The Derivative - Blame it on the Bossa Nova with New Market Wizard Tom Basso

Episode Date: May 27, 2021

How do you get included in a Market Wizards book? How do you get a whole Michael Covel book written about you? You move from charting markets on graph paper to point and figure charts to running systematic models on an IBM computer in 1980, to running $600mm plus via Trendstat. We’re talking Havalinas and Bassanovas with none other than Tom Basso in today’s episode. Tom is a New Market Wizard as identified by Jack Schwaeger, and now semi-retired, trading his own money in between dancing and wine making. We’re covering trend following, Arizona, raising money, enjoying the ride, making money, risk management, the mistakes big investors make chasing returns and bailing on drawdowns, facebook, trading red bean futures, chemical engineering, slippage, golf, and more. Chapters: 00:00-02:18=Intro 02:19-11:09=Arizona Pastimes 11:10-20:36=Back into Trading 20:37-36:00=How the Legend Started 36:01-01:02:12=150 Meetings 01:02:13-01:08:56=Mike Covel 01:08:57-01:17:15=Favorites Follow along with Tom on twitter and on his website, https://enjoytherideworld.odoo.com/ From the episode: Aaron Fifield Interview Trend Following Mindset: The Genius of Legendary Trader Tom Basso And last but not least, don't forget to subscribe to The Derivative, and follow us on Twitter, or LinkedIn, and Facebook, and sign-up for our blog digest. Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer

Thanks for listening to The Derivative. This podcast is provided for informational purposes only and should not be relied upon as legal, business, investment, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations nor reference past or potential profits, and listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk

of substantial losses. As such, they are not suitable for all investors. Welcome to The Derivative by RCM Alternatives, where we dive into what makes alternative investments go, analyze the strategies of unique hedge fund managers, and chat with interesting guests from across the investment world. And I did 150 meetings with various fund-to-fund managers, pool operators, anybody I could, family offices. I'd go to New York and spend from Monday through Friday, one after another, and raised $0 over about a year.

And that was one of the reasons why, and I'd be going into these fund-to-fund guys and saying, you know, you're all stock-oriented. If you blend in some of this fun, you actually improve your return-to-risk ratios. It's like a slam-dunk decision. Well, you know, we've always stayed with stocks. I don't know about this futures thing. I go to a pool operator and they'd say, well, we understand the future stuff, but you've got mutual funds in there. I don't know if our legal framework can cover securities. I don't know if our partners want to do that. There's always excuses. Enjoy the ride. That sounds like a Harley Davidson motto to me, the Davidson part especially,

but it's a philosophy that can be applied to anything from playing golf, drinking wine, and of course, riding a nice long trend in the market. So today's guest does all three of those things, using his favorite enjoy the ride motto to guide his day to day. He's a legendary trader, quote unquote, per Michael Covell's latest book, having taught himself the ropes for launching CTA Trendstat. He's the author of Panic Proof Investing and the self-published The Frustrated Investor. And even in his retirement from the biz, continues to manage money and provide investment wisdom for every level of trader. So without further ado, we'll welcome Tom Basso to the room. Thanks for joining us. Good to meet you, Jeff.

All right, you too. And so we were just chatting. That's your virtual background of your lovely Scottsdale view off your deck. Yeah. If I wake up early enough in the morning being retired and all, that's what I see. That's the morning sunrise from my back deck in Scottsdale. I've got another home up in the mountains that has an equally beautiful view out its back deck, but don't have that one handy. My wife's uncle has a place up in desert mountain that i've been to a few times it's just 15 minutes from here yeah and you get the sunset and the infinity pool and yeah that's good living yeah um and those you're a big golfer you ever play any of those courses aren't there like six nicholas courses there or something uh

they're up to seven now seven come on yep they added a seventh thing and you can play one every day of the week now oh and they're all nicholas uh they are awesome um where do you usually play i'm usually pinnacle peak country club in the valley and then i'm up at chaparral Pines in the mountains in Payson, Arizona at about 5,000 feet. And both are beautiful courses and I'm pretty much in heaven year round. And is it like target golf out there in the desert? You got to know a pinnacle peak is one of about three or four courses in the metropolitan area that went with the old style parkland setting using eucalyptus trees like Rancho Santa Fe did out in San Diego area. So you have tree line fairways, you have dog legs left and right where you have to work the ball. It's highly technical. A lot of fun golf for me. Desert golf where you're hitting the target, you could bend it right to left, left to right. You're up

in the airspace over top of the cactus. There's nothing in the way, but when you get a 50, 60, 70 foot eucalyptus tree that you got to go around, you got to, you got to golf your ball. You got to pay attention. Uh, what's your, what's your handicap? Uh, right now I'm about a 10, 10. There you go. It's pretty good. You shot your agent. Oh no. You're not old enough, yeah. I'm only 68. I've got to probably make it another 15 years or so, and I might get there. Right. You either got to be really good or really old, right? I'm not really good, and I'm not really old.

Somewhere they'll cross. Yeah, exactly. It hasn't happened yet. The golden cross of golf. Yeah. And then what what you have those little I've been out there a few times and there's those little pig things that run around. What are those things called?

