ of cutting away the extraneous clutter of useless financial information and getting to the point of what types of information it makes sense to pay attention to and why… and how you can make money. It was an Ah-Ha moment for me…I have also read ‘The Complete TurtleTrader‘ and watched Broke, and have read through Michael’s websites. There is enough information on these to go out an start making money tomorrow. That is not a promise or an endorsement of divine riches to all who read Michael’s work. We all know that only a small percentage of the population actually act upon the knowledge they receive, even if it is to their benefit. But if it is relevant information that you seek, then in Michael’s work it relevant information that you will find. Lunch anyone?”
Robert Kramer
Riverview (Tampa), FL

Thanks!

Feedback in:

“Hi, I’ve now read Michael Covel’s “The Complete TurtleTrader” and “Trend Following”. I have a question about the Trend Following Trading Systems that he sells through TurtleTrader.com. In Trend Following, Michael goes to great lengths to discuss the fundamental theory of Systematic Trading but what he doesn’t do is provide specific systems that can be followed or have been used in the past. I understand that this could not be put in a book that sells for less than $100, and get why he wouldn’t do that. My question is, in the Systematic Trend Following System courses, is this type of training provided. I am fully prepared to test my own systems using [software], but are there specific systems taught in the courses that would essentially give me a head start? I am looking for a course (or mentor) that would be able to provide samples of indicators for entry & exits, how someone would backtest these systems and develop new systems…essentially how to establish & operationalize a systematic trading program. Is this provided in the courses or is it simply just the theory? I am a professional energy trader that trades electricity in the Northeast Power markets of Canada & US, so I have experience trading for 6+ years but not as a systematic style trader.”
Thank you,
Wes J.

We provide all the rules you will need + personal support to answer your particular questions. Beyond a shadow of a doubt there are specific systems! We provide clients a condensed opportunity to learn everything we have assembled research wise over the last 15 years. We provide complete systems of entry/exit and money management. You will be covered from start to finish. Wes, in conclusion, we can help. And our unique personalized support will make sure your unique situation is addressed. He followed up:

“Michael, Would you recommend I get set up with [software] first before investing in one of your courses.? Or could I start with one of your courses, and then invest in [software] over the next few months. As well, should I get set up with a Futures account at a brokerage firm first? Or could I also do this at a later date? I’m just not sure of the staging of how this whole thing should go together.”
Best regards,
Wes

We recommend our systems trading course first. You can’t jump into software before the systems, philosophy and basics of what we teach are down tight. Even more so with a brokerage firm. That definitely does not come before our course or software, plus the brokerage decision/implementation takes little time. You can, however, do software at same time as our trading systems course.

Feedback in:

Michael, Can you recommend some simple, basic books that I can read to learn more about options, selling short and futures markets?
Thanks,
David Tigrett

Three books:

Option Volatility & Pricing: Advanced Trading Strategies and Techniques

The Futures Game: Who Wins, Who Loses, & Why

Trading and Exchanges: Market Microstructure for Practitioners

More resources here. Also in:

Dear Mr. Covel, Thank you for all the work you have done on trend following. It has changed my life and my career. As a 28 year veteran of the mainstream financial services industry, I have watched it devolve into nothing but a distribution network for the mutual fund industry. I have recommended your book to many of my clients and associates. I am amazed how many of my colleagues fail to embrace it. I have been using Metastock with great success in developing and executing a trend following system for my clients over the last two years. It helped me avoid most of the 2008 crash and it has us on the sidelines in the current sell-off. Attached is a marketing piece I developed for my trend following strategy with the help of Metastock using a trend following system.
Curtis Purington
St. Paul, MN

Thanks Curtis! Also in:

Michael, I’ve read both of your book numerous times in the last few years. I watched the movie “Broke”, and should be sending you a pic in front of my university soon. I finally took the next step, got some software, which included [trend] system[s]. I started tweaking it and backtesting it. I couldn’t believe the return I would have made in the last four years. We’re talking close to 700%! I opened a broker account, and I’m starting to trade a paper account for a few months before I use my own money. I just wanted to say thank you so much for all the info, and more importantly, the hope you have given us to capitalize on the regardless of who you are.
Vahe Michael Tascian

Thanks! Also in:

You must watch both of these videos. The topic is one of the most important in our history. It is about the debt bomb:

http://www.piie.com/events/event_detail.cfm?EventID=152&Media

Thanks. Sobering.

