Interview With Michael Covel: Masters in Business (Audio)

plus copies. He goes around the world lecturing on this. UH. He's met with some of the most successful futures traders in the world, everybody from Larry Height to Build Done to John Henry to go go through the list. It's amazing. UH. If you're interested in commodities trading specifically, or the concept of trend trading dress generally, this is really h an

interesting conversation. What I found most fascinating, UH, Mike and I have both been completely enamored by Richard Dennis's total experiment. And for those of you who may not be familiar with this, UH, in Jack Schwager's Market Wizards, a classic

book on the art of trading and investing. H Richard Dennis's is brilliant commodities trader made eighty million dollars one year in the eighties, back when eighty million dollars was real money, and had a debate with his partner as to whether or not great traders are born or made. And Dennis's argument was that the way they grew turtles in the turtle farms and in the Far East is

how he could train h traders. And so they took out an end and a number of newspapers, brought in a bunch of uh newbies and people with no experience or background in this, and ultimately taught them to trade. And and the turtle traders have put together a fairly spectacular track record following Dennis's instructions. And so the conclusion, by the way, the punch line to all this is they developed this debate after seeing the classic Wall Street

movie Trading Places. And so the conclusion is, yes, you can train traders to follow a few specific rules, to develop discipline, to manage their losses, and create fantastic traders. And and this is really a really interesting conversation. I think you'll find it absolutely fascinating. Without any further ado my conversation with Michael Covel. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My special guest today

is Trader author and fellow podcaster Michael Covel. You probably know him as the author of the best selling trend Following. He's all so the author of Complete Total Trader, as well as three other books. Born in Quantico, Virginia, grew up in the US, currently residing in Saigon. Michael, Welcome

to Bloomberg. I want to jump into your background a little bit because you wrote, you know, in finance, a decent selling book is ten thousand, twenty thousand, you know, unless you're Michael Lewis, you're not selling half a million copies. But trend Following, which is really a very specific trading um book that's old, hundreds of thousands of copies, didn't it. I know it's sold over a hundred thousand for sure.

So yeah, that's a pretty cool thing. I feel very fortunate to have this fantastic strategy to write about in this cast of characters that just have changed my life for sure. So let's talk about how you found your way into this. You grew up your dad was in the Navy. You grew up in Quantico. Your father was

a dentist. How do you go from being colon an army brat but essentially a Navy brat to finding your way into the world to final He was only in the Navy for a little while and they started private practice. I grew up in Vienna, Virginia, right outside Quantico, about an hour and a half away. Uh, political science major. I mean that's not exactly a prelude to writing trend following right. Not the only political science major in the world of finance. I have plenty of others. So, you know,

one thing let to another. I ended up in grad school, taking a last semester in my early to mid twenties in London, London School Economics or something unrelated. It was unrelated, but I was there and I knew, Okay, I'm going back to the States. I want to figure out a way to get rich. The classic I'm gonna get rich. And when I went back, I gone to grad school at Florida State, and the only alumni that I could find that had graduated from Florida State literally was the

recently retired CEO of Solomon Brothers. Jim Massey, and he was he had just made like five six million bucks and you know, n two that was a good amount of money, you know, And so I bugged him. I took the train up to Greenwich. He was right there in those those two buildings alongside the tracks, right at the train station, right. So he took me out to lunch. And I didn't know anything, but I had, I had found my way. This is my very first guy I'm gonna talk to on Wall Street. Takes me to a

little French diner. We start chatting. I start chatting. He's not saying a word. I'm just like, oh my god, this guy's gonna make or break me. He's not saying a word. So finally I said to him, I said, well, he's munching on his salad. I said, hey, did I say anything today where you thought I was full of blank? And he said yes, really, he said, you told me today that you wanted to be the best. You don't want to be the best, you just want to win. And let's go back to my office and let's talk.

That was my doctrination to Wall Street. Really that's a

fascinating conversation. So how did that lead you to trend following how did you get the exact same time I was having that conversation, I was in Borders Books job in Tyson's Corner, Virginia about one month later, and this is nineteen and I see a magazine and the magazine was Wall Street's top one hundred paid for the year nineteen ninety three, number thirty five, number thirty seven somewhere, and there was a guy named Jerry Parker and he

had just made thirty five million dollars in one year, and he was a turtle. And that fascinated me because I was like, Oh, there's something going on here. This guy is not an economist. He doesn't know every piece of fundamental information in the world. I might be able to do this. Now. The entire next segment of our conversation is going to involve the turtles, So hold off discussing that specifically because I really want to dive into that.

But from seeing this list of of top paid Wall Street people, how did you find your way from that into active trading? Well, I kept going on for about another year, and I kept bumping into other people. I was literally coming to conferences and just seeing who I can meet, who could I knock on the door. I went to see Bill Dunn and Stewart floorda a long time trader forty year track records. I found John Henry in an event and approached him. I still remember his advice.

This would have been five. John Henry, very famous trader, ultimately ends up owner of the Boston Red Sox. He's done pretty well, yeah, done pretty well. Brought them to a World Series for the first time, a championship, done three the first time. And I don't know how many decades I think, and um, just just one of the greatest track records in the history of finance. So what

sort of advice did he give to you? His advice was short and sweet, because I said, I was looking at him, like right after he was on the other side of the Barings bank trade within months of that, and he said he looked at me and he said, you know, it never gets easy losing money for people. Quite fascinating. He didn't want to talk much more than that pretty shy guy if anyone's ever met him, not a very big guy, but he was. That was all

he wanted to tell me. And he looked beat up, even though he had probably just made a half billion dollars in the preceding ninety days. He looked beat up. But that's heavy lifting. That's a lot of work. It's exhausting, its training. It's especially the bills are stacked up on the ground and you have to pick them up. It's heavy, right, that pallets, what's the palaties? What is it like? Ten million dollars is a pallet of paliative cash. So uh so,

now it's John Henry. So after all of this, I decided to put up a website and I ended up and I'm not gonna go into it. Yes, I know you want to come back to it. But putting up a website, my first blog in was really what got me started. That's amazing. And what was the name of the website way back when? Because back then the big picture was a Yahoo geo cities site. I always had a legitimate domain barrier. I was always looking forward a little bit. It was Turtle Trader dot com. You're listening

to Masters and Business on Bloomberg Radio. My special guest today is author and trader Mike Covil. One of the books he wrote is The Complete Turtle Trader. Those of you who may have begun your career in finance by reading Jack Schwager's Market Wizards. Should be familiar with the chapter about Richard Dennis and the turtles. And I found that to be an absolutely fascinating part of that. And I want to discuss how you found your way to that.

A little background. All the way back in Richard Dennis had made eighty million dollars for the year, and in modern terms, that's almost two million dollars. That's back when a million dollars was was real money. He was a legendary floor trader, a systems guru, and really an industry leading money manager. And I'll let you tell the story of how did the turtles come about? Fascinating story, and there's still to this day myth and legend and perhaps

some superstition. People debate things, but here's the bottom law. And rich Dennis had made his first million by the age of nineteen seventy six, is a floor trader. And again, seventy six a million dollars, there's a lot of money. I think there was about he had made about two hundred million total by like eighty two, and he was about thirty seven years old. Uh, And what I'm about

to say is absolutely true. Him and his partner Bill at cart they went to see a movie and the movie was Trading Places with Dan Ackroyd and Eddie Murphy. They went to see this movie. They walked out and his partner Bill at Cahart said, hey, Rich, you we can never do that. You're a savant. You're brilliant. They took a guy off the street. How what a silly story. We can never do that, And Rich said, Uh, I'm

not special. We can teach people to do what I do another words, come up with rules and come up with guidelines to quantify and systematize what I kind of learned intuitively. They put ads in barns in Wall Street Journal, They hired trainees. They got like two thousand applications. They gave a screening test to a true false questions asking what your favorite movie was, these types of things, and

they selected about twenty people over two years. They gave them approximately two weeks training, staked them with varying amounts of cable from a couple hundred thousand to a couple of million. They basically turned them loose for three and a half years. At the end of that three and a half year period, that group of approximately twenty had made a hundred million dollars profit. I actually went to the n f A, the National Futures Association, and I

pulled all of the original documents. When they left the program to go registers money managers, they literally it was like waiter kitchen help. I mean some I mean some of them are very brilliant. Nonetheless, they've gone to great schools and stuff. But it was a completely rag tag Desperit random, completely right now, it's awesome and so, in other words, the battle between nature and nurture, Dennis essentially proved you can create a great trader. You can build

a great trader. It's not just something that you're either born with and have or don't. I never questioned it again myself. I think a lot of people still hear that story and question it. I saw that story and I was like, I saw the backgrounds, and I said, that's it. Even if I never want to do trading, I have to accept this as truth. It's it's an amazing tale that the movie Trading Places inspired a real life version of let's figure out if we can actually

create a person and turn them into a trader. So so let's talk a little bit about the subsequent careers of the turtles. What did they do afterwards? How did they all work out? You know, one of them became well, all of them started money management firms, most all of them, and most all of them did extremely well. I mean, making millions of dollars, you know, the typical success mark.

