Michael Covel's Trend Following

Latest Episodes:

Ep. 290: Mark Rzepczynski Interview with Michael Covel on Trend Following Radio Nov 07, 2014

Show notes

My guest today is Mark Rzepczynski, a Founder and Chief Investment Officer at AMPHI Capital Management. Prior to co-founding AMPHI Capital Management, he was the CEO of the Fund Group at FourWinds Capital Management, where he oversaw alternative investments. Rzepczynski was also President and Chief Investment Officer at John W. Henry & Co., an iconic Commodity Trading Advisor. He is on the Advisory Board of the Chartered Alternative Investment Analyst Association (CAIA), the Associate Editor of the Journal of Alternative Investments, and a former board member of the FIA Futures Industry Association.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

Advantages of podcasting as a format over traditional media outlets
Why prices are "primal"
Prices as a heuristic
Rzepczynski's ah-ha moment that brought him to the heuristic of price
Why a complex education doesn't necessarily mean you should use a complex system
Why knowing the transductive reasoning behind price movement is unnecessary
VUCA: volatile, uncertain, complex, and ambiguous
VUCA in the context of portfolio management
The zen of trading and portfolio management; the importance of passion in investing
The notion of over-diversification
Dynamic allocation
Convergent vs. divergent
The improbability principle
Tail events and preparing for the unexpected
The notion of systematic vs. discretionary
How trend following is represented in the mainstream media
Complexity
Risk and return
Volatility and complacency

Jump in!

---

I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 289: Alex Tabarrok & David Nott Interviews with Michael Covel on Trend Following Radio Nov 03, 2014

Show notes

My guests today are Alex Tabarrok and David Nott.

Tabarrok is the co-author of the Marginal Revolution website. He's an economist at Covel's alma mater, George Mason University.

Nott is the president of The Reason Foundation–an organization that is all about free minds and free markets.

The topic is libertarianism.

In this episode of Trend Following Radio we discuss:

Covel and Tabarrok discuss China and the importance of teaching Chinese to American children; the greatest anti-poverty program in the world; the difficulty of improving the infrastructure of the United States; regulation and innovation; interest groups; benevolent dictators; the need for a democracy in an information age; innovation in the current American education system; why the American education system is focused on getting you to work for the man; women in the American education system; innovation, intellectual property and patents; the cumulative properties of innovation; grounds for optimism in the United States when it comes to innovation; how George Mason University became a libertarian economist hotspot; if Europe is following the path of Japan; why the European monetary union was a mistake; and why travel can create optimism.
Covel and Nott discuss The Reason Foundation and what it means to be a libertarian today; how Nott explains being a libertarian to people; how the actor and comedian Drew Carey came to be involved with The Reason Foundation; finding the optimism to stay focused on swaying people to the founding principles of our country; politics in China; the 2008 financial crisis, state control, and Reason's response to the bailouts; common sense notions; pension reform; drug policy reform; the cultural policies surrounding prohibition; expanding the idea of liberty to younger people; Vernon Smith and Walter Williams.

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 288: Frank Curzio & Robin Griffiths Interviews with Michael Covel on Trend Following Radio Oct 31, 2014

Show notes

My guests today are Frank Curzio of Stansberry & Associates and Robin Griffiths, the Chief Technical Strategist at ECU and formerly at HSBC.

The topic is markets.

In this episode of Trend Following Radio we discuss:

Covel and Curzio discuss how the fundamental guys justify all time highs in the equity market; the Shiller PE ratio; the importance of analyzing interest rates; Warren Buffett recent investments; what the Fed would do if we went down 30% today; why having a low interest rate environment creates a good situation for stocks; being prepared from a risk management perspective; Zero Interest Rate Policy, its effect on equities and bonds, and tail risk; comparing the environment today to the 1987 crash; hypothetical situations surrounding the S&P 500; exit strategies; and the 24-hour news cycle.
Covel and Griffiths discuss how to use fundamentals in an age when interest rates are artificially controlled; Griffiths' history as a mechanical engineer and how he found his way into trading and technical analysis; regression analysis; Elliott Wave and cycles; the idea of whipsaws; geopolitical risks; China, India, and the rise of Asia; not trading off of geopolitical fundamental information; how Griffiths came to the conclusion that the efficient market hypothesis and much of what the mutual fund industry depends on doesn't hold water; spikes and why people in 2014 think that all spikes are gone; Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay and the cyclical nature of booms and busts; and virtual currencies.

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 287: Toby Crabel Interview with Michael Covel on Trend Following Radio Oct 27, 2014

Show notes

My guest today is Toby Crabel, a tennis player who is now a commodities trader. In 2005, the Financial Times called Crabel "the most well-known trader on the counter-trend side".

The topic is commodity trading.

In this episode of Trend Following Radio we discuss:

Crabel's history as a pro tennis player
Longevity and consistency in tennis and trading
Where Crabel stands with the total number of systems he employs
The source of Crabel's profits and the philosophy behind it
Price action
Winning and losing volatility
Why Crabel needs price movement and volume
The idea of price shocks and the importance of being aware of them
The process of moving from high drawdowns to a much lower drawdown
The importance of diversity
Early lightbulb moments that informed Crabel's trading style
Crabel's experience with Victor Niederhoffer
How the philosophy of Objectivism has informed Crabel's life
The liquidity of futures markets
The importance of persistence

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 286: Alex Greyserman Interview with Michael Covel on Trend Following Radio Oct 24, 2014

Show notes

My guest today is Alex Greyserman, Chief Scientist at managed futures firm ISAM. He is also a professor at Columbia University. He is a member of the ISAM Systematic Investment Committee. He has 25 years of experience in the Managed Futures industry, having starting initially as Research Director at Mint Investment Management Co.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

