“No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Listen to the rest:.
Of course, you can go back to trusting the system to take care of you cradle to grave…and die then too. Your choice.
Weight loss study participants who received financial incentives were more likely to stick with a weight loss program and lost more weight than study participants who received no incentives, according to Mayo Clinic research that will be presented Saturday, March 9 at the American College of Cardiology’s 62nd Annual Scientific Session.
Previous studies have shown that financial incentives help people lose weight, but this study examined a larger group of participants (100) over a longer period (one year), says lead author Steven Driver, M.D., an internal medicine resident at Mayo Clinic. One hundred healthy adult Mayo employees or their dependents, ages 18-63 with a body mass index of 30 to 39.9 kg/m2, were assigned to one of four weight loss groups: two with financial incentives and two without. An adult who has a body mass index – a calculation determined by using weight and height – of 30 or higher is considered obese, according the Centers for Disease Control and Prevention.
All participants were given a goal of losing 4 pounds per month up to a predetermined goal weight. Participants were weighed monthly for one year; previous financial incentive studies followed patients for 12 and 36 weeks. Participants in the incentive groups who met their goals received $20 per month, while those who failed to meet their targets paid $20 each month into a bonus pool. Participants in both incentive groups who completed the study were eligible to win the pool by lottery.
Study completion rates for the incentive groups were significant compared with the non-incentive groups: 62 percent versus 26 percent. In the incentive groups, participants’ mean weight loss was 9.08 pounds, compared with 2.34 pounds for the non-incentive groups.
“The take-home message is that sustained weight loss can be achieved by financial incentives,” Dr. Driver says. “The financial incentives can improve results, and improve compliance and adherence.” Researchers found that even participants in the incentive group who paid penalties were more likely to continue their participation in the study than those in the non-incentive groups, Dr. Driver says.
Senior study author Donald Hensrud, M.D., preventive medicine expert at Mayo Clinic and medical editor of The Mayo Clinic Diet, says obesity continues to be a major concern in the United States because extra weight contributes to many conditions, such as heart disease and diabetes.
“Traditional therapies are not working for a lot of people, so people are looking for creative ways to help people lose weight and keep it off,” Dr. Hensrud says. “The results of this study show the potential of financial incentives.”
This would be a great idea to apply to investing and just about every other place where people fall down and fail. How? Cut their taxes if they hit benchmarks. Straightforward.
I am asked often if trend following would still work if everybody knew about it. The short answer is no. There is much more to trend following trading than simply following rules. There is the psychological aspect, the reason that Nobel prizes were given out for behavioral finance, that sets apart the winners and losers in this unique strategy. Consider this excerpt from an interview with Richard Dennis the famed teacher of the Turtles:
Q: Didn’t you have any reluctance about giving away trade secrets?
A: Sure, but I don’t think trading strategies are as vulnerable to not working if people know about them as most traders believe. If what you are doing is right, it will work even if people have a general idea about it. I always say that you could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline. Almost anybody can make up a list of rules that are 80 percent as good as what we taught our people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.
So many people imagine there are secrets and if they can only find them they will be set. The reality? It’s all about the right training (and systems). I just finished 23 presentations in Tokyo, Hong Kong, Singapore and Kuala Lumpur. People want to learn, but even experienced fund managers are often either unaware of trend following or confuse it. Anyone can be a trend follower, and excel, but it takes the right training to get there.
Ken Robinson outlines how school systems appear to universally idealize mathematics while shying away from the arts, leaving those who are more creative to flounder. An interesting perspective to consider:
You need the math, but you need the creativity too if you want the big life success.
Wouldn’t it be great to be gifted? In fact…It turns out that choices lead to habits. Habits become talents. Talents are labeled gifts. You’re not born this way, you get this way.
Start. Find an edge somewhere (anywhere) and start.
Do you really want to be in a box with millions of traders and investors with the same training, technique and style (i.e. fundamentals, forecasts, buy and hold, talking heads, etc.)? Richard Dennis danced to a different beat and his creation of the Turtles landed him in the hall of fame. Dennis relayed one of his quirks that helped set him apart:
“I used to go to bed with a book of charts,and just flip through them before I went to sleep. I wasn’t trying to analyze or interpret them, just retain them so that my mind could work on them while I slept.”