Everybody sees. One of them, in particular, Jerry Parker managed over several billion for probably twenty plus years and just made himself an incredible fortune. One of the most plane spoken, plane talking guys. And he was here right now, he'd be saying, Hey, it's all my success is all because of Rich Dennis. Rich Dennis was kind enough to say, here's how I made a fortune. Here are my rules,

go do it. So here's a quick question. Under normal circumstances, when someone identifies an inefficiency and an inability for the market to recognize an issue, eventually that gets arbitraged away. Why haven't these rules been arbitraged away or copied by enough people that they no longer have uh an effect? And Well, the way I would answer that is the turtles were just trend following traders, and so they weren't

the only trend following traders. Rich Dennis had Piers peers like Bill Donne and Ed Sakota and Keith Campbell and David Harding and Larry I and all of these guys on affiliated with Rich Dennis. We're running trend following firms. So if you just look at the history of this, you say, well, why does trend following keep working? Why is it not broken down? Well? When is human nature

going to change? That's the key to all of this is that people are unchanging and even though we may have high frequency trading, we may have new entrants into the marketplace, at at the very bottom of it, it's it's human nature that drives these things. Yeah, I mean, we're just we want to get rich fast, and you know, we start losing money, we just think it's gonna come back, and then we lose all of our money. So let's

talk a little bit about trend following. Next next segment, we'll talk a lot more about human nature and some of the behavioral issues. But what was it about um trend following that made it so successful? And and let's give this a little context. These aren't people buying stocks and bonds, They're buying futures. They're training pretty much anything from commodities, two currencies to what have you. And they're doing it with a lot of leverage. So how does

that translate into the trends? As your friend? And that's how these folks made their money. I don't think instrument is critical, it's important. I mean, futures are the best st instrument you got, the leverage you get like liquidity, that's the best place to be. But you want diversification.

You know, if you wake up in its early two thousand fourteen and every economist down there is saying, hey, you know, we don't see anything happening for oil, and you know there's no prediction of a drop in oil. But if you're a trend following trader, you don't have a a mindset or a prediction of where any particular market's going to go. So when it starts to move, you're just following along. You're following the crowd, your indicator, your your reason for moving is the price action. That's it.

So if you think about trend following, think about with like five kinds of ways to think about trend find five rules. First, what's the portfolio you're going to trade? Trade everything? So generally trend following traders historically have chosen diversified portfolios and your goal, your oil, the equity indices, the interest rates, the currencies, the big liquid movers. Number number two, when are you going to get in? What's gonna force you to get into a position? Number three?

How much you're gonna bet? You can't bet unlimited. You know you're gonna bet half percent, one percent, ten percent. I can't tell you. Many times I've given a presentation, I'll ask an audience, to be an audience of a thousand people, how much would you bet on each trade? People actually say tempercent. Look, come on, you know what's gonna happen at temper cent? The last four and five? When do you exit this trade with a winner? When

do you exit this trade with the loser? What does this all look like when it's crunched through the system. You're basically a venture capitalist. You're basically a film financer. Jason Blum he finances films, right, How does he do it? He bets on a bunch of things that cost very little money, and he'll get one big paranormal behavior or whatever it's called, and that's the one that makes him. That's the one that makes the fortune and pays for the losers. For the other ones, none of this stuff

can be predicted. I'm very ridults. You're listening to Masters in Business on Bloomberg Radio. My guest today is Michael Covel. He is a trader and author, probably best known for trend following and The Complete Total Trader. He also has an extensive podcast, over four hundred episodes. And I've really enjoyed both listening to other people's podcast and putting together my own little podcast. How did you find your way into? Uh? Podcasting? We get to beat in school? Huh? We never get

out of school now, right? Absolutely, it's it's an on from my perspective. I get to bring in some really really smart people and say teach me. It calms me down? Yeah did when you listen to really smart people over and over it again, I really I find myself calmer.

I started it in January of two thousand twelve. I my last book came out before that, about six months before that, And I don't know, I had done short brief podcast several years before, like five minute little speech segments, and I just decided, well, okay, I want to do a podcast. It was completely on a lark. It was just let's do it. And this was before what iTunes looks like today, so that was it was just really and one thing led to another. Remember Jack Schweger, who

wrote the book The Market Wizards that you mentioned. When he came on, that was when I saw my first pop because it had been two or three months of okay, listens are going up, and then when Jack came on and he was promoting a new book, Uh, that was like boom, and it's exciting what that stuff happens. Right, Schweger is legendary. I mean, how many people do you think the first book they read when they started in finance was Market Wizards. So I had quick, funny digression.

I had Schwegger on the show, and when I invited him, he said, oh for the guy who gave me that review. Absolutely, Jack, what are you talking about? I want you on the show, but I have no idea what you're talking about. He's like, you wrote a review of Market Wizards on Amazon a decade ago and it's the top. You know, it's the it's the most influential review. It's that So I had to go on Amazon. I'm like, oh my god, he's right, I forgot about it? Was it? So we had really

interesting conversation. I think he's a fascinating, fascinating guy. What was it that made you gravitate to long form podcasting? If it was it, was it just that, hey, I have some time to kill or what motivated that. I was working on a new book and I knew it was gonna be coming out immediately, and I just I don't know. It was just it was just something where it was in my in my soul. I want to do this, I want to talk to people. Look, I had done a film. I had made a film. I

traveled the world for several years. I had had a chance to sit down and do long form interviews already. And the film was Broke, an American uh story, so to speak, something like that. Right there was like you were in there, you were in there doing something. It was called it was broke, Broke, Broke the new American jury, new American right, My My my premise being is it broke is the new American jury. People want to be broke because their actions are so irrational that that makes

some interesting sense. So so let's we're gonna talk more about broke in in a ladder segment. Let's let's keep coming back to the to the podcast. So any of your guests really surprised you with things they said, Yeah, and I should. There's a timeline of like guests that

broke the podcast. First was Jack Schwegger, and then my first guest to my first non trading guest was Dan Airily, and then once I got Dan Eireley, I had a guy on who had been in my film named Vernon Smith who won the most won the Nobel Prize, and Brian brilliant guy George Mason now somewhere in Chapman in California. But once I had those guys on, I went for

the home run. The home run guest, the one guy that I knew if I could get, was gonna really help my podcast, and that was Daniel Kneman, who won the Nobel Prize shared it with Vernon Smith, and so I had asked him six months prior in no response, then I sent him an email knowing that he had won the prize the same year as Vernon Smith. They shared it and I sent a link to Vernon Smith and he rubbed me back and he said, I listen to that podcast with Vernon Smith, it's very good, and

I'm sure I'll come on your show. And the thing that he said that was so amazing to me. It's not related to making money or investing. But he was in Nazi occupied Paris and there was a curfew and he was not supposed to be out, and he was six seven eight years old and alone walking the streets and a Nazi soldier spots him, and the Nazi soldier says, come here, come here now. Sure Conment is thinking at

that time, I'm done. I'm done. The Nazi soldier sits him down on his knee, pulls out his wallet and opens up his wallet and shows him a picture of his son. They both spoke different languages and they shared that experience and condom and said that was what That was what triggered me into psychology. That that fascinating moment. I want to study people for the rest of my life. Konomen just realizes, Wow, what we think we know about people,

it is all wrong. Those quick judgments. There's the Nazi soldier, He's gonna kill me. I'm a I'm a Jew in Paris on the streets. I'm gonna be killed. Didn't happen and that caused him to reassess, take a step back, and say, how can I how can I look at psychology for the rest of my life? He really knew what that instant. That's amazing, old fascinating. I'm Barry rich Helps. You're listening to Masters in Business on Bloomberg Radio. My guest today is trader and author Michael Covell, best known

for the trend following series of books. We were talking before the break about Daniel Kheman's epiphany as a child on the war torn streets of Nazi occupied Paris. Let's let's let's talk a little bit about human behavior in psychology. What what did you learn from Coneman about how psychology effects investing? Loss of version? Nobody wants to take a loss. I just had. I happened to have lunched with one

of the guys that was profiled. And Jack Schwegger's book Larry Hyde and Larry is famous for just saying, you know, risk management, how much can you afford to lose? That's it. All the academics can have all the complicated stuff and all the white papers, how much can you afford to lose? That's your risk management, and that's loss a version tied in with conom and that's just I think many of

the traders actually had figured out long before. It's not taking anything away from common but clearly many traders had figured this out. I mean, David Ricardo back in the sevent undred sure they had figured out lost reversion many many, arguably centuries before they give out the Nobel prizes for it. I started on a trading desk and one of the first things they teach you is it's okay to be wrong, it's not okay to stay wrong. And that's essentially a

form of of you know, risk management. You can't hope and wish and pray for a trade to suddenly go your way. If it's going against you, cut your losses and move on to the next one. You gotta have chips to play right, that's right, and if you get wiped out, you're done. You you move along. So, uh, System one and system too from comment is essentially what are what is your immediate response? That's that's the systemic way your brain has managed to keep you alive on

the savannah. Not really well suited for for trading in the capital markets. Is that terrible? Right? I mean, especially if you look, I say terrible that people could say, hey, that's Mike Covel's opinion. Terrible. If you look at the track records of the traders that have got you know, durations going back decades, what do they do? It's systematized, They have rules these This is not a day to day guessing game. There is not not gut instinct. They're

running businesses. You gotta run. This is like a business, right, I got a gut instinct, my my stomach says, by this and sell that not a good way to run managed money. You know. Isn't there a story about George Soris in his back? Yes? Absolutely, you really do you really believe it? I believe that on a subconscious level, his back is warning him about something that he may not have. But do you think do you think the buying sells signals and the risk management is attached to

his back? No, of course not. You're not running billions of dollars and whether or not your sacrililiac is bothering you that. But I think the average person probably hears that story and they still think, oh, you know, it's seat of the pants, it's instinct, it's gout, and it really doesn't work. That way. So so let's let's delve a little more deeper into behavioral eras that are are fairly typical. What is the most common behavioral error that

sinks traders? We mentioned loss aversion, but I tell you framing is one to just how does one define framing? How does one they look? You can look at too. You can look at a number in two different ways. You know you can being right fifteen percent of being you know wrong? I mean, there's let me let me stop you right there. So doctors are trains in a really interesting aspect of that. So if you tell a patient I have bad news and I have good news.

