Michael Covel’s Official Site

People are seduced by the bling and dazzle of pro athletes. I bet the average guy thinks pro athletes are swimming in cash set for life (some think that about all original Turtle traders, but clearly that is not true either!). Not so fast. Consider this excerpt from a recent ESPN article:

Filing for bankruptcy is a long-standing tradition for NBA players, 60% of whom, according to the Toronto Star, are broke five years after they retire. The other 40% deliver the Toronto Star.

Can you believe that? Guys who are paid monster sums of money go broke shortly after their careers end. In a round about way it’s why I always find the “starting capital” question (”How much do I need to start trading mister?”) so silly. Ed Seykota’s answer to that question is still the best. Seykota answers the starting question by asking, “how much money would you need to stop trading?”

It’s never really about how much you have, but rather it is about what you do with the limited capital you do have (and, yes, we all have limited capital).

For all of those complainers out there screaming about “bad” speculators, look in the mirror!

I don’t care whether it is monster optimism on the upside or over the top “the world is going to end (PDF)” pessimism on the downside, none of it helps you to know when to buy and sell precisely.

Pumping gas these days is one helluva market experience isn’t? It is almost like a trading floor: constantly shifting prices among buyers and sellers except when it comes to gas for most people it is a commodity they need to use to get by in their daily lives, not some market that they think they can profit from. And that is the problem. It is one of the issues I am tackling in the documentary film I am producing: the how and why so many individuals have come to see “stocks” as their only investment option to the exclusion of even considering oil, gas, gold, currencies, hedge funds and or managed futures (as but a handful of examples). As Jim Morrison sang all those years ago…people are strange.

This is a great piece of reporting from the Washington Post about the current real estate bubble meltdown.

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

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!

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.