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Ep. 138: Gimp Investing with Michael Covel on Trend Following Radio

Ep. 138: Gimp Investing with Michael Covel on Trend Following Radio

FromMichael Covel's Trend Following


Ep. 138: Gimp Investing with Michael Covel on Trend Following Radio

FromMichael Covel's Trend Following

ratings:
Length:
31 minutes
Released:
Jul 19, 2013
Format:
Podcast episode

Description

Are you a gimp? Like that classic scene from Pulp Fiction, the gimp is the average investor. The gimp is the investor that isn't in control, either by their own choice or choices put upon them. They are left to the machinations and maneuvers of forces. They don't think clearly; they don't know how to make a decision. Their decision is simple: sit tight and trust the powers that be. That's what Covel calls "Gimp Investing". If you don't want to be a gimp investor you have to figure out a way to think; a way to be skeptical. Skepticism is where it begins. If you can be a skeptic, then you have a chance. Covel talks about "digging" for information; taking the information that's given to you and sorting it out for truth. Covel moves on to the comparison between digging for information and digging for dinosaurs. This idea of thinking and seeing what the data shows--not just trusting the system and the stories--is exactly what skepticism is all about. Jack Horner, the paleontologist, is one of the greats in his field. He's figured out that dinosaurs built nests, lived in colonies, traveled in herds, and that their skulls changed shape from childhood into adulthood. Most of this was not common knowledge until Horner came around. Horner walked into it wide-eyed; he didn't have a plan. He said, "What can I deduce from this that makes the most sense?" Covel talks about how much this compares to his early experience with looking at the data of trend following traders. Trend following is the other side of the coin to gimp investing. It says if you're willing to take those small losses, you're almost invincible. As long as you can come back to play the next day and you can take those small losses, it puts you in the position where if the black swan comes in, you're prepared. When the gimp style stops working trend following gives you a chance to survive. Covel ends with a clip of Jack Horner. It's useful to hear how an expert goes on to learn. It's not linear learning; if you're trying to make chaos a straight line you're going to have a rough life. Attach Horner's words to good trend following trading and it all connects. Want a free trend following DVD? Go to trendfollowing.com/win.
Released:
Jul 19, 2013
Format:
Podcast episode

Titles in the series (100)

Bestselling author Michael Covel is the host of Trend Following Radio with 9.5+ million listens. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trading -- all passionately explored and debated. Guests include Nobel Prize winners: Robert Aumann, Angus Deaton, Daniel Kahneman, Oliver Hart, Harry Markowitz & Vernon Smith. More guests: Jack Canfield, Howard Marks, James Altucher, Dan Ariely, Jean-Philippe Bouchaud, Kathleen Eisenhardt, Marc Faber, Tim Ferriss, Jason Fried, Gerd Gigerenzer, Larry Hite, Sally Hogshead, Ryan Holiday, Jack Horner, Ewan Kirk, Steven Kotler, Michael Mauboussin, Tucker Max, Barry Ritholtz, Jim Rogers, Jack Schwager, Ed Seykota, Philip Tetlock & Walter Williams. 900+ episodes.