Idea of young college graduates writing articles about the death of trend following while firms like Greyserman's continue to have tremendous success
Alternatives to thinking only 'long stocks'
Greyserman's first meeting with Larry Hite and how they have come to have such a career together
Why trend following is about more than getting on the right side of the S&P trade
The difference between cross-sectional momentum and time series momentum
The phrase "crisis alpha" and why trend following does well in times of crisis
The cost of not having trend following in your portfolio
Benchmarking and diversification
Why the worst thing you can do is "trend follow a trend follower"
The science of trend following
Speculation
Trend following your life–not just the markets
Dispersion among trend following traders
Effect of a higher rate environment

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 285: Anthony Todd Interview with Michael Covel on Trend Following Radio Oct 20, 2014

Show notes

My guest today is Anthony Todd, the CEO of Aspect Capital, one of the most successful managed futures trend following firms. Todd co-founded Aspect in September 1997. Before that, he was with AHL.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

Why prices aren't random
Finding an inefficiency that the academic financial community refuses to acknowledge
The idea of "predictable" patterns in the market
The desire to know static positions
How crowd behavior drives trends
Addressing misconceptions
Using fundamentals in a systematic way
Defining Todd's medium-term style of trend following
Why "it's less about the genius of the trade and more about the repeatability of the approach"
How long you can be in a particular market before you give up on it
Client understanding of trend following drawdowns
The phraseology of "crisis alpha"
The culture that Todd has built at Aspect
Todd's advice to young entrepreneurs.

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 284: Jason Fried Interview with Michael Covel on Trend Following Radio Oct 17, 2014

Show notes

My guest today is Jason Fried, the co-founder and President of 37signals, a privately-held Chicago-based company committed to building the best web-based tools possible with the least number of features necessary.

The topic is his book Rework.

In this episode of Trend Following Radio we discuss:

The first dollar Fried made online and other formative experiences
Keeping business simple
Making something more valuable than the dollars people give you
The intimacy of exchanging money
The idea of doing less than your competitors to beat them
Building an audience
The "real world"
Why an MBA program might not teach you much about entrepreneurism
Corporate structure
Focusing on what will not change
Zen and the moment of right now
Not focusing too far into the future
Fried's experience with Jeff Bezos
Idea of improvisation or "winging it" in business

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 283: Roland Austrup Interview with Michael Covel on Trend Following Radio Oct 13, 2014

Show notes

My guest today is Roland Austrup, the Chief Executive Officer and Chief Investment Officer at Integrated managed Futures, part of the IAM group out of Canada. Austrup's firm comes at trading from a slightly different perspective: very systematic, but also using fundamentals systematically.

The topic is trading.

In this episode of Trend Following Radio we discuss:

How Austrup got started in the industry, and whether he was always a "quant" thinker
Early experiences with Ed Seykota
Whether Austrup uses a systematic use of fundamentals or a discretionary use of fundamentals
Why systematic can be frightening to certain people
Managing risk and the return to risk profile
Why Austrup targets a downside volatility of 13%
Why "the returns will take care of themselves" if you manage risk correctly
Trading trends and not market noise
Being on the right side of a trend
The phrase "equity-like returns"
Reviewing trend following performance in recent years
Why Austrup's strategy is not based on prediction
The importance of a broadly diversified portfolio
Lack of correlation to traditional long-only equities strategies
The current low rate environment

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 282: Kathryn Kaminski Interview with Michael Covel on Trend Following Radio Oct 10, 2014

Show notes

My guest today is Kathryn Kaminski, the deputy managing director the institute for financial research (SIFR) Stockholm Sweden. She's also a contributor to CME Group. She earned her PhD at the MIT Sloan School of Management. At the MIT Laboratory for Financial Engineering, she conducted research on financial heuristics in collaboration with Professor Andrew W. Lo. Her new book, with Alex Greyserman, is "Trend Following with Managed Futures: The Search for Crisis Alpha."

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

Survivorship bias
Kaminski's background and upbringing
Convergent risk-taking strategies and divergent risk-taking strategies
Social networking as an example of risk
Apple as an example of convergent/divergent
The importance of failure
The efficient market hypothesis, the idea that trend following is "voodoo", and the lack of transparency in trend following
Critics of trend following
Kaminski's "ah-ha" moment with trend following
Why trend following works in times of crisis
The adaptive markets hypothesis
Looking at markets like ecologies
Divergence and "punctured equilibrium"
The process of going back 800 years analyzing trend following
The idea of black boxes
The acceptance of trend following

Jump in!

---

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Ep. 281: Vineer Bhansali Interview with Michael Covel on Trend Following Radio Oct 06, 2014

Show notes

My guest today is Vineer Bhansali, the managing director and portfolio manager at PIMCO. His most recent book is "Tail Risk Hedging". He has 24 years of investment experience and holds a Ph.D. in theoretical particle physics from Harvard University.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

"Trend Following Through The Rates Cycle"
Trend following in the classical sense
How trend following started to become part of the discussion at PIMCO
Introducing new ideas to PIMCO, corporate culture, and to clients
The three hypotheses tested in "Trend Following Through The Rates Cycle"
Currency trading and trend following returns
Why larger trend following shops may have trouble getting into smaller markets
Trend following across a diversified portfolio and classical trend following approaches
Connecting Bhansali's hobbies to the quantitative world
Structure and thinking in terms of code
Imagining and building simulations
Being distribution aware
Why being at all-time highs is not the time to feel satisfied