Michael Covel: News & Info.

These are some thoughts about my new film coming out:

A new YouTube clip I just posted.

I am preparing an in-person trader training program. This would be on top and beyond the course materials, lessons, and books I have shared over the years. The program will incorporate unique trading research and ideas that I have assembled over the last 4 years, audio interviews I have conducted with top traders since 2005 and full length video interviews conducted for my documentary film over the course of 2007 and 2008. Those who have an interest can contact me now to be kept informed of dates, times, and pricing. These trading events will initially only be in San Diego, CA.

Now that is spot on.

The author (old pro) of this, saw the comments for that post, and responded:

I really enjoyed some of the comments on my post. Some of the guys are right on. The manager I referred to is a very disciplined trend follower who has a rule based system he follows religiously. The losses took five weeks not two days. A large % of the losses were incurred via being short the financials which were in fact in clear and well defined downtrends prior to the so-called intervention. It is obvious from some of the comments that all contributors are not traders but rather observers and there is nothing wrong with that. But I will pass the comments along to my friend. He has averaged a net return of 24% per year the last five years following his rules.

From Gibbons Burke comes an oldie, but goodie about money management.

Kevin Bruce is one of the traders who appears in my documentary film. He is a great story.

In lieu of a film trailer (which is coming!) below are 100 screen shots from the documentary film that I just finished co-directing:

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Feedback from an old pro trader:

In 35 years I have never seen so much corruption in the former free markets. Never!!!!!! I had the ES nailed so at least I can eat a few more months. I have a friend running a $1 billion hedge fund that 5 weeks ago was plus 18% YTD. He is now running $600 Million and it’s not because of withdrawals. 41% drawdown! 5 weeks!

If people start to feel the game is rigged, why play? The consequences of these bailouts are not good and I am not just talking of the trader mentioned above. The issue is one of trust and trust is disappearing.

I included this 2004 “Economist” article excerpt in my November 2005 expanded edition of my first book “Trend Following”:

“The size of banks bets is rising rapidly the world over. This is because potential returns have fallen as fast as markets have risen, so banks have had to bet more in order to continue generating huge profits. The present situation is not dissimilar to the one that preceded the collapse of LTCM . . . banks are walking themselves to the edge of the cliff. This is because as all past financial crises have shown the risk-management models they use woefully underestimate the savage effects of big shocks, when everybody is trying to wriggle out of their positions at the same time . . . By regulatory fiat, when banks positions sour they must either stump up more capital or reduce their exposures. Invariably, when markets are panicking, they do the latter. Since everyone else is heading for the exits at the same time, these become more than a little crowded, moving prices against those trying to get out, and requiring still more unwinding of positions. It has happened many times before with more or less calamitous consequences . . . It could well happen again. There are any number of potential flash points: a rout in the dollar, say, or a huge spike in the oil price, or a big emerging market getting into trouble again. If it does happen, the chain reaction could be particularly devastating this time.”

Now that was a great prediction!