Yeah, javelinas. Javelinas. That's right. Yeah, a pot of javelina can be very dangerous when a papa or mama is protecting the little ones. Papa particularly has some big husks that come out and you do not want to mess with a papa javelina that's uh mad at you so i don't want to mess with a papa javelina that's not mad at me we we just uh just had a lady friend of ours that was out

walking uh at night and ran into a pot of javelina and they charged her and she went to the hospital yeah it couldn't get bad i think they should have come up with something better than a pod right well i think that should be like a habit of javelina or something whatever i don't get to name these things uh do they eat those things out there or anything uh people have tried and um it's like a wild boar right it's like a little mini yeah apparently they have a very awkward taste that is nearly impossible to get away from and uh i know some people have really tried hard because they are uh to some extent a nuisance in places and i don't know that anybody's ever figured out how to cook them no matter what. I mean, soaking them, brining them, whatever. And I'm not sure if they

don't maybe have parasites too. And then you got to deal with those and you make sure. Yeah, it's probably not a good idea. I go to Safeway and pick up my pork chops or something. It's a lot easier. And on top of all the golf and Javelina stuff, you're a winemaker now, right? Yeah, I make usually Italian reds and I usually have the juice shipped into my Payson, Arizona house up in the mountains. And I work with about 30 bottle carboys that I can lift myself on a workbench that I built into the earth and cellar that I do it all in so the temperature is always about 60 degrees and I can do fermentation and I have a second carboy that I can transfer the clear juice to and take away the dregs and filtering and doing all the stuff that you got to do to go through the process. And then finally bottling, I have some equipment to bottle it and I screw top

everything. I think that's the most reliable way. Corks are a bad idea. I don't know why, I guess it's tradition, but I far prefer screw tops from a reliability standpoint. And they were running out of cork for a little bit there, right? Well, it's environmentally, it makes more sense to me environmentally. It doesn't make more sense for the economy of Portugal because their workers really need the jobs to cut the cork. But, um, yeah, I, corks have air pockets through them and sometimes bacteria can get through them and, um, it can spoil the wine. I've had six or seven bottles of wine over time, one at home and about six of them out at restaurants that were corked and completely

bad bottles. You could tell they were, they just smelled bad. I mean, they were terrible. I've never had a screw top ever. And so you get this, the juice, as you call it, gets shipped in from Italy? Italy or Italian grapes grown in California, either way. It depends which one. I've been making a lot of Amarone lately, and that's a very expensive juice to get a hold of because they have to dehydrate the grapes down to concentrate the juices so it's quite the process and if i can get the juice it's i don't have to go through that extensive process and then all i gotta do is make the wine is completely yummy and um uh you know reasonably easy i can probably do a whole batch of wine in about six to eight weeks all right you know start to finish and what is what is the cost? How do you buy that?

If you work it out on a price per bottle basis, for 30 bottles starting point, which gets down to about 28 finished bottles because you lose a couple in the process, I'm down to about $10 a bottle for Amarone. Normally, Amarone, if you go out to a liquor store, it would cost you $60, $70 a bottle. All right. Nice. So you got a little trade baked in there. It all disappears from my own cellar, either through gifts. When I'm going over to somebody's house, I'd rather bring them a nice bottle of my homemade Amarone, then go out to a store and buy something that I am either okay with or not too sure of or whatever. I know the quality of my own wine. Right. But that's like a little $40 bonus that you got yourself.

Yeah. And people enjoy the fact that we've got my wife's picture on it and I call it Brenda's Amarone. And we tell a little story about Brenda and I make it humorous and it's, it's kind of fun. Did you see the, who is it? The long-term capital management guys have a wine brand now, like convexity or something it's called. Wow. That's bold. Yeah, exactly. I think I'll find it for you, but it's like a big, yeah.

The label is like making fun of themselves. They have a lot to make fun of. Yeah. There's, they got a lot coming. You're an engineer by trade, right? Before a trader yeah was that a chemical engineer so is this winemaking back to your roots there you know there's a lot of chemical engineering in my life even in the money management because chemical engineering to me is uh think of a process you're bringing something in like raw materials to a chemical process and then a chemical engineer would go through the heat exchangers and the distillation columns and the reactors and the pumps and everything to create

a different product given those raw materials. Then you would ship that out to the world, to other chemical factories by pipeline, by rail car, by truck, by whatever, or use it inside. What's the classic examples like making plastics yeah uh you're shipping an oil you're distilling it down to the byproducts you're taking some of the stuff like uh the hexane or something and you're you're moving it through pipes over into another reaction at part of the the process where you're uh making an intermediate chemical or something and you're shipping it out in a rail car. So it's stuff in process it stuff out. What's money management. We got down links coming in satellites. We got internet.

We got all this data comes in. We have computers that process it and try to decide, do we take action or do we just sit on our duff and do nothing? And then we have orders that come out of that thought process, either once a day, once throughout, or many times throughout the day, if you're day trading, once a week, whatever your trading process is, the orders come out and out flow from your operations outside in the world. So it's the same kind of thing. And with chemical engineering,

you're always trying to optimize that environment and make your process more efficient. And Trent's Capital Management, which was my firm back in the day until I retired in 2003, was literally that. I mean, we had 40 computers and 10 people, four of us were computer jocks. We just tried to keep computerizing ourselves out of business, basically, and let the computers do all the heavy lifting because humans are basically lazy. So we work very, very hard to be lazy. Yeah. And but it's just the same thing, you know, bring in the data, process it, ship out orders. Kind of the same thing as chemical engineering. My good grades in school stopped at the chemistry classes. I didn't like all those graphics and everything.

I got a perfect score or nearly perfect score. I missed by three on my chemistry regents. I got a 97 out of 100. And I went back to the teacher and argued. New York Board of Regents is wrong. And here's why. And that's how much I knew chemistry. I had this whole debate with my daughter the other day.