The bad news is you have this fatal disease. The good news is there's a surgery with a pretty good track record of of of survival. You take two groups. To group one you say you have a seventy five chance of survival if we do this procedure. And group to you say there's a twenty five percent chance that you won't survive if we do this procedure. What do you think the reaction is amongst don't want to do it? That's right, and yet it's the same statistics. So that

applies to trading as well. How how does framing affect what traders behave? How do they behave? Are they behave in all the wrong ways? They behave in the ways they don't help them. I mean, look, this is about measurement. You have to measure how much money you have at all times that you can't do that meaning money is your inventory. I'm gonna quote your way to keep score. So you know money, capital is what you have. It's what you're gonna have to turn over. It's your inventory.

If you're running a a gap and you have a certain number of shirts and pants in the back, you want that inventory turning over constantly when you're running a trading operation for yourself. Is that the way to think about capital is its inventory that you have to manage absolutely, because look, we know what money can be used for. We're both in New York City. The streets are littered with gold, there's all kinds of toys we can buy, there's all kinds of fun, fun things to do, as

well as basic survival, security, health, etcetera. Um, that's just where we start. There's a great trader out of London. We'll probably end up talking about him. David Harding of Winton Capital, and I saw him make the comment recently it's once you reach that point where money is not an object, your trading improves. So, in other words, the psychology of I gotta hit a bogey this month, I gotta make some payments. Once that pressure goes away, once

that's psyche impact is lifted, they actually get better. Then you're just playing the board game risk, you're playing chess, you're playing whatever skill game. You're applying the rules. When do you think back when you're a kid, didn you play Risk as a kid? Like when you're a kid, you play the game the right way. You don't play it based on whether or not I can go to the Apple Store by the newest iPhone today. It's a

that's fascinating. So what other little psychological insights did you garner from interviewing some of these famous Mobil Prize winning I love gird Gig and Rendzer like that. Oh, it's he's awesome though. Risk Savvy one of his most recent books. One of the things that he talks about. It's not necessarily trading, but it gets you in the probabilities mind frame. P s A tests like you know here, I'm I'm

forty seven. You know, you're you're probably about the same age as right, you know, so everyone wants men to go do these tests, all right? Do these tests? These tests kill us. These are not good things. We're all going to have prostate problems at some point in time of our life. But the vast majority of us don't need the after effects of a p S A test and continents and all kinds. You know, your wetting your genes, who knows what's going on. We don't want that kind

of stuff. So Gird points out that you have to look more closely at the numbers and don't just let the fear drive you. So we've seen a number of studies about mammograms and false positives and doctors not really understanding how how likely it is that a positive result is actually a false positive and not into an industry of cancer. Is that what Geared is referring to. Look, the vast majority of us, if we live okay, et cetera, we're gonna be fine. There's something's going to take us

all out at some point in time. But too much testing, too much of this stuff is absolutely harming us. So let me ask you about a couple of your podcasts that I have tied up but haven't listened to. Uh. Brent Steambarger, who is somebody I've read for a year is and really enjoyed his work. Brett, I think is

the is synonymous with practical, pragmatic. Right. He just breaks down, so you know, if you imagine walking into his office, as he was a practicing psychiatrist, walk in and he's gonna take whatever drama you might have and break it down to its component parts and get you to think about each of the component parts. Once you do that, it's not so scary. I mean, that's that's the brilliance of what somebody like Brett does and how he ended up doing a lot of work with some fairly well

known fund managers and hedges and stuff. How different is that from just the broad based Here's here are the cognitive arrows that humans make all the time. I think it helps people to have a coach. Doesn't make a difference how much money you have, how much success you have. If somebody can walk in and analyze you unemotionally and say here, I've broken it down, I've observed you, here's what you need to think about. That helps I'm sure that's one of the secrets to Brett success. So we've

talked about risk aversion, we've talked about framing. What other cognitive errors or or behavioral problems impact traders more so than they do other people. One of the biggest ones, I guess would be hurting. You know, a crowd effect, Ryan, and a crowded trade is always a dangerous place to be. But look, if you've got a strategy to follow the crowd, and that can be a good thing too so, but look, too many traders don't have a sound strategy when it

comes to something like hurting. They will see the crowd move, they'll get on board, but they don't have a full plan, thought out. Trend following, for example, takes into account this hurting and says, you know what, if everyone's moving that direction, we want to be on board. Why not? Why not let's be on board. Look, take take a restaurant. For example. You walk into a new city like New York City. If I walk down the street, I haven't been to the city for four years. If I walk down the street,

I walk four blocks, I passed ten restaurants. Nine of those restaurants are empty. One of those restaurants is packed. Where am I eating? Of course, you're gonna follow the crowd. They're all there for a specific reason, So you're using the crowd as a sign that someone else has done their homework, someone else has done the fundamental research. They're piling in for a specific reason, and you think it's gonna take that that trend further and you want to

participate in. I'm gonna pile into and I'm gonna have a stop losses. I pile in stop loss in that case, I guess would be food poisoning. But if I get that, I'm getting out. So, Mike, if people want to find your stuff, how can they track you down? I pretty much own the word trend following, so you can find me podcast, Twitter, or websites, tread following dot com. Good

good too, Good to know? UH. Be sure and stick around and listen to our podcast extras where we keep the tape rolling and allow the conversation UH to continue on Be sure and check out all of our previous seventy or so podcasts. You can find them on SoundCloud, Bloomberg dot com, and of course on Apple iTunes. Check out my daily column on Bloomberg View dot com or follow me on Twitter at rid Halts. I'm Barry rit Halts. You're listening to Masters in Business on Bloomberg Radio. Welcome

to the podcast. This is Barry Ridholts, and you've been listening to Masters in Business on Bloomberg Radio. My special guest today and they're always a special guest is Michael Covel, somebody I've known for g a decade? Is it a decade? Almost a decade for sure, pretty close to it. So it's funny. We were talking about during the break about about podcasts, and I do some of the same things every time when it's the podcast time, I throw my

hands in the air. I get to like relax. It's a deep breath because I'm not hearing in my ear halfway one minute, thirty seconds. There are no time constraints.

It's always a challenge there too, right, You've got to I'm doing it on the phone, you're doing it live, but you still have to bring something out of somebody, which for some people you just have to say, how's it going, and there's an hour and a half and for other people you asked these questions and you get answers like not really, what am I gonna do with that. That's like a giant meat ball that lands. Okay, well that's all the time we have. It's that sort of stuff.

So the funny thing you and I were talking about doing the podcast earlier and how this came about. When I first started doing this, the first twenty I recorded, but they weren't broadcast, so we had no idea were these any good or people gonna listen to these? It

was I was behind somebody else who were. There was a run of things that had to go out before these started broadcasting on the radio and going up on the site, so we really were kind of groping in the in the dark, figuring out what works, and then to make matters worse. I have no professional radio training.

I have no expertise. You neither, so with me, I have to follow this format of Bloomberg Radio or any radio for that matter, where you do the intro and you set up the guest, and then on the longer

segments halfway through you have to reintroduce the guests. You may have been wondering why you heard repeatedly and our guest today because I have to reintroduce the guest, and then you have to do the outro at the end of the segment coming up, we can, and for the life of me, I could not get those outros right because it's really very, very counterintuitive. So when I first started, it was always when we come back. No, no, it's not when we come back. We're not going anywhere. We're here. Now.

Think about someone sitting in your car, in their car listening to the radio. They're not going anywhere. Coming up after that, No, it's not after the break it was. So it took me a long time, and after about fifty episodes, it's practically a year. So I would come back do the podcast on a Monday, and I'd come back on a Tuesday and do the intros and outros. It was take me an hour to do all that stuff, to do the intro and the ending, and now it's

a tape in my head. I don't know if you've experienced, you've done four Love him or hate him, Howard Stern teaches the profession of broadcasting. He's he is unbelievable. I've thrown up some of his podcasts. I shouldn't call that.

Some of his interviews on the blog, things that Louis c K and Madonna and James Taylor, and these are like masterful, masterful into his Seinfeld interview of either two thousand thirteen or two thou and fourteen on the Howard Sterns Show, easily found on YouTube or whatever, is one of the best pieces of listening. It's amazing. And I went through a period listen. I used to listen to Howard in my twenties and thirties, and you know, it

was it was sophomoric and hilarious and and great. And then at a certain point it's like, I don't have time for this. And then once he went to exam, once he went to satellite radio, and really became more interesting in many ways, more sophisticated anyway, a little less tough, more like a little more you know, a little bit of gravitas. He is a master in the field of broadcasting, and people don't really think of him that way, but

they should, you know, people out there listening. Okay, so you and I are two amateurs essentially doing this right. So I'm hoping to achieve amateur status one day. But you still, if you're gonna be, if you're gonna have enough cohn is to bring on Nobel Prize winners to your show. You've had more, You've had four, I've only had three. Wow, I atready start looking for right on your tail, although on a per capita basis, on ahead

of you. But it's that's true, but it's when if you're gonna have those types of minds on, there is a certain you have to be confident, you have to be well researched, and you have to make those people stimulated in such a way that they're not bored. The worst thing is to hear a board guest on your show. That's absolutely right. And and the way I found that that works is we do a deep dive. My head of research who you just signed the trend following book

Till Mike Mike Batnick. He and I sit down usually a few days before the podcast, and the question is what do we want each segment to be about? And then what sort of and I he looks the world very differently than I do, and he and I both come up with very different questions, and a lot of the questions that he comes up with, I'm like, you know,

I never would have thought of asking that. And between the two of us, you know, when you're sitting down with a guy like Leon Kooperman of Omega Advisors, who's got a reputation being a tough guy and a difficult boss, and he's in work at six am and he leaves at midnight. And guy's a billionaire and he still keeps those sort of hours. You better bring the serious questions.

You can't just lollighag through that. And uh, that's a really really significant thing if you could get a guy like him to say, hey, this, these are really impressive. These are really good questions. You've gone places. And my argument probe podcast has been, look, we don't the logo, the model of the show is no stockpicks, no forecasts.