Who knows if this exercise worked? What matters is that he was so fired up about being great and forever improving, that he was OK with experimenting and trying out new new things. What will you do differently today? Ludwig von Mises nailed it:
“The class of those who have the ability to think their own thoughts is separated by an unbridgeable gulf from the class of those who cannot.”
Just listened to your podcast on the universal kick-in-the-ass known as the death of the McJob. I couldn’t agree more. What people do not realize, however, is that through osmosis we pass our attitudes on to our children. If we are afraid to get out from under the weight of societal expectation to be another drone zombie with the rest of them, what message does that give to our children? A child looks up to its parents for guidance and reassurance. We see it during, say, a thunder storm, where our children are nervous and instinctively glance over at us to see if WE are afraid. Well what if we are and we show it? What do we communicate to our children if we show our fear? The obvious answer is that they then become afraid because they rely on the parent to show them the things they should be afraid of.
So when a parent does not follow your message, does not get out there and make something happen, and instead retreats into the illusory safety of corporate zombi-ism, they have let down their child in a way that goes far beyond not giving them the latest toy or a ride to the mall. They have basically told them that there is safety to be had by huddling in a collapsing building. So if people won’t take your words to heart for themselves, then they should at least do it for their children.
By the way, Mike, I’m writing this from my hotel room overlooking The Bund in Shanghai. I’m here visiting my daughter who graduated last year as a top-notch high school student and winner of a couple significant citizenship awards. She has read all your books and has the Trend Following mentality. Last summer she made the decision to head to China to learn Mandarin and to see more of the world before going to university. And in case everyone thinks that what you’re saying is all about money, she is volunteering for a charity that helps Chinese kids make a difference in their world because she herself wants to make a difference. Because of her can-do attitude, the money is already there; it’s a given, because once you are there mentally, the results are inevitable. She has had no trouble accumulating the money she needs to achieve her goals, but she’s taking this year to go beyond the money, and as you probably guessed, I couldn’t be more proud of her. She not only thinks it, she does it.
Thanks Michael, keep up the message!
Dale
Thanks Dale. I couldn’t have said it better myself.
If you want to live a life of complacency, a life that is run by what the masses are telling you to do, then that is your choice. Just know that your children will be subject to the same kind of ruling over their lives. Don’t lead them to believe that “there is safety to be had by huddling in a collapsing building”.
We are on such information overload, and plugged into the system that even our unconscious wont let us have our sleep to ourselves. An excerpt from CBS:
“The phone will beep, they’ll answer the text,” Dowdell says. “They’ll either respond in words or gibberish. (It) can even be inappropriate. Ex-girlfriends contacting ex-boyfriends, saying ‘I miss you. I want to see you.’ The thing that happens, though, is that when they wake up, there’s no memory.”
Minimal time spent on the computer or checking your iPhone is what trend following prides itself on. Dig deeper and explore.
…not having a lot of money is just an excuse people give when they feel frustrated, or not at the right place they feel they should be in their lives, or stuck somehow (“if only I had a lot of money, I could do this great idea I have”). Giving someone a lot of money will only remove that one excuse they had. Then they will find other excuses for the reasons they are unhappy.
Go out and make something happen. Plenty of people have gone out before you and done it. Not enough money? Not enough time? Not smart enough? Those are all the reasons why only a few are rich. Most people can’t muster up the motivation needed to get passed those mind blocks. Here are some ideas:
Not enough money? Start small with your idea and build it up, get a business loan, get a second job (for a bit), improvise, ask your friends for help…
Not enough time? Stop watching TV, wake up an hour earlier, stay up an hour later, get off facebook, take the train to work and use commute time…
Not smart enough? Read a book, read a book, read a book, take a class, pick your friends brains…
Start taking the time that you complain about your life and “why you can’t make something happen” and get over it. Succeed or fail, you will be more proud of yourself and more motivated to take the leap again.
That’s also an attitude any good trader needs too.