She's doing a project on Alaska. And in her thing, it said, William Seward purchased Alaska. I'm like, well, and she said, the US government paid him back. I'm like, I don't think that's correct. She's like, no, that's what the teachers said. And I'm like, well, sometimes the teachers are wrong. She's like, teachers aren't wrong. I'm like i don't think that's correct she's like no that's what the teachers said and i'm like well sometimes the teachers are wrong she's like teachers aren't wrong like no they are you got to learn how to question authority like seward bought it on behalf of the united states he didn't buy it himself and then gift it to the united states that was a lot of money back

then yep that's what i remember um so moving on covel says on his title of his new book, how do you feel about having a whole book written about you? And my wife Brenda actually got me back into trading because I was enjoying retirement and I'm not doing anything. I was just relaxing. I traded all my life and it's just nice to have a break. And she came to me with her portfolio and sheepishly said, you know, I know that you know a lot about money management and I know we're getting married and you probably should take a look at this because I know that you're probably going to end up having to advise me on it or manage it or whatever. And it was about 20 minutes of disclaimers before she handed it over. And I looked at it, I said, you know, for somebody at your level in the public that has zero time, zero knowledge, you did a darn good job. Congratulations. But then I took it over and because I was starting to manage her portfolio I said well I might as well manage mine too at the same time I'll just

do some of the similar things it won't take me extra time too much and then one thing led to another family somebody in Atlanta and and another guy that a stepson that was over in New Mexico at the time now in Hawaii it was such long distance that I felt like different time zones my god I'm three hours different from Atlanta and I'm another three hours I think different from Hawaii so I said social media let's throw it on Facebook. I started just saying, if I have a hedge trade, or if I'm doing something particular, shifting my position, I just put it on there figuring, I'm getting broadcasting out to all my relatives what I'm doing so that I don't have to go one by one and tell them all. Then some of my old trader friends started figuring out I was doing that,

and they were interested in which way I was leaning. And they remembered me from the old days. And then they start sharing things with their friends who are also traders. And pretty soon, I've got thousands of people following me on Facebook. Then actually, Larry Tentorelli over in Massachusetts says to me, Tom, you know, there's a lot of stuff happening on Twitter. You should just take your posts and just copy them and put them over on Twitter. Now I've got 27,000 Twitter followers.

And then MeWe just came around in Parler. And I've got like hundreds of MeWe followers now. And I've got a whole bunch of LinkedIn followers. And I hardly ever am on LinkedIn, but people keep asking to link to me. So my life has gone from basically retiring and being somewhat at that point obscure to having books coming out on me and having a lot of interviews I do. And I enjoy them. I mean, this is my favorite topic of my life, really. I love trading and I love helping people. And we don't always just talk about trading.

We talk about wine and other things. So it's always fun. I have fun with these interviews. But it has been, let's see, I've been retired 2003, about 18 years now. And I've got videos I've done. I've done webinars. I do a lot of interviews. I write research reports if they

amuse me at the time, if I have the time to do it. And I find a topic that I think is interesting and helpful to people. And I run enjoytheride.world, which is my website that I put together after having wine in Malaga, Spain with my wife one day, we were trying to take care of the problem of me getting a lot of emails and questions from people that were the same questions that people tend, you know, new traders say, Tom, if you have the time, I have this problem. I'm trying to solve this. What do I do? And I would answer them all. And I've answered thousands of these in my retirement. And we were trying to think of a way to make that more efficient. Again, process in, make it more efficient, information out, chemical engineering 101. And we couldn't figure it out by way of emails. But we then started figuring what if we did a retirement website and put a lot of my knowledge about trading in one place and make it all the way from in some cases free to in some cases like the video series it's like 2400 or something for a 16 17 set

video series that i did my shop myself edited myself put it together over the course of months and it's everything i can think of about trading all in one place. So seminar I'm going to this weekend, two days in Miami, teaching it with Lawrence Bensdorf, who's a master trader from Brazil. He speaks six languages, so he can take care of all the language issues. I can take care of the English. I do half the presentation. He does half, gives me a break. And all of these things are a way to efficiently get a lot of information out to people without me having to you know be in an office eight day eight hours a day you know yeah five days a week just slogging through all that experience the more

you put out there the more people want to it's kind of self-defeating as well like okay i fixed the email problem now i got 10 000 tweets and direct messages coming in seminars i'm going to so yeah tweets uh have the both blessing and curse of being limited by character so i find everything there is pretty quick facebook gets a little bit more involved sometimes but if somebody asks me a question that is gets beyond beyond messenger and, you know, it's just awkward to do it. I, I give them my email and say, could you ask me the same question over an email? And I can answer it a lot easier over there. So I, I kind of do it to suit me. And, um, a lot of times if somebody asked me a question that I know is answered on the website, I just have my website up all the time. I just go to that page, copy the link, say your answer Trendstat of how you got started,

how you became known as this legendary trader kind of before all that other stuff. So take us back. How did it all get started? It all got started, I guess, initially. The first investment was a mutual fund with Fidelity that was front end loaded while I was a paper boy at 12 years old. I had about $10 a week. And I decided if I could put $10 a week away, I might be able to pay for some of my own college education because my father was a postman. And my mom cleaned dishes at the high school. And my father worked extra handyman jobs just to try to keep us in clothes and us three kids in clothes and food. And my brother's 6'5 and 260 and I'm 6'3 and 207 this morning. So we ate a lot. And so my poor dad