So right away, I'm different than those are my rules, no podcast, all right, I never would have never had date on the right side of of the of the five books in I've never had anything amounting close to a pick that's forecast. So that makes you different from all these other all these other media, and on top of everything else, it makes you different than the conversation. The focus, the boredom factor goes away for a guest who doesn't have to worry about, well, why do I

have to do a stockpick? And it is it gonna be a good one? Is it gonna be a bad one? A I'm gonna have to hear crap from my brother in law. Two thanksgivings from now about this, Like those are the sort of silly things that that takes place. So your four hundred podcasts in memory, old guest, one that really comes to that come to the mind. Robert Ahman believe eighty five year old Israeli. He is he

won the Nobel Prize in game theory. Now you already know if you you're out there in the audience, you're saying, my gosh, I can't imagine interviewing an eight five year old Nobel Prize winner in game theory, because the man knows more math than we could ever attempt to know. So I go into this episode and he's kind of

dragging this is over the phone. We get to talking about Switzerland and we're talking a little bit about gun control, and it might have sounded political, but we started he said, well, why why are there fighter jets flying over He goes to vacation in Switzerland in the summer. Why they're fighter jets flying over Switzerland. Now, this is one of the guys with Thomas Shelling, who basically laid out that mutually

assured destruction routine with the Soviets. So they were figuring out the math that you have to have bombers in the air and seven with nukes, so could you could never have get caught unaware a surprise attack forty years we had bombers in the air both sides, forty years with loaded with nukes. But he brings up the point of Switzerland, and it's the idea that you have to

have a credible threat. So, while I don't attempt to get political, it was interesting here is a man who was talking essentially about the idea of arming yourself to protect yourself. Now, if you look at it strictly from a political standpoint in America, that opens up Pandora's box. You have both sides, everyone's arguing. But it's a challenge when you're talking to a man who you know is grounded and that much math. What is what is the

idea of armament? To that man? He's thinking you nobody's it's it's the beautiful mind movie going on while you're interviewing him, right, And he's not talking about whether you can carry automatic weapons or or the or hidden carry rules he's talking about how do you prevent nuclear armaged through a series of decisions that forces everybody to simultaneously arm up and avoid destroying each other, which is a fascinating,

fascinating thought. Douglas Emlyn animal weapons, animal weapons. I don't recall that. Yeah, it came out recently. Basically, he wrote about the idea that the animals that have the the elongated, the larger. They spend so much energy trying to get these things, and they don't survive. They usually die out. The saber tooth cat or whatever, the saber tooth cata barely run. It's sat in the tree and fell on

top of elephants and bit into it. I mean, so it's you know, and he started this through the study of dung beetles. Jack Horner on my podcast, who was the paleontologist, must have got to get him off. He's ever. He's fantastic. He's fantastic. There's a handful of he's building a chick asaurus. I read about that. He's gonna basically do his own Jurassic figured out how to make the tail turn on the wings will go from wings to claus and they've turned. They figured out how to turn

on teeth in the beak. Can you not wait for you will even arm up for this if you have to go get your latte at Starbucks right and you've got to walk down the street in New York City because somebody has re engineered raptors to run wild. This is not exactly related to investing, but these guys fascinate me. So there's a handful of astrophysicists I'm trying to get on the program as well, because that area of how rapidly that's been changing over the past five years is

quite fascinating. And what what I find intriguing about that, Look, everything is epistemology. To me, everything is the study of knowledge, the theory of how we learn and more importantly, and this is a part that everybody in finance needs to pay attention to. How we make mistakes and how we subsequently learn from those eras mistakes. To quote um Thomas Ede of Edison, failure is just bringing me that much closer to success. And that sort of philosophy is really

quite amazing. And I see consistently among some of the most successful people I've had on the show. You know, we're talking about traders, some of the newer trend following traders today, physics backgrounds huge, John Felip Buchow CFM out of Paris. You and Kirk can Tap out of London. David Harding went and out of London. These guys all have physics backgrounds. Now their systems ultimately might be fairly simple. There's a great book out right now called Simple Rules

by Kathleen Eisenheart. So you want to have simple rules, but the thinking behind it extreme complexity. And you know, when you look at the ability of physics to land a craft on a moving comment right where we know very specifically, here's what the math is behind it, here's what the result of each subsequent action, and all these

complicated and interrelated dynamics. It's not a big surprise that people who have an expertise in that find success in the world of finance because there are many Certainly there are many ways it's different, but they are many, many parallels, and I think people forget that you take physics and throwing a little human psychology and that's a recipe for making When did you hit on trend following for the

first time? You were emailing me, gosh, we're probably emailing together a decade so I began my career as a trader. I quickly figured out that there was a tremendous noticed I was comfortable with a flip. There the tremendous amount of randomness, and how people you know the trader. First of all, they don't give you any training. They take you to the deep end of the pool and push you in and whoever doesn't drown? All right, you guys get a desk and yours will stake you with with

some capital. And essentially, this guy to my right is killing it this month, and the guy on my left is stinking it up, and next month it flips. And I became more fascinated by why different traders were making or losing money than what was going on in my screen. And eventually figured and I had some great months and some terrible months, but eventually figured out that the study of why investors are either more or less successful than

others really took over my my daily focus. And that's how I ended up moving into first research and then strategy and then ultimately asset management. But the progression that that progression comes specifically from why is this guy and that guy who will appear to be doing the same thing, reaching such different levels of attainment and success and inconsistent to boot. Why is it reversing from this month of

that month? And I learned a lot just by watching people, Like I didn't necessarily know what to do, but I quickly figured out what not to do by watching people. And I found myself studying other traders more than I was wanting to stick my face in the screen. And I love trading too much. And I that, by the way, looking for that vein, that was like a sign, all right, it's time to to to enter twelve step program. It was.

It was painful to move from trading to research, but I had just a time, just enough self awareness to know that I enjoyed it too much that I would ever be Do you think I was a junkie? It was like it was like the thrill as opposed to the cold school discipline rules of the most success. I remember going into Bill Dunn's office. Bill Donne is one of the few investors that has a continuous track record going on over forty years. I think it's somewhere between

sixteen and nineteen percent after fees. I mean, come on, that's that's a that's a story and of itself. I remember going to his office for the first time. I believe it was nine, and I walked in. It was in Stuart, Florida, you know, right down there near Palm Beach. And I walked in and there was no one in the waiting room, there was no secretary. There was several magazines that were I looked at them. They were several

years old. There was no one in the office looking at a screen, and they were running billions of dollars. It felt like a c P A office. That experience also, because here you are, you're talking about all the excitement, You're talking about veins and all that kind of stuff. My first experiences were the exact opposite. I was looking at these guys that were treating trading like a law off. It's like a c P A firm, And so I

never had the experience that you're talking about. Well, but it was really clear very quickly that if there, if you're doing this for the thrill, if you're doing this for the buzz, you're doing it for all the wrong reasons, and you need to be cold and bluntless and disciplines and be able to just treat it like a dentist. Off is not treated like you're going to Vegas and it's a party, because it shouldn't be look look good.

Good investing should be boring, and I think really successful trading should be I don't want to say mechanical, but certainly, can you say mechanics. I would say the vast majority look trend following is my world. I would say the vast majority of trend following traders are mechanical. Mechanical, mechanical. In fact, I'm fairly certain you. And Kirk told me on the show that he has an algorithm pick the

picks lunch for the day. That's a little insane, picks love for the fairly certain you, And if I'm wrong, that's amazing. See now, I could never have an algorithm that picks lunch for the day because I have too many lunch choices in and about New York, and I would rather the very swartz part. So let's talk a little bit about that. If that's an issue that I've never had a hard time with. I know a lot of people are paradise you like you like your choice.

I'm an I'm an aberration. You can make a decision, Yeah, I'm well, first of all. So here's where the algorithm comes in. I have some my own internalized rules that you give me a list of eighty things. I don't care what it is. It could be eighty different hot sources, a thousand different restaurants. There is a series of steps you can take, process of elimination. Okay, get rid of these, get rid of those, get rid of these. I want

something with a little of this. And right away that list of ten thousand is now four, and you have to choose from four. So there are ways to deal with that, that that paradox of choice. But I think most people can't don't have a systemic approach to that sort of thing. And and a lot of this comes from just experience where you're confronted with that. You either succumb to that paralysis or develop some methodology of dealing

with it. But I we've had this debate. My favorite example of this is the advantages of a benevolent dictatorship over a democracy. Mostly in summer beach house shares, and you learn that you never ask a room full of people what they want for dinner or what the movie they want to see, because if you do that, you set off a twenty minute debate and you ultimately end up paralyzed. The paradox of choice. The benevolent dictatorship says, hey, I'm going for slice of pizza. Anyone want to join me?

And you make a decision and the crowd comes. If someone else says no, I'd prefer a hamburger, you have to make a split second decision do we start this mic ration or um because if you say that sounds good, let's do that. I just had pizza yesterday. Now someone else wants a hot dog and it's a whole bunch of craziness. So that take that benevolent dictator and expand it geo politically. I currently live and spend the vast majority of my time in Southeast Asia, specifically Saigon, Vietnam. Okay,

benevolent dictator. You might not think that's how you would describe a communist country. I think you could put that term Singapore benevolent dictator, Vietnam benevolent dictator, China benevolent dictator. Look, those guys want the power in those countries, but they let the people get rich, they let the people keep improving, and they make the big decisions. New York City as I walk around for the first time in four years. This city can never be rebuilt in two thousand and fifteen. Never,

people would never allow it to happen. There'd be too many hands in the cookie jar, there's too many environmental This environmental that the benevolent dictator solves those issues. It just takes, for your point even to another step further. We're gonna build this it in. If you don't like it too bad, and if there's a lot of smog and no one could breathe, we'll worry about that later. That seems to be approach, which brings me to the question.