Nearly every New Years Eve and Fourth of July, you’ll read news stories about boats that capsized, often with terrible consequences. Why? Everyone was so eager to watch the fireworks that they all piled along one side of the boat. At that point, even a modest shock, like the wake of another passing ship, became enough to flip the boat over. It’s a predictable phenomenon, but tragically, people don’t seem to learn from it.
He adds getting market specific:
As a sign of how warped this celebration has become, Gordon Chang appeared on CNBC on Friday, noting the troubling difference between exports reported by China to other countries and imports reported by other countries from China, as well as the inconsistency between low cargo numbers and high reported export numbers. In response, the CNBC anchor said – and I am not making this up – “You know Gordon, I agree with you, but let me take a different tack on this, alright? Let’s say you believe that China is making up the numbers. But if the stock market there keeps going up because of it, and you believe the government will keep priming the numbers, isn’t that sort of a reason to bet on the Chinese stock market?” That question is like encouraging people to invest with Bernie Madoff because he keeps “putting up the numbers.” The troubling similarity between the late-1990’s bubble, the housing bubble, and the present central-bank induced advance is that the speculative nature of each was largely recognized, but people took the same attitude: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance – We’re still dancing.” Those were the famous last words of Citigroup’s former CEO Chuck Prince at the mid-2007 peak, just before the financial markets began to implode.
For every ten traders that try their luck at day trading nine of them will go broke. It is just the way the game works. Famed trader Richard Dennis had this to say about day trading:
If I’m buying and selling in the same day, it’s always to take a loss. I haven’t made a profit on a day-trade in five years.
Having a plan and sticking with it is also something Dennis stood by:
“When you have a position, you put it on for a reason, and you’ve got to keep it until the reason no longer exists. Don’t take profits just for the sake of taking profits. You have to have a strategy to trade, know how it works and follow through on it.”
Without a solid plan, and the nerves to stick with it, the markets will exploit you, take advantage of you, and then in a sad quiet fashion…. leave you for broke on the side of the road.
How to Create Habit Investments: It’s a fairly simple process that you can repeat with various types of habit investments:
• Pick something desirable. If you repeatedly do this activity, what will it grow into? Is that what you want?
• Do just a minute or two of it. You can’t build it all up in the next few days. That’s a good recipe for failure. Just do 1-2 minutes of it today. Smile as you do it.
• Set a daily reminder. Let’s say you want to do it every day at about 6:30 a.m. Set a reminder for that time, and make it a priority to do it each day, just for a minute or two.
• Watch it grow. If you just do it repeatedly, it will grow. Don’t force it. Keep the repeated activity as small as possible for as long as you can if you want it to grow (it sounds paradoxical, but it works).
Synopsis: For the past couple of years many of us have been in love with Apple. Their products, their style, and their stock. It was a great story as long as the stock was going straight up. On today’s podcast Michael Covel talks about all things Apple: the worship; the seemingly romantic love of Apple stock; and the drop down to $450 a share from its peak above $702.10 in September (down 35% from its peak). Covel compares the fundamental viewpoint looking at Apple today to the trend following perspective that is purely based on price action. The Wall Street analysts all seem to insist that they can predict the future, but none of them predicted this. So, what does this mean? Is Apple a “broken company”? Apple had a profit of 13 billion dollars, sold 28% more iPhones and 48% more iPads, and the stock still went down. Covel looks at several articles from Wall Street analysts and notes that none of these people were saying what they’re saying now when the stock was at 700 a share. Covel creatively points out the complete drivel coming from these analysts, and notes how nothing has changed on Apple’s end but the price of their stock. So why is this only being pointed out now? And what is Covel’s ultimate point? Follow the price action. Trend followers don’t have to know anything about what’s going on inside the back room of an Apple store. This is a classic example of a trend: ride the train up, ride the train down. Is the stock cheap now? What if it’s at 350 or 250 next month? Do you buy on the dip? If the market is going down, get out or short it. The price knows more than any Wall Street analyst. There is no way on the planet to attach all fundamental views to the movement of the stock price. If the best traders on the planet don’t have these insights, how can the stock jockeys at CNBC and Bloomberg, for example, have them? Free DVD: www.trendfollowing.com/win.