and mom had to try to keep up with it all. And so by the time I got around to college between scholarships and savings and my mutual fund that I had saved and all that, I was in good shape to take, I think it cost me about 18,000 to go to Clarkson University and get a chemical engineering degree back in the day. It's now more like 160,000000 in today's terms, but $18,000. And I think I ended up with about $4,000 of student loans. So through summer jobs, working as, you know, reffing basketball games and doing whatever, I was able to get through. Now, when I'm coming out of college, that was another critical juncture because now I'm sitting there thinking, wow, I got 26 job offers at chemical companies and oil companies as a

chemical engineer. I wonder which one I should take. So part of your decision is what city are they in? What's the climate like there? What's the job entail? How much are they going to pay me, et cetera? And then another one, I thought, you know, maybe I should check out their stock price and just see what their stock programs and what their stock is doing. Maybe that'll give me some insight as the companies that are sort of failing or other ones that seem to be going crazy.

So I started plotting like 26 different companies' stock price. And I didn't know how to do that. So I got a book on point and figure charting. Read it. Started the point and figure chart back in those days. This is pre-computers now. You know what I mean? You're doing this on graph paper or something? Graph paper. Yep. Little, little tiny square boxes, X's, O's, point and figure, all by hand and did that for about a year or so. And tell people what a point and figure chart is. I don't know if our listeners know exactly what that is. Yeah. If you go on some of the broker

platforms, they might have that as one of the indicators, but it goes back to old school floor charting where there's zero computers, not even calculators. And if you're on the floor of the New York Stock Exchange, you had to have a little piece of postcard that you can put in your pocket, and you had to have a pencil or a pen, and you had to be able to track how prices went up, which are Xs, and prices went down are Os. And they go up again, and it's Xs and Os. And you get to see where the chart patterns are, and are the prices, every time you have an X, does the X make it higher than the previous row of Xs? And therefore, you're sort of in an uptrend. Or does the O's exceed to the downside the previous row or column of O's? And therefore, you're on the downside and you're in a bear market or a bear move.

And that's the way these guys could easily keep track of which way was the market drifting at any point in time. And they could do it with zero computers and very quickly so there's no time axis uh on a point and figure chart it's just x's up and then when it decides to turn around go the other way you start doing zeros or o's yeah but at each price level right yeah at the different price levels yeah so as the price hits that level you just put another row or if going down some farther, you put another row and you just keep doing it. And that's how I started out. And then I graduated into bar charting. pc with all of something like uh was it four k bytes of ram or something ridiculous my phone has like hundreds or thousands of times the capacity of my first computer and a couple years later i bought an ibm at the rest is history I just kept programming things growing. I hired computer programmers. I started out with just basically a secretary and myself and some computers. And then,

you know, by the time we hit the peak, we were 600 million and trading. We had clients all over the world. I traded money for Merrill Lynch and Chase and Bank of Montreal and Royal Bank of Canada and all sorts of. So did you ever take one of those chemical engineering jobs or no, you went straight? Oh, yeah. No, I did take a chemical engineering job for about stayed there for about five years at Monsanto. Yeah, exactly. And then I moved over into marketing research for about two and a half years. And then I became a strategic planning analyst in the chemical industry, which is basically picking apart your competitors and trying to figure out based on aerial photographs or effluent streams that are filed with the EPA,

back calculating using my chemical engineering experience, roughly what their capacity might be. In other words, if you know they're emitting this amount of effluent, then you can back calculate by the process they're using in the typical impurity streams. You can take a guess at how much is their capacity because they're your competitor and you're trying to figure out what percent market share do you have? What percent do they have? You're doing a lot of chemical engineering on your competitors and on the marketplace on your customers try to figure

out the best way to get your product out there at the maximum possible price and yeah and use up your capacity or decide whether you need more capacity and make a recommendation that we increase the capacity of the plant uh or something so that was kind of fun for a while and then yeah and then you said screw all this i'm gonna manage money. I was making so much money on money management on the side, just going home at night and doing all the updates and computerizing it. In stocks. In stocks. That was that day in stocks.

And I was making enough money from that, that it paid me exactly the same money I was making from my chemical engineering job. So I didn't even have to take a cut in pay. Benefits and everything were all covered. it paid me exactly the same money I was making from my chemical engineering job. So I didn't even have to take a cut in pay. Benefits and everything were all covered. I went and started the business up, hired the secretary, leased the office, got the computers going, went out and kept raising the money. Eventually, I had a couple of partners join me. Eventually, I left that firm to them and formed Trendstat and never looked back and grew it to a huge operation covering futures currencies.

We traded 30 currency pairs at the peak, about 80 futures markets, 25 mutual funds, individual stocks, T-bills for collateral control. A lot of stuff going on and what was the base model was trend following is that fair to say yeah and very what would be considered today basic trend following or a lot of bells and whistles well we had our own little wrinkles that i figured out i had great position sizing which I wrote a book on now called what successful traders size their positions, why and how, and it's only 65, 70 pages, maybe 80 simple math that you learned in about seventh grade at the latest. And it's a simple way that trend stat used to keep all their positions sized appropriately for the different market conditions that existed. And in every trade that comes along and across the portfolio.