There was probably some smog here though, in the back in the day at one point in time, while you have the e p A pass rules and response to under President Nixon, in response to people really being concerned about health and what have you. But I want to ask you, what makes a kid from Virginia's decide I'm gonna pick up and go to Asia. How did that come about? Well, I was living most of my life in Vienna, Virginia, uh two thousand eight, working on this film.

When you were kind enough to appear in my film, I I knew I moved to San Diego, and I was living in San Diego. I started this podcast, and actually starting the podcast got me to Asia because I started doing yoga in two thousand and twelve and a guy listening to my podcasts said, Hey, I really like yoga. My friend of mine. A friend of mine runs the c l s A office and U c ls A Hong Kong brokerage firm runs the c l A c

l s A office in Tokyo. When you come speak, I had done a gig for them before I said sure. They called me up. They said, let's let's have you over. At that moment, I he said, well, let's book the ticket for you. And I said, well, so where are you flying from? And I said, well, I'm gonna already be in Asia. I wasn't already going to be in Asia.

I just said this at that moment. He then said to me, Hey, would you like to speak for us in Beijing, Shanghai, Guangzhou, shan Jen, Kuala Lumpur, Singapore in Hong Kong. I said, and we'll pay you the same for each each day over four months. And I said, oh, thank you, twist marm. Yes, we've got a deal. A paid trip seeing all of the best of Asia. Yes,

so that had to be a fascinating Yeah. By four first four months of two thousand thirteen, and my last stop, I was doing this around the world fair and first class on United or something, and I my last stop was Bali. And I was in Bali and I was like, Okay, I'm not going back to San Diego. I'm gonna live in Asia. But I can't stand Bali after two weeks, and I said to myself, where did I have the most fun over the last four months? And it was Saigon, Vietnam,

now known as Ho Chi Min's City. And so communists, wasn't that what originally known as Hochi originally not originally known as Saigon renamed Hochi Min City after we left in seventy five? And so you you've been there for two years now, is that right? Two thousand, half of thirteen, all of fourteen or fifteen on three years? How do you find it? How do you find the people they are given our little adventure there in the sixties and seventies, How is an American abroad treated in Saigon slash Ho

Chi Min City? Fantastic? I've never i have never had anybody bring up the war with me, really, not one, not one. And just for numbers, people can wrap their arms around this. Most of us in America, no, since I my family lives about fifteen miles outside Washington, d C. Most of us know that about sixty Americans died during the Vietnamese War. Less but yeah, that's that's the number. Uh some and the Vietnamese. The Vietnamese number is somewhere

between three point five and five million. It's an amazing So you get over there and you're like, whoa. It really forces you. And of course then you have the whole come to Jesus, like why were we even here? Because look, we thought that, you know, there's this Domino theory, and apparently nobody in the State Department bothered to understand

that the Vietnamese hate the Chinese. The Vietnamese didn't really like the Russians, and they just wanted their own damn country after being dominated for a thousand years by the Chinese, the French, and the Americans. And so somehow another we decided that was gonna be the Domino theory. And it was a huge mistake. You know, it's fascinating for people who aren't familiar with Asia. The different cultural groups of different countries and their long history. It's no different than Europe.

We just look at them in a different perspective. Japan, Korea, China, Vietnam. There's a long history of life, the Philippines of different parts of that world, disliking and engaging in warfare. Everybody seems to have have had a fight with the Japanese at one point in time. Uh. In Asia, it's really quite fascinating, but it's not all that different from what took place in Europe or what took place, you know, on on this half of the world. So, so you end up in Saigon, cost of living has got to

be next to nothing there. It's not bad. I'm I I stay at a pretty cool place. It's uh, it's not bad. It's not New York City, for sure. It's not Tokyo. I was just in Tokyo. Love Tokyo. But you know, it's not even the cost of living. It's there's a there's a cowboy feel. It's the it's the wild West of capitalists, West of capitalism. I mean, it's just everything's under construction that the Japanese are building their first metro there. I just you know, there's a million motorbikes.

I mean, right now, I have I could. I'm looking out of this Bloomberg facility, and I can imagine if I was to walk out here in Saigon, there could be two of motorbikes going in different directions. And as an American, I would have absolutely no problem walking straight out into the middle of it and not even blinking, because I know how they think and how how do they think? It's very zen and it's Buddhists trying to kill you. There's trying to get somewhere, you know, So hey,

I want to wait, wait, Vietnam is Buddhist. They didn't realize that. Yeah, that's quite fascinating. So you're about to say I was about to say, you know, on this this little excursion, I told you about this four month tour that got me to Asia. One of the fascinating things about that was it was four months of speaking to the biggest funds in Asia. So when I was in China, I was speaking to China Asset Management, which

is their largest sovereign wealth phone. When I was in Singapore, g I see their sovereign wealth fund and just to share some fun stories about how things go down in different parts of the world. So I'm presenting a trend following presentation to a group of people at China Asset Management. This is the largest fund in the country, so there's twenty five You have to assume the smartest people in

the country at one point four billion. You know, they've gone through who knows how many tests to get to that room. And I give this presentation. There's a translator. I talked for a sentence translated. At the end of it, I say, Hey, any questions. The lead guy very first question, perfect English, room, perfect English, Perfect English. And then they immediately got so excited because they were like, oh my gosh.

So this trader we all know about in China who has made billions of dollars, and what he does is he buys right before the market goes limit up. And so they all China, of all the countries that I've been to, instinctively understands momentum and trend. It's in their blood because they do go back trust the fundamentals. They don't trust the fundamentals. They've learned not to believe. They don't believe anything in the fundamentals. The only thing they

believe is the momentum. That's funny because you think the Japanese, we've had candlestick charting for centuries. You would think they would be the ones that would be more likely to uh to, to buy into that sort of stuff. I find it's just the opposite. I find every time I'm in Tokyo. Everyone's super nice, but their interest level is kind of like a you know, it's like a pulse, that's this flatline. Huh. The Chinese, the Chinese when it comes to you know, bitcoin betting, it's I mean, look,

I was in an event in Beijing in June. Uh. Most of the men will work and then the women will go to financial conferences. So it's six women ages forty to seventy. The excitement level to sit there and talk about technical trend following off the charts? Well, isn't it true that over a thousand it was crazy? That? Isn't it true that the I forgot the Chinese word for housewives? Are who are have been opening all these brokerage accounts in China and leveraging up and day trading.

And that's why even after a four percent drop in the Shanghai Index year to date, or at least this is true as of August or September, was still like marginally positive that they have had such a spectacular run for the past few years. That whack is really just seems to be a minor setback to UH to the

day traders in China. I'll share I'll share another one with you, so that during that period I spoke with the Sovereign Wealth Fund in Singapore and so here I am at this very nice offices it's called G I C and three people there are three key people and give a presentation on trend following. And the first guy immediately says, ah, we can't do any of this. This week were value guys, were fundamental guys. We can't do

any of this. This is just not us. And over there on the other side was one of the three main guys contemplating, and then he bursts out and he says, oh, man, we can't keep doing this stuff. It's not working. We just read the condom in book. None of this is We've got to do some other stuff. So it's interesting to see, even at the highest re chees UH about you know, one of the wealthiest countries in the world, the desire to hold on and the desire to or

the need to break away and do something different. That's amazing. You would think that these are just people in different slots, and it doesn't matter whether it's a Chinese sovereign wealth fund or a day trading housewife in China. It's still a human being making decisions, and whether it's successful or not is what motivates them to Let's try something else, maybe that'll work. Every place is different, every every speaking in Hong Kong. Uh, nobody in Hong Kong is interested

in the subject of trend following. It's just ex pat white guys that know everything both they don't want to know anything else. It's funny. So but I find so why is that? Are they successful enough on their own that they don't feel the need to keep growing or is it just arrogance? All right? Well that that's not a big shakra. And and are these former Brits what sort of what sort of background are these people? So a little opera class British and hubrists. Chinese aren't like that.

The Chinese just want to win, right, you know? And look and the other thing is too, is it? I find every time that I've been in mainland China. The reception and the warmth is off the charts really, So you know, we have this, we have the media and the States talking about a war and this and that, and every time I go there, they treat me like royalty. They're so nice. They want to engage, they want to talk. You know, they're not happy about the Japanese. They're free

to tell you that. Nobody, nobody in Asia seems to be happy about the Japanese. No, the Vietnamese love the Japanese. Really, why is that? I think, Well, the Japanese been huge investors in Vietnam, so the Singaporeans and the and the Japanese invest huge in Vietnam. I wonder why that is just an opportunity. Or ninety million people, forty five million of them are under the age of thirty. That means forty five million people were born after the war. So

they don't care. They're all young people that just want to get ahead. It's you know, look, it doesn't make a difference where we're at. But the real issue when I travel the world and seeing Asian it passed along some insights. Demographics. Look at the demographics Japan. The demographist' terrible. Yeah, everyone's old everyone in Vietnam, and Vietnam is like going

to a party. And what's going on with China? Now that they've overturned the the one child or family rule, are they going to run into the same issue where they don't have enough young people and they're gonna have a bunch of aging single people. And I think that's why they did it. Yeah, one would expect. So what what what's your read of of the demographics in China? Or is it just so big and so vast and

so varied you can't draw any single conclusion exactly. It's it's it's a it's a it's a really big ship. What about Korea? Pass something along about interesting about China? Though? When I presented there in Beijing of this year, I guess it was over in front of about a thousand people, and the translation was really rough. The translation was not good. How do you know? Well, the crowd started getting restless. I'm in front of a thousand people. Okay, I mean,

do you speak Man's No, I don't speak anything. So the translation I speak for thirty seconds, there is a translation. The audience starts getting restless. All of a sudden, they start talking. People talking at once, right, so I can't hear myself, so we we had to stop the It was basically a mutiny the audiences. The audience decided that the translators were so bad. They then commandeer and found people in the audience from Malaysia spoke English, English and