Trend following legend Bill Dunn is profiled in my book Trend Following. He also happens to be on the mind of a reader who writes tonight:

You are an excellent writer. To make a subject like trend following an engaging read is no easy task. You do not talk about your personal experience, but the book is not about you. It is about trend following. Whatever your own personal experience is inconsequential because the facts you present speak for themselves. However, I feel sure you wouldn’t be excited about writing about a subject which you have a distaste for. I read your book and have some questions about your course. How much will I have to spend on software? I know you don’t sell it yourself. If Mr. Dunn has 13 full time staff to do research, some who have advanced degrees in math, how could poor little old me, who has a BA in management from 1975 and no full time staff have half a chance in succeeding? I am getting ‘The Complete TurtleTrader’ to read also. If it’s half as good a read as ‘Trend Following’, I will enjoy greatly. I had the idea before I got to it in your book, why go to all the trouble, when I can take my money to Mr. Dunn or one of the other gentlemen you mentioned and get a very good return. I had great expectations until I read your book. The money I stand to inherit could be considerably less or non existent by the time my dad dies. My dad’s money is with a bank trust department, which at one time I believed were conservative. However, the trust officers might not even know what trend following is, let alone implement it. Although in reality, based on my new found knowledge of trend following, trend following would be, in the long run, overall much safer, then any other system that my father’s bank trust department might use. So I can safely say that bank trust departments are not truly conservative. Because the paths they take with their client’s money are not safe at all in the long run.
Charlie M.
Florida

First, Dunn did not start with all that. He started as a ‘one man army’ in Northern Virginia working out of a 1970s typical suburban home. No doubt he is a very bright man, but he did not have a team behind him when he started.

Second, my second book ‘The Complete TurtleTrader’ is the true story of trading neophytes who learned to become trend following millionaires. The story goes right to your skepticism. Does that mean I am guaranteeing that you will be the next superstar? No. However, my second book does put you in the position to actually have a chance to be a winner. It gives everyone the confidence to say, “That can be me!”

Third, software is an automation tool. It doesn’t think for you. For software to do its job it must have the right ‘rules’ put into it. What are the options? There are many and we help clients with the choices ranging from EXCEL to specialized third party applications.

Feedback in:

Michael, I will keep this short. I am sure you get 1000 email a day. I have given trading an honest effort. For the past 10 years I have had an interest and dabbled until 6 years ago I took several seminars from top trading system gurus and blew out a couple accounts…. got even more serious and read 36 books in 2 years trying to find the answer! I will say ‘Trend following’ was one of the books that made the chart. After another attempt at trading, I took a 2 year break. Now here I am and after disconnecting from all the views swaying me left and right with all the contrary systems, I feel strong that following the trend is the answer. I would like your list of books NOT to read because, other than your ‘Trend Following’, none of the books I read are on your list. I would love to know that I was reading the wrong crap! I would like more info. on your teaching and courses, however I am a little concerned about the selling on your website. You know what they all say: “you either do it or sell HOW to do it….” Basically I am usually turned off by the hype. If it is so good why not just make money doing it and not selling it, right? Help me help me.
Thanks,
Rob H.

First, from this list here are books not worth reading: Peter Lynch books, Cramer books, the ‘Dummies’ books, Siegel books and ‘anything’ that predicts anything. These authors are surely not bad people personally. but there is just not much reason to try and do what they say to do.

Second, what more info. would you like on our training? How can I help? In terms of selling information (and teaching) by your logic why does Harvard exist? What does any teaching exist? Why does anyone write a book on anything? I have been around for too long helping too many for this to be a legitimate concern. My firm simply helps people get there faster than on their own and being capitalists we ask for compensation for that help. And yes, I trade my own account.

Feedback in tonight:

Hey Mike, I know your a busy guy, but I think your a great guy to ask this question to! I’ll try and be brief. Background: I’m 26 years old, 1st Class Economics graduate. Since the age of 14 I have always been entrepreneurial, wheeling and dealing etc. I’ve dabbled in trading, import/export etc. Recently, I’ve been going more towards professional gambling and trading. It’s tough starting out, I don’t work (never had a real job) and hard to build up from scratch. I have been offered a job with N.C.R (ATM people) and the money is quite good, it’s a graduate sales position. However, I think I would be selling out getting a job. Deep down I know I don’t want to do it long term etc, I have zero part of me that wants to work in an office or even work for someone else for a long period of time. My question to you is, if you were giving advice, would you say “do the job, try save some of the money, and then use this for your other money making ventures.” Or “fuck the job, it will grind your entrepreneurial spirit out of you, you will end up there for years, and live to regret it.” I’ve watched your movie broke etc, guys like Larry Hite are my hero, and I see so many similarities between myself and guys like that, characteristics, backgrounds etc. Anyway any thoughts? Much appreciated when you have the time.
Cheers,
Barry from Scotland

There are no short answers (or cuts), but I have some views:

1. Read Trend Following.
2. Read The Complete TurtleTrader.
3. Watch my film Broke (I know you have, but everyone is seeing this answer).
4. Read my other recommended books here. Don’t underestimate what I have on that list. Those books changed my life.
5. Watch The Godfather.
6. Watch The Godfather II.
7. Watch No Country for Old Men.
8. Watch Patton.
9. Watch V.
10. Sit down with me for a few days of consulting and I can map out for anyone a successful way to approach taking on life. There is a formula.

That’s 15 years of ‘the school of hard knocks’ in 10 easy steps.