So I actually spelled it out in detail, the precise same models that we used at Trendstat. And it's $10. I kept it so inexpensive so that you can download it electronically. It doesn't cost me much for you to download it electronically. It doesn't cost you much to buy it. It's sold thousands and thousands of copies now and people love it. So stuff like that, we had figured out with the help of a lot of research. I did a lot of simplistic research for MAR reports back in the day that no longer exists, I understand. And a lot of these were just kind of my observation of some of the stupid things that go on in the

money management industry, even by the professionals in the money management industry that don't make sense to me and don't hold water mathematically, but they happen anyway. Well, like, okay, so I'm a money manager. I'm going to a fund to fund manager. And I've just ripped off six of the best months of track record that I've had in my entire lifetime. And the money is coming out of the woodworks. It's being thrown at me as fast as people can sign up Trendstat to manage 10 million here and 5 million there. And we want you to come into New York and meet our board, and we're going to give you 100 million. And could you come over to Abu Dhabi and meet with us and all these different places? And everything goes nuts. And that's about the time you're about ready

to go into your next drawdown. At the bottom of the drawdown, people are calling up complaining, pulling money out. And, and you're saying, you know, the risk levels are way down. This has kind of been overdone. We're could be ready to turn the other way. Nah, they won't listen, pull the money. So now your assets under management go down. You got to figure out how to deal with that from a business standpoint. And then the process starts all over again through the next lunatic lunatic cycle. I've always thought it'd be someone should come out with a like reverse fee structure or something like to incent people to invest at those drawdowns, right? It'd be better for them. Yeah. Better for the manager. Like, Hey, I'm going to give you fees are on sale when the, when the equity curves on sale and disincentivize them to get

in at the highs. I would just rip off a 15% return or 20% return in a few months or whatever, six months. And they'd want to give me $40 million, but a 0% management fee and 20% incentive fee. And I'm sitting there thinking, okay, so I take on this account and it goes into the next drawdown and the next cycle happens and you pull it out at the bottom and I make no incentive fees. I get no management fees, but I'm gobbling up 40% or 40 million of my capacity, which is limited with your money. It just doesn't make any business sense. So I turned down tons and tons of business over the years. I could have been a lot larger, but I just wanted quality business. I wanted good clients. I tried as much as possible to keep the clients that were sensible and knew what they were doing.

And to some extent, because I was, I would say, a little more on the boring side being an engineer and keeping everything sort of plodding along a little bit more than some of these guys that I was competing against that would be up 60 and down 20 you know all over the place and drive people crazy I was a little bit like John Henry he was one of my major competitors and you know you had Campbell and company and you had oh gosh Dunn. Some of the turtles were out there during my years because they were my compatriots. They were all my age group, sort of. So we all came up together. Jerry Parker, a friend from the old days, those kinds of guys. So Campbell and Dunn and Chesapeake are still at it. Yeah. Some of them are still out there. Yeah. Chesapeake was another one. Yeah. You mentioned the mutual funds. What were you doing in the mutual funds that you were trend following?

I was timing. Yeah, I was timing mutual funds back when mutual fund timing was starting to get a bad name and mutual funds were complaining about us timers, you know, moving money too quickly in and out and it was upping their costs and they had to adjust their position sizes and they didn't like that. But they're only pricing at end of day. So this was purely end of day strategy. Did you have some component where you were trying to get in at a better nav or something? No. And end of day only. Nowadays, of course, you do that mutual fund timing and ETFs. And that's what I do. I actually trade, I think, a 23 ETF portfolio of all sorts of different sectors. And I use trend following to do it and position size it. And it's easy. And were you always on in the TrendStat portfolio? Or would you get stopped out? Or would it reverse long short? No, I didn't go short. And I don't now either. TrendStat never went short?

Oh, I went short in the futures area, but in the mutual funds, you couldn't go short and even ETFs, you could go short, but I choose not to. Yeah. I'm talking. So back to Trendstat and the overall portfolio. So you had all these currency pairs, you eventually moved into futures. So we're talking like. I started with futures, moved into currencies. Okay. Into spot currencies.

Yeah. And you're following those. That took a year to make that transition, by the way. I mean, I was well known as a future trader. We were already up in like the hundred million range and a very viable CTA making tons of money. And I decided to go into currencies and fx is so different on the programming it took us a good year to work out all the bugs it was quite the learning curve yeah um and so give me a little more on the portfolio so it's a classic trend following global portfolio, 80 plus markets or so.

Yeah. I mean, we were trading for a while, like things like red beans. Yeah. Azuki red beans. Yeah. And rubber and gosh, we were into the weeds and some of the stuff I had to convince some of the people that had put those in there. When I looked at the transaction costs and the slippage i said you know the slippage is eating up all the profits you'd ever make from this thing it doesn't make any sense let's just get rid of it it's not worth trading yeah and um so we we

pared that down a bit and i think at the end we were probably down to about 40 markets or so 40 to 60 worldwide in today's world would be probably what you'd be limited to. And a lot of it would be debt instruments worldwide, sovereign debt around the world. Currencies certainly have depth to them. A few of the agricultural commodities have depth. Energy certainly has some depth. You start getting into lumber.