Mandarin who had read my books. Brought the guy up out of the audience and he translated for the rest of the event. It made me realize about China, that the that the the leaders of China have to give that crowd what they want or they have some real trouble facing that way. And I think they're doing a pretty good job of that. I mean, anyone's been a Shanghai, you know. I mean, Hong Kong continues to do well, but Shanghai is the real jewel. So and I mean,

what is there. I don't know how many cities there are in China with over a population one million, it's huge. So, you know, the big challenge China faced where they had all these billion seven coming up on two billion people with half of the country is still living on the farm. Have they successfully moved people into the cities or is

that still work in progress? I took the bullet train from Shanghai to Beijing, which is about the same distance from Washington, d C. To Orlando, and the entire way was construction cranes and condos. Whether they've moved everyone into those or not, I don't know. That's the direction it's going. How long did that trip take that That would have been the equivalent of eight hours here in the States, about the same distance as the Exceller from New York

to d C. So three hours here or four hours. Yeah, so they're going quick. They've actually got bullet trains. What we have I'm not really sure. No, we have a routing infrastructure and of government, the benevolent, the benevolent dictators on infrastructure. Uh, you know, it helps to say to say the least. It helps to say the absolute least. Um Korea. That's the one place you haven't mentioned. Did you make your way over the Soul? I have not into Korea yet. I've not been to Korea, and I

have to make it. My first trip I want to go in the new year is Miamar Burma. Yep. That's the only thing I know about. Burma is down by mc Sorley's that used to be a Burmese restaurant that was quite fantastic twenty years ago. I don't I don't know if it's still there. Uh. Speaking of food and the paradox of choice, Singapore is supposed to be the food capital of Asia. Tokyo, Tokyo more Michelin Star restaurants

in Tokyo that anywhere else in the world. Oh really, Yeah, Singapore is supposed to basically be the crossroads of Asian. You could get any type of Asian. I have some fantastic Singaporean friends. I love them to death. If I've given a choice of food, I'm gonna go right alongside Bourdaine and we're gonna go to Tokyo. By the way, he's someone who's on my list to uh to get on the show. I've had Bobby Flay, who was fascinating

guy real New York and we left. We took the subway downtown and as we're walking down the street, people like, oh my god, it's Bobby Flay and he's like nods and we get in the subway. Like talk about in New Yorker Boor Dane is really a fascinating character. Um, he would he would be really interesting you in the choice on food, I should add I could go through the rest of my life with somebody else choosing for me. Really, yeah, that's amazing. Why not control? It's control thing it's to

think about. Think about living in a place like Vietnam where you don't know most of the menu, you can't read it. They have pictures on the menus. Can you point this, this, and this a little and you don't speak vietnames at all? You get by with English without right a little bit, a little bit. You speak very little bit, very little. If you had to not speak try deep thang right, left, straight ahead. But but how how fluent are you? If you couldn't use English? You'd

be in trouble there. You bring up a good point. Generally, I see this in Tokyo. Now, to English is really permeating. It's it's permating because look, it's the business language. And I'm not being a cocky American or listen, it's arrogant. It's not not us. The Brits are the one who who made English the English England. The English are the ones who made English the global language, not us ugly Americans. You know, the old joke is two people separated by

a common language. Let me give one tip to your audience. I don't think this tip has been given yet on your show. If you want to take an interesting vacation, just go to Saigon. Trust me, go to Saigon. Don't go to Thailand, don't go to Singapore, don't go to Tokyo. I mean, you can go to all those places, they're all fine, but go to the place that's off the beaten track. You will be shocked. My parents just came back. I don't think my father is gonna stop talking about

Vietnam until the day died. Really, he's in love with it. It's it's it's probably my favorite food in the world, Vietnamese. It's what's amazing about New York, which has every fantastic restaurant you can find. It's much harder to find a good Vietnamese restaurant here. Then, say, if you go to San Francisco or even Montreal, you can can't walk a block without in Quebeca, Montreal without finding a bun Me shop.

And if you go to San Francisco, there's some fantastic Vietnamese, few and far between on the East Coast, and and I'm surprised given sushi and a million varieties of different other Asian cuisines. From Korean. There's a huge Korean town in in Down on thirty second Street in Broadway. That's that's a fast NAT off the island. Barry, what the off island of Manhattan. I'm I'm I'm in this general region, but I travel around the country pretty regularly for work.

I would. I have not done Asia, and that's something I really want to put some time in. Stop into Tokyo in the twelve to fourteen hours, six more hours to Southeast Asia. You can cover Bangkoks Singapore. I had city, I had an event It's calling you supposed to speak at a couple of years ago, and then some international thing happened in the event gat Camp consult So um, I need to get over there. It's certainly on my shortlist of places to go. You brought something up a

side ago that I want to circle back to. You were talking about we're talking about risk essentially. One of the things I find really fascinating about the world that I'm in is I shift out of Vietnamese food is draw down. And when I had Ben Carlson of your firm on my show, we talked about this We specifically talked about Warren Buffett because in my world, the trend following world, it's not unusual to have your capital go

down a significant amount. I mean, look, if you're if you're trying to jump on a trend and you can't predict the trends direction and you've got to take a bite of the apple and you lose, those little losses can add up, right. So Bended pointed something out in his book about the number of down moves that Buffett had taken in the last years. I think it was five and two of those, we're minus fift Buffet in

the last twenty five years. That that right there, amazing for people that don't understand trading, or even people that do understand trading. The Warren Buffets allowing himself to take five plus drawtowns a lot of wisdom in that statement and that bit of evidence to break apart for sure. So one of the columns I had done for the Washington Post was it last summer was looking at Apple and saying, people talk about Apple up seven thousand percent

over the past thirty years. And now he's laughed whenever anyone says I wish I could I could have brought Apple way back when my answer is why, what makes you think you would have held it through the number of forget thirty or fifty row bounds? How about the downs they've had repeatedly throughout their history. You would not have anybody who tells me if only I held Apple over the past thirty unless you put in a draw and forgot you had it, you would not have rode Apple.

Think think about the near death experience in the late nineties, think about the seventy rash in the in the mid two thousand's, think about the most recent drop. It's one of those things that people just can't live through. I'm trying to find you a pick right now that you I know, given that you're an Apple guy, I'm a Mac fanboy since my classic in nine. Really, so hold on, it goes back to nine. Just keep keep talking. How to find this picture for you? Or the heck? Is it?

You will? You will be just you? And Steve Jobs, is that what you're gonna show me? Come on, man, you and was very nice Saigon Airport. Oh really, he looks genuinely happy to Usually you take a selfie with a guy like that and they're they're rolling their eyes at that. Come. I look, I'm like you, I have to ask a lot of interesting people to come on a podcast, so you've got to do the approach right get So I'm yeah, I'm sitting there minding my own business.

This guy taps me on the shoulder. I'm sitting with my parents. Guy taps him in the shoulder. I got my cell phone plugged in behind me, says, hey, can I share it? Can I plug my splitter in and share your power? And in that quarter second, I looked at his face and I said, sure, as long as you give me a selfie and he said yes, Oh that's great. So I know I only have you for a certain amount of time, and I want to get to some of my favorite questions. What's our hard stop

on the recording today? At alright, So so we are down to our last half hour. I have my eight favorite questions. I'll come back to them in about ten minutes. I want to stick with some of the things we've been talking about. We discussed Asia. I have to ask you about Broke the New American Dream. What motivated you a trading guy to make a movie about pre financial crisis? About what was going on in the housing market and

the huge shifts in in American economic demographics. So a budget was put together and there was going to be a reality show on the Turtles. Huh. Then at the process of doing my Turtle book, a lot of the Turtles started throwing, uh, look, this was a secretive thing.

People didn't want this out. So I got a I got a few legal a few legal notices here and there, and not today, but back in the day there was there was a concern, and so we shifted on a dime and I had I had hired a director and we were gonna do a retrospective on the dot com bubble. And she said, Michael, I want to do a story on a guy that started with nothing, went to a billion and lost it all. And I said, well, that's great. We don't have that person. And she said, well, I

know someone that that that happened to. And I said, oh, really who. I looked up the guy's name and he was an heir to the Nestley family fortune. And I said, well, I can't use this guy. It's not gonna work. And she said, Michael, don't worry about it. The audience will believe anything we tell them to believe, and I said, okay, you're fired. So long story short, long story short, um I ended up becoming the director, and it was meant to be a trend following picture. That's where there's so

many trend following traders in it. And as we were filming it, we were stumbling into the crisis. So the crisis. So it wasn't planned, and I wasn't really trying to make any kind of a fundamental statement other than, look what can happen when you lever up and you really don't think about bubbles? So that was really the premise. It wasn't I wasn't trying to make any grand statement about you know, where things can go. Of course, in the middle of it, I took some shots at things

like state lotteries, which are a boondoggle. But can I tell you that's one of my many pet peeves in in I forgot what piece I had written this in not too long ago. Do you realize that across the country, state lottos make more money then all of professional sports, all of movies, all of music, all of books an Apple app store combined. I think the stats and I'm gonna try and go from memory five of the p bull that play the lottery, I think it's their best

chance for making a half million dollars for retirement. That's insane. It's sad because it's and it's mostly people who really can't afford the most. And what's and what's sad about it is like if we had to really make a moral type statement, no one's gonna care, no one's gonna

do anything, the country is too big, whatever. But it really is something where the government is truly abusing the disadvantaged class for abusing the look Mark Twain called gambling attack on the stupid, and this is your taxing the poorest, least capable people of of paying this bill. It's it's awful. So from that from gambling, how did you see the parallels too? You know the stripper with six houses and other people speculating, and that was just add a little color.