I mean, I can do that for my own portfolio in retirement, but back in Trenstad days, I mean, I looked the other day, the whole volume for the day was like 147 contracts or something. Yeah. No, thanks. With $600 million, you're the bull. You're not the ant on the bulls. No, you're going to find yourself in a lot of limit moves where you can't get out of the market. So somewhere along the way there, you got approached by Jack Schwager and you went into the New Market Wizards book. The Jack Schwager story was interesting because he really didn't want to interview me initially, but Tharp and some other people kept saying, you know, Basso's got some interesting stuff. He's kind of this guy that approaches things analytically and he keeps everything smooth and a little boring, but he's very interesting on the mental side of trading and he's figured out a lot of things. You ought to interview him. It'd be interesting. So Tharp puts together

a seminar up in New Jersey and I get invited as a guest speaker. And Jack happens to be offered a free deal to come in to sit there and listen. And by lunch, the last day he comes rushing over to me at break and says, Tom, what are you doing for lunch? I'd like to interview you. I got a next book coming out. And so we decided to go to lunch and we do the lunch. We're I'd like to interview you. I got a next book coming out. And, and so we decided to go to lunch and we do the line. He we're running out of time. And I said, Jack, I got to get back. I'm the guest speaker this afternoon. I got to be there and we're kind of pushing it. And, but I'm having a good time. Why don't you just call me up when I'm back in Scottsdale and you're up in New York and you know, we'll chat on the phone and finish our talk no big deal he says great so he

does it writes it up he FedEx's me the the whole chapter and of course he names me Mr. Serenity and I'm reading through the whole thing and I read through it I was like at lunch I'm having lunch and reading this thing and I get all done done. I call him up. I said, hey, FedEx delivered it this morning. I've already got the entire chapter read. I do have one comment. And he said, okay, let me get a copy, you know, papers. So turn to page eight, turns page eight. I said, this word is misspelled. He said, okay, what else? I said, that's it. He said, that's it. You don't have any other changes. I said, no, I thought you pretty much captured the interview pretty well. You, some cases you kind of modified what I said to make it more sensible. It sounds better than the way I would

say it. No, I think it's very understandable. It's exactly what I was trying to get across. No problem. He said, are you okay with my naming you Mr. Serenity? I said, Jack, it's your book. You can name me anything you want. I don't have a problem with it. He said, big pause. He said, Tom, this was the easiest chapter I have ever written in all of the wizard's books. It's like, I turned it on. It flowed out of me, I was done. And it was just the way I wanted it. And now you have a spelling mistake. And you haven't changed the thing either. And I don't know if it'll be in the book, it's up to the publisher and the editors to decide. But I really enjoyed doing this interview. It ended up in the book, I became Mr. Serenity, became a well-known entity in the industry at that point. And kind of my life went crazy.

So were you as famous before then or no? So that puts you on the map in terms of being a legendary trader yeah yeah that probably made me legendary before i was getting well known and i was making a lot of inroads and i was getting a lot of business and we were growing rapidly but after market wizards you know that's when i became legendary and but but it was uh i was always under the impression in the past that you were like doing your own personal trading then there was the market wizards then there was trend the past that you were like doing your own personal trading. Then there was the market wizards. Then there was Trendstat, but that's not true. Oh, no, no, no, no, no.

Trendstat, no. Trendstat predated all this to me. Trendstat was the proverbial 20 year overnight success. Yeah. When market wizards came out, new market wizards came out, I was well-known everywhere all of a sudden, but no, I had already been slogging away for 20 years in the trenches to get to that point. And then I read, I can't remember where that was, maybe in one of Kobel's books that you did, I can't remember exactly, but 115 meetings or something one year. 150. Zero assets raised. So just, I think that's, we got a lot of managers that listen to this.

So tell us about that. I found it interesting of all the excuses and the backs and the forts. Yeah. You know, I had a product that I called a multi-strategy single manager, multi-strategy fund. And it covered securities with mutual fund timing. It covered currencies with FX. It covered futures markets

by multiple strategies. There was like six or seven strategies embedded in one fund with a very attractive management fee and incentive fee, both on the low side of the industry in a partnership format. And I did 150 meetings with various fund to fund managers, pool operators, anybody I could, family offices. I'd go to New York and spend from Monday through Friday, one after another, and raised $0 over about a year. And that was one of the reasons why, and I'd be going into these fund to fund guys and saying, you're all stock oriented. If you blend in some of this fund, you actually improve your return to risk ratios. It's like a slam dunk decision. Yeah. Well, you know, we've always stayed with stocks. I don't know about those futures things.

I go to a pool operator and they'd say, well, we understand the future stuff, but you got mutual funds in there. I don't know if our legal framework can cover securities. I don't know if our partners want to do that. There's always excuses. Everybody was looking for what they didn't like about it rather than realizing the benefits of it. What year is this? This is now getting back into 2001 area, 2002. The bubble hadn't totally burst yet, or it was just starting? Oh no, it was bursting, you know, the tech bubble. Oh yeah, it was already getting beat up. And I was waltzing through it. I think those guys wouldn't have been as excited to be saying,

oh no, we only do stocks. No, I mean, these guys had just gotten beat up. And I showed them where they wouldn't have gotten beat up if they had done something more sensible, tried to talk in their language. You know, I'd been in the business for 28 years or whatever it was, I knew how to speak the language. And they, many cases, they appreciated what I was saying, but you could just say they didn't have the courage. They didn't, it was something new. And there was only myself and I forget who else at the time. I want to say, I don't think it was Campbell. I'm trying to think of who was my competitor. There was two people out there that were starting to get into what I call a single manager multi-strategy. And so you're putting multiple strategies under one umbrella and charging one fee schedule and the advantage of course is is that when you have a pool and you're you're hiring 10 different

managers like i was frequently hired if i'm making money and getting an incentive fee but the next guy's losing what i'm making then the fund itself is not benefiting at all by the two of us being in there but you're paying me an incentive fee and not an incentive fee to the next guy. So it doesn't make sense from the clients. If you do a single manager multi-strategy, now you offset all of those strategies and you pay one incentive fee on the total fund. It makes a lot more sense for the clients. Well, but you have the idiosyncratic risk of that single manager would be the other flip side of that. But yeah, I guess. Okay. But if you trusted me to, if you want to hire me to do one single manage a single strategy, why wouldn't you do multiple strategies? You know, you know, I'd rather be dancing or singing or cooking or making wine or playing golf or whatever, this running around the world, beating my head against the wall. And people just don't seem to get it. And this was

back in like 2002, remember? Okay. So now there's two of us kind of competing and neither one of us is doing very much trying to pull anything together. And so I go away from the industry and retire and have a smile on my face most days. And lo and behold, Eric Crittenton, about three years ago, calls me out of the blue. And he and I have known each other for a couple of decades. He's here in Scottsdale. So am I. He says, Tom, you know, I don't know if you know this, but I'm out of my old firm and I would love to have lunch with you. I've been kicking around a few things. So he sits there and lays out this whole thing about how he's thinking of doing an alternative management fund that can do securities and futures and blend them together. Single manager, multiple strategy, same thing as Trendstat.

And he wants to put it inside of a mutual fund, which is so much more sellable than a partnership is. Investment company, active 40. Oh my God. I said, Eric, do you know how much that's going to cost? He says, yeah, I do. It's going to be 400 to $500,000 probably in legal expenses. And I said, then you realize you're going to have to have a team of people. He says, yeah, I think I have an idea who I could get. And then he starts laying out the strategy to me. And I'm blown away. It is brilliant. It is simple. I love it.

It has aspects of trend following. It deals very well with large capacity. He can easily manage several billion without any issues at all. He lays it all out at lunch. The lunch was like four hours long. I, my adrenaline was flowing. I was so sky high. So we got to get, well, we, we got to get, no, not at that point. I was still retired. So he starts saying, well, let's get together again. You know, I'm going to think about it some more and you think about it too. Let's, let's get together in a couple of months.

So no three months goes by, we get another three hour lunch and we talk about it. And now he's got people identified. He's got a little bit more structure to what he thinks he's going to need to pull it off. And I tweaked it a little bit. And I said, you know, Eric, from my standpoint, I think you're being too conservative. I think you need this and that. And we, I'm in Han. I gave him my grandfatherly advice at that point, because I'm getting into my late sixties and he's still a little younger than I am. And he writes that all up and he comes back to me and says, Tom, I'm ready to go. I think I've got all the pieces of the puzzle together. I've got my software under development. I got the people

doing the software. I've taken programming myself. I know what markets I'm going to trade. I've done a lot of simulations. I think I'm ready to go. And I said, so how much you got to raise. And he told me the number. I made a few phone calls and inside of, I think it was five days, had all of the capital raised for the management company. Within about six, seven months, they put together the legal on it, which was extensive. It was very expensive. These are lawyers that are going to charge you three, $400 an hour. I mean, it is insanely expensive because not very many, not very many people really understand this stuff. And you got to do offshore corporation to take care of the future side and get it to fit inside the, you got to, inside the mutual fund, you got to get, you got to get your fund managers,

your custodians, all that garbage. Oh, my gosh. So much legal work. Finally get it together. Finally pull the people together. I've raised the capital. They eat into the capital by half a million or so to get the thing off the ground. They've got a budget for the rest of it.

Comes time to form the board. Well, I'm on the board. A guy named TK Kallenbeck's on the board. And Eric's on the board. A guy named TK Kallenbeck's on the board and Eric's on the board. There's three people. Eric and I are pretty darn knowledgeable of investments, you could say. And TK is run the highest level. He's on the board of Cathay Pacific. I mean, he's at the highest level of boards out there in the world in the airline industry but that's going to be a corporate structure have been on the past year no not really i don't read numbers no uh it turns out no cafe pacific oh yeah yeah yeah yeah oh yeah yeah with the pandemic and airlines going well

and hong kong is their headquarters yeah so there's a lot of interesting. So we have a blast at our board meetings. We work so well together. And management team is so talented. And they're above $50 million now. And we're trying to get together a happy hour to celebrate going over $50 million. But they're beating their expectations on both performance of the fund, the risk versus their sector. We're beating our marketing goals in terms of assets under management. And we've done a pod with Eric.

We'll put it in the show notes. So when you were doing your multi-strat and timing the mutual funds, you didn't have kind of an always long equities component though right so i would and eric does right so do you think the industry had to like you were ahead of your time even a little bit the industry had to come along in order for this product to even exist right i feel back in the back in the day everyone wanted to do with them oh no i've got the equity piece. I'll find the alternatives piece. I'll put them together. Yeah, standpoint is-

And maybe now, because we've gotten Twitterized and we want everything done for us. Millennials like, no, they do it for you. They put it together for you. Just send your money over there. Exactly. And it'll automatically rebalance, right? There's a lot of good that comes out of that.

Ton of good. And so standpoint to me in my life is Trendset 2.0. I feel like being the chair, I guess I got because I raised all the capital that got the thing off the ground. When you're showing your age though, they call it 2.0, not 2.0. 2.0. Okay, whatever. But it's basically a single manager, multi-strategy fund, which in this case, you don't have to beat your head against the wall for 150 appointments and get

zero capital. People are basically signing up for the fund as fast as we can process it. It's kind of nice, a real, real different environment for me. And I'm having a blast kicking ideas around for Eric and how to position himself, how to help him with things like public relations. Because Eric is, you know, started out like I did as an engineer, sort of nerd. He wasn't an engineer,

but he definitely admits to being a nerd back in the day. And I would admit to being one too. And you kind of have to figure out how to do a logical podcast with someone and how to smile every now and again, how to tell a joke here and there, how to tell a story. And I'm giving him a little bit of my fatherly advice about those types of things. I'm also talking a lot with him about strategic direction and how to deal with future capacity issues and how to get ahead of problems rather than have them surprise you. And so we have a...

Sorry, that blend solves the issue you were talking about of like, we're in this drawdown, I'm going to pull my money right when I should be putting it back to work, right? The blend concept kind of solves that issue by removing the line item. And you can just- Well, look at it this way. Let's say you have 50-50 like we do at Standpoint. And 50 of it is something like 60 different futures markets. And the other 50 is a bunch of worldwide stock exposure long. Okay. So let's say you go through a beat yourself up bear market and the 50% that was stocks is now only 40% making, of course, the futures part of it now 60%.

Well, then what you're going to do is take 10% out of the futures and you're going to move it over to the 40% of stocks. And in the middle, at the end of this drawdown that you're going through in stocks, you're going to be putting money into the stock portfolio to catch the next upswing. The exact opposite of what clients typically do. So you're fighting the client psychology and the types of things that is bad investing that I did all my research papers on standpoint internally is actually taking care of the problem for you. Right. It's solving a market problem and a behavioral problem. And the behavioral problems have become much more front of top of mind, right? Recently. And, you know, I've done a lot

of research being written on that. A lot of the questions that I get from Michael Covell and even you and others out there get into the psychological side of investing. And I fond of remembering one thing that Van Tharp, who's a famous psychologist in the industry, talked about, he said, what's more important, your buy sell decision or your position sizing or your mental side of your trading? And, he said, what's more important, your buy sell decision or your position sizing or your mental side of your trading. And, you know, you get a lot of different comments, you know, and some people say, well, position sizing I heard is pretty important, but you know, you got to know where you're going to buy or sell or, you know.

And a pure plot would answer that the buy and sell signals every time. Exactly right. And not surprisingly, I did three webinars. Just decided for the hell of it. Saturday morning, each one, my wife ran the show and I was obviously the speaker. Did one on trend following, buy sell signals. I did one on position sizing and I did one on the mental side of trading.

The buy sell decision one, we had over a hundred people signed up for it and I had to expand my Zoom capacity to handle it. The position sizing, I was down to about 45. And when I did the mental side, we were down to 20. Now I put them together into a library on enjoy the ride dot world website and people can buy the recorded version of it and whatever there's still the largest sales are the buy sell engine and that's the least important if you as tharp would say if you as a trader in your own mind don't't believe in what you're doing, or you get scared or you get euphoric or whatever, you are going to jump in and screw up those other two things because you have the ultimate power as the trader. The other two things are just, you know,

they flow out of you or they're just details, but the mental side is the most important. And of course he's mental side psychologist. So he would say that but i truly believe it i mean i've seen so many guys just override yeah but as a systematic right you'd be like well it doesn't matter my mental state because it's all systematic it's all computerized right so why do i need to have a good mental state oh say i come down you know had, we opened up a down, was it 500 on the Dow or yesterday it was down 500. I forget. You get scared. You got everything systematic. And then your,

your strategy goes in and says you got to be buying and you look at what happened. You'd go, Oh, I don't know if I can buy. We were down 500 today. So you as the systematic trader have the ultimate ability to turn the computer off or not do the trade, or I'll take this trade that looks more sensible, but this one, I'm a little scared. I'm not going to do that. All mental. If you aren't head screwed on straight, balanced, disciplined, taking self-responsibility, all those good things, mental in the trading game, you will find a way to screw it up. The reminds me of a story, a programmer we worked with out of Spain actually had a trader said,

can you make it so my trading platform won't open after I've had three losses in a row? He put a custom software on there where he wouldn't because he analyzed his trades. And after three losses in a row, he'd start chasing and he'd turn a bad day into a really bad day. Or a bad month or a bad year. And how many people out there in the retail public hire a manager? They, of course, buy them right at the top. And then they go through the next drawdown and they hate the guy i'm getting tired him i'm gonna fire him i'm gonna take the money and i'm gonna buy joe schmoe over here who's just finished a really good track record yeah and i'm gonna get in on that one and then he goes into his drawdown and oh gosh i i wish i knew more what i was doing

i keep losing money buying these guys none of these guys know what they're doing. If he just stayed with the first guy, might be at all-time highs. I mean, I many times was at all-time highs in my equity, my equity curve. And I was one of my best clients. I would, on drawdowns, I would add more. And when I was really, really gotten to the higher risk structures,

I would get a little nervous when people were throwing money at me and I'd start peeling some money off and diversify it off into real estate or other things. Well, that's smart just from diversifying your business risk, right? Exactly. And it's just common sense, but people don't use common sense because they're being emotional and emotion. When emotion starts overriding what you've got going in your, the mental side of your trading or investing process, bad things can happen. What do you think about all these, we'll just call them kids these days or YOLOs or

whatever, right? Of buying Dogecoin and Bitcoin. They seem to have thrown the whole, either they're immensely good at