But and all the flip bears the poker though the poker was the real thing. The poker was, you know, getting the poker players in the film because that has so many people talking about poker, whether it was the trend following traders or at the time Bill Miller and Michael Mobus down there like Mason. I know he's Mike, Mike's moved Yeah, yeah so, but also a guest on the show and he's been on your you know, just a side tangent note. Did you read the last read

more than you know? The book after the Skill and Um what is the name of it? I could punch it up. It's it's a look at at skill and luck in business, sports and investment. Yeah, you know, success equation. Listen. You know what what's great about what Michael did? Michael really made it I don't want to say fashionable, that sounds trite, but he made it very acceptable to take all these disparate disciplines and use them to make a point in investing. He was doing that in the late nineties. Yeah,

his stuff is fascinating. Again, you could, by the way, you could pull I don't know if it's still on the leg Mason side, but it used to be all of his quarterly missives, which are eight page works of I have him from his before, like Mason when he was at Credit Swiss before, because he came back to Credit Swiss now, so I've got all of his old ones from the nineties. There really are that that's a book in and of itself, someone someone to tell him to uh, to crank that out. So you put out

the the movie. What did you learn from the experience of doing it and and what did you learn from um the actual I learned, don't submit your film to Sundance in September of oh eight because I was the deadline September eight, mid mid September of eight was I had to submit the film to Sundance, So you know, of course, and I think that the thing that I really learned is that you need to have time. So if there's going to be a big event, you really

can't be first. You needn't have time for people to settle on it. Even though I thought my message was important for people to really think about the bubbles and whatnot and how to how to prepare, it was too early. And I think also I wasn't blaming anybody except the end user. I was blaming us. I didn't blame you know, all these boogeyman up here on Wall Street and you know, yeah, I didn't blame Dick follow. I mean, look, the FED is done what they've done. But ultimately we're the people.

We do it, you know, we've we vote for it. We support it. I know there's there's guys behind the curtain up here in OZ and stuff like that, but you know, ultimately we all wanted to get rich. We all had no problem getting a million dollar mortgage from WAMO in two thousand and three with no no docks down.

So I'll never have told this story so many times that the first house I owned, we bought and I want to say two thousand and two thousand one, not counting apartments in the city, first free standing house in suburbia, and we had done a refine oh five. Absolutely true story. And this was back in the day when the bank would come to your house. Guy pulls into a driveway, flings the door open to his car, leaves the engine running, runs in with some papers, really apologetic. I'm really sorry.

I a closing on a new sale a few blocks from here, signed sign initial initial his check for thirty Now is that your cash outrefly? Thank you so much. I gotta go and he he was in and out in two minutes. And as he leaves the driveway, I say to my wife, this this is a bad thing. Some something like it started me looking at how insane has housing become, and I had been looking at that space for a while, but that experience was so surreal compared to the most recent house we bought a year ago.

Was the polar opposite. All Right, we need a uh, I need a pint of blood, we need some hair samples, a little d n A. Alright, we'll be checking your stool sample every month for a year, just to make sure that you can can repay this. It was. It was insane. It was good column fodder, but it was absolutely insane this go round, the last one. We looked at each other and just like, okay, let's read do the kitchen. It was. It was that simple and and

that crazy. Um what did you learn? Not so much about the subject matter of finance, but what did you learn about the Um? Oh, we have plenty of time. I'm afraid we're gonna run out of time for our questions. What did you learn about the process of making a film? Would you ever make a film again? Or a television show? Are you interested in that in the least if I don't have to finance any of it, right, well, that's a given. Um. If I don't have to finance any of it, and you know, I found in making a

film there's two types of staff. There's really the people that will come along and work their butt off and they really want to make creative magic, and then there's the other people that just want to paycheck. So there's a whole I think it's of the film world is like just kind of you know, they know there's these budgets and they're gonna get a paycheck, and they're really

like half isn't that true? And everything every endeavor there are people who do it for the love of the job, and there are people who work for the love of the paycheck. It's fun. Art is fun. We're gonna We're gonna of course, we're gonna die. We're all gonna die. Make art. Whether it's a book, whether it's a podcast, whether it's a trading system. I don't care. Make art. You're gonna die. We're all gonna die. Make art. Mike Covil, uh that that's your philosophy of life summed up in

in one's It's true. So we're all gonna die. Make art. But I think a lot of people don't think they're gonna die, so they don't do anything. Who doesn't think they're gonna die. I'm really curious about you know, normally, I'm I'm making these arguments as to why you have to look at the data and why you need to make sure you're fact based and logical and and don't have some glaring blind spots blind um spots that you're

you're unaware of where you're making errors. But when someone's fundamental premise of life is clearly false, how do you respond to people who have no interest in that sort of stuff? I tell them there's a great video on YouTube with Christopher Hitchens, Dan Dennett, Sam Harris, the whole the whole debate. So if anybody wants to really argue with me, I said, you know what, there's four guys on YouTube. They're much smarter than me, and they talked

for about two hours at a round table. Give that a shot, and they come back to me when you're after after watching that, you probably if you you're either gonna like me, you're gonna hate me one or the other. That that's pretty pretty hilarious. Before we get to our eight favorite questions, Um, what else have you been looking at focusing on noticing that you think is intriguing? Especially what have you learned from your time in Asia? That you wouldn't have learned if you were here in the

United States. America feels old. Feels old in what way? The demographics, the infrastructure, the the entire society. What is it about America that's old? Everything you just said? And then I think also the people, the people and not just a physical old, but a an old. We're not belief system venturous anymore. I mean some of us are. Some of us are. Look, you have Silicon Valley. I'm gonna push back on you. We do have Millennials are everywhere,

They're everywhere. What they're doing, they're taking over. The millennials are now a bigger voting block than the baby boom. Well that's a voting really matters anymore. Well, you know, you get to choose which one of these two it's column Ato Columby. You don't really get to choose. You get to choose from a pre selected course. But that said, Silicon Valley does exceptional things. But overall, there is a feeling. If you want me to compare and contrast, there's this energy,

there's this excitement, there's this desire. Maybe it's misplaced, maybe it won't get where they want to go, but you can feel it even in a Tokyo still. And I know Tokyo is a big city and maybe the outer areas aren't doing as well, but that energy and enthusiasm and all the things that you may for example, infrastructure when you see so many infrastructure projects getting off the ground.

And I'll tell you one of my damn pet peeves airlines, specifically the staff on an airline in the United States that's uniformly terrible. I'll give you three exceptions. Virgin, which is British Jet Blue, which is essentially the real exception in Southwest. Those two are the non um traditional airlines. They're they're not the legacy airlines with all of the UH union um baggage and all of the historical baggage. Outside of those, I've found that most airlines staff in

the United States States not especially accommodated. And it's completely different. And not only do you have something uh people might say, well, this is not really relevant. Appearance is clearly an issue on airlines. Oh god, have you have a flown air India. It's unbelievable. And people say Singapore Airlines is supposed to be fed plastic. Singapore is great a and a Japan fantastic. Even Vietnam Airline is fantastic. Now is it much more expensive?

Are they? Are the fairs regulated the way they used to be in the United States? What's the difference. We haven't talked to charts today, Not that I'm a chart guy or anything, but if we look at some of those charts, and everyone can imagine what the charts look like. Just imagine what the US dollar looks like on a chart, and then imagine if you're straight up for nine years, if you're another part of the if you'r other parts

of the world, that's a good thing to be. So in other words, a strong the strong dollar is good for for people in Asia, is good for people elsewhere around the It's good for Americans in Asia, well, if you're if you're a tourist, if you're an export, or not so much in the United States. Um, And what's fascinating is if you're an exporter in China and the juan is is is peg to the dollar, the strong dollar isn't the greatest thing in the world for exports

other than to the United States. Elsewhere it makes you good, it's a little more expensive. So, um, what else do you see as a change that you noticed only because you've spent so much time in Asia, a bath, the United States, or or anything else. So commerce, I mean, for example, look in clearly the registration requirements, the ability to launch a restaurant, launch a store. Singapore is highly regulated,

but in many past you can't even choose. Of course, Bangkok though, and Hong Kong and Ho Chum in City, Saigon, uh, you know, places like Shanghai, you can get something started, you can find out what the demand is and if it doesn't work. I can't tell you how many times I passed a store and Saigon was like, that store looks kind of dead. I wonder how long they're gonna make it, and they're gone in a month. I mean,

so people just try. There's this look. I still remember the first time three years ago, I'm walking the streets with this this young lady and I looked at it and I said, where are all communists? And she didn't get the joke because everything I saw was selling commerce, commerce, And that's it's not even a the government style of Vietnam and China's communists. The people are Asian, the people are merchants, and that is that's pure trade and you're

seeing less of that in the United States. I mean, you know, there's some nice stores out here. I see people selling high end goods. I see the Apple Store and that kind of stuff, But I don't see the ability for the average person to go jump at it really quickly. Well not you're not going to open a storefront on Fifth Avenue if you're a one man shop selling widgets that you make in your basement, saying this is good or bad. Let the market decide. We've gotten

a little overregulated on some of these things. I know we're trying to protect everybody. I know we're trying to make everything fair, but we all know that what's all said and done, no one's protected. It ain't fair. S Yeah, I've always found that to be a little bit of a red herring, only because we have um absolutely you know, we launched a sm management shop. It didn't take that

much time, effort of money to do. If you want to build a restaurant or open a restaurant, all these things take capital and if you have to jump through a few regulatory hoops, it's not the worst thing in the world. Your audience listening right now that knows you've not been to Asia knows that when you come in two thousand and six, that all right. In the last ten minutes we have, let's work through our ten favorite questions. Uh, you already asked the first one about how your background

led you to finance. Let's go to the second one. Who were your early mentors? I mentioned Jim Massey and Solomon Brothers because when he told me you don't want to be the best, you just want to win. That forces you, as a young man, you realize, Okay, I've got diarrhea of the mouth, I'm just talking. And that forces you to realize, this is a game you play to win. This isn't it, This isn't This is no longer kumbae ya. Everyone gets a trophy. This is playing

for keeps and that and that instant changed me. I didn't really have much more involvement after that with him. He did get me an interview at Solomon Brothers in nineteen nine four during the Bondmarket massacre, which really didn't help much, But uh, that was that was a change. So did you decide that you wanted to be the best or did you just sign that you wanted to win the best? Is some nebulous, who knows what best means?

That doesn't mean anything, right. You want to win, however, you're going to measure winning at least you gotta be able to measure it in some way. Kind of interesting and Bill Done too, Bill Done, the trader that I mentioned with a forty year track record, seeing him in person, and I remember this is South Florida, Yeah, South Florida. And it was a crazy, a crazy small world story where my baseball coach when I was sixteen ended up in today he's the president of Dunk Capital. I don't

know how that even happened, crazy small world story. But when he got me an informational interview with Bill Done in, I remember he Bill Done call me up on the phone. He knew I was coming down, and he said, so, do you want to come down here and press me? And I remember being a little bit scared because I knew I was talking to a guy worth hundreds of

millions of dollars, he's managing billions. But I saw it within him too, was again that Jim Massey, that attitude that I'm you know, just this tough atted is former marine for marine physicists, but that those things instilled in me, even if it wasn't my personality to show those to other people, Deep in my gut, deep in my mind, I knew those were changing me. Huh, that's quite fascinating. Next question, Um, so you you mentioned a couple of mentors.

What other investors influenced your approach to investing? Obviously Richard Dennis Key guy who else influenced the way you think about deploying capital at risk? You know, there's a whole team of people that we've talked about today, but I'll bring up somebody that I've mentioned briefly, which is David Harding of Winding Capital. And David is probably considered today

the most successful trend following Trader. His fund is around thirty billion dollars to in n it was five million, I believe, so he took five million up to thirty billion or Some of this is obviously, of course inflows, but but still it's a it's a tremendous success. He had one stretch of twenty years after fees and the first time I met him, I was in his office in London, and to watch his competitiveness struck me because he wanted to talk about Jim Simmons and I didn't

say I don't. I said, I don't know much about Jim Simmons right now. He's in my white well. I have Dalya and Jim side. I don't, I said, I don't have any I don't have any experience with him. And you know, Harding was making the case that for somebody to do as well as Simmons had did and

has done, that there had to be a trend following component. Now, what's interesting if you list Simon's If you listen to Simon's though everything he says publicly, and I've listened almost everything he said publicly, there's not much sounds like a trend following trader if and until and when some type of subject on the short term comes up. So I

just thought it was an interesting conversation. One of my first conversations with David Harding that as a man who was very firmly in the asset management space, the competitiveness that which he had to look at his peers, so that that affected me to just it shows you behind the curtain. You know how these guys are thinking, you know how the best in the world are thinking. And whether or not you use that experience or not. You

now know how the game is played. That's fascinating. I look at Simon's is such a different approach then trend following. I'm surprised to hear a successful trend follower sort of of you know that that becomes his moby dick at that point. Okay, but here's so, here's the thing, do you does anybody really know exactly what renaissance does? We

know some of it. We know that there's a lot of They were an early adopter of high frequency trading that he essentially was hiring mathematicians and physicists twenty years ago, but he was never hiring people from Wall Street. Everything he built was strictly from And my contact with him is when I started at Stony Brook as an undergrad. I was applied physics and applied mathematics and physics major.

He was the outgoing chairman of the math department. And by the way, if you would have met him in nineteen seventy nine when I started college, you would have said, wait, that chain smoking, bearded guy. I'm not going to give him two cents. He would never earn a million years. I think this is gonna got the guy that's going to mass a forty year on near annual track record. It's it's insane. You know they're real because they returned after a few years, returned the outside investors money and

said we're good women. And just one of the things that really triggered me early on. And I'm just thinking about Simon's and his track record. With trend following traders being regulated by the CFTC, the n f A, you could always do a foiler request and get their disclosure documents. So for me earlier, do they really reveal a whole lot in the documents? What what is your their monthly performance?

Oh so you're actually getting those numbers? Yeah, yeah, yeah, so I mean you can look at I mean, that's that was the foundation for all of my books. I couldn't write about trend following unless I had the performance that said, okay, look look at the correlation between Bill Done,

John Henry, David Harding, the Turtles, Larry Height. And when you start to look at the correlation performance and you're like, oh, all these different people, different walks of life, different training, unaffiliated are making money in the same months and losing money in the same months. They're obviously doing something and then you can. Then you can look at the markets. You can realize, oh yeah, crew just moved big that month, and you know what's going on. Huh. That's that's interesting.

In outside of your own books, what are some of your favorite books written by other people? I love Blue Ocean Strategy, Blue Ocean Strategy. Yeah, you know that one. I think, Yeah, I don't. Yeah, it's just, you know, to sum it up, it's steering clear of Look, we're in this facility right now where everyone is seeing the same thing. So how do how does one go ahead and find a different place to be? I mean that

sums up Blue Ocean Strategy. And I know one that you would hate for me to say, go ahead, but I tell you, I do love it. I still love the the the energy and the thought process, the thinking of the main character in The fountain Head. It's not that I hate iron Rand. I just found her to be pedantic and boring. I mean, oh yeah, of course that was sru there's a nightmare, so it's not Listen,

she comes from the Soviet Union, what a shocker. She's against totalitarianism and and champions the the genius of of the individual. That's not a surprise, but it shouldn't take eight pages. That's the old joke is I apologize for the lengthless letter. I didn't have time to make it shorter. She never learned that. Seth Godin's lynch Pen a simple book. The first thirty pages. If you if you know a young person or anybody that's confused about their career, what

they want to do in life. He's one of these guys that basically says, you know what, You've got all the tools you need. You've got the internet, Go make some art, go do something. Chris Van who's the head of planning in my office, is an absolute goden acolyte loves him. Yeah, it's great stuff. Lynch Pin is the name of the book. And you google google my name. I know I've got a couple recommended book lists out there.

If you just type in my name and give me one more, one more book that you are are really in true buck. I like the Dan Eily stuff. I like the thing. I like the thinking fast, thinking slow. That by the way, I like the first three quarters of that book. Is is fantastic. Michael Mobison more than you know. Um Doug Emlyn's Animal Weapons, which I've mentioned. Animal Weapons is a really interesting concept. I have to put that in like, yeah, it's he has started with

a study of dung beetles. Just really uh fascinating stuff. I don't you know these things. The list goes on forever. The other thing of the old stuff that I really like, ah, one of my favorite authors think it's called The Wisdom of Insecurity by Alan Watts, who introduced Buddhism and Zen to the to the Western world back in the fifties. And in fact, if you google Alan Watts, go to YouTube, much of the stuff that he has on YouTube is

just absolutely fabulous. Just calm you down, because look and look, if you're gonna be a traitor, you're gonna be an investor. If there's any one type of thinking that's just really nice for trading and investing is a Zen mindset, to say the least, it's great. So let's let's continue on our Zen list. So since you started writing about trading and writing about trend following, what major changes has hit the futures industry? All these blow ups, right, all these

sort of blow ups, those don't help confidence. So I think that's that's that's the biggest thing. And I think also for example, in the trend following space. If you look at the last since the biggest I mean two thousand and four team is a pretty good year because of the oil moved down. But if you look at uh, two thousand and eight was the last really fantastic year and then a lot of kind of ups and downs. Look, as a trend following trader, you can't control these ups

and downs. So I think, what's gonna be interesting to see as we watch interest rates change, as we watch you know, we have another ten years of equity markets just marching up. I don't know who knows who could? You could and if that would be good, Any of these things in the trend would be good for there, you've got it. You've got it. It depends though, if you've got a diversified portfolio, you've got to take positions in some markets that might be going different than equities.

You might get stopped out. So you can't just be a trend following trader on one market, which if you wanted to sum up one of the issues that we talked about two is the death cross. Uh, the whole death cross. I agree with your analysis on it. I think the thing that Jerry Parker one of the turtles was saying was yes, but the death cross can be the initial signal for a trend that might develop. It's not a forecast that never works. And I agree with

your analysis on that. Well, we want you know, it's one of these things you hear about over and over again and then you go out and look at the numbers and what's the subsequent track record of this? Turns out it's terrible. But but but if you if you had a death cross and a diversified portfolio and it was your signal for entry with a stop loss, that's different than all the technical walks out there that say, oh, here's the death cross. This means six months from now,

this is gonna happen. That's all last two questions, and these are my two favorites. What advice would you give to a millennial or someone who just got out of college who was interested in the career in finance. You gotta do it yourself. Gotta do it yourself. Yeah, no safe spaces and do it yourself. And now our final question, because I see they're ready to kick the door down, do it yourself in the sense of like, don't try and get hired by anybody that's over. I think that's over.

You're a free agent. You're free. Yeah. Why why? Why do you really want to I mean, do you really want to spend your life working for someone else? No, you don't, look at you. I can see those eyes right now. You want to know part of it? And our final question, what is it that you know about investing today that you wish you knew twenty years or so when you began the psychology part of it? M HM expand on that, Well, the rules have not necessarily

changed that much. People might argue that the rules have changed, but they really haven't changed. It's understanding the human condition because it really calms you down. You realize, Hey, look there's a lot of luck in this world. Things are random, you know. I think anybody can go out and figure out a way to make their first million dollars. But you know, it's a little luck sometimes if you're gonna make a billion, So don't kill yourself trying to think

you're gonna make a billion. You're probably not gonna be suckerberg to say the least. Mike, thank you so much for being so generous with your time. This has been absolutely fascinating. Uh, For those people who want to learn more about Mike Coval, just go to trend following dot com or on Twitter at trend following. It'll get to me, it'll get to him. I want to thank my producer, Charlie Valmer, our head of research, Michael bat Nick. I'm

Barry Ridults. You've been listening to Masters in Business on Bloomberg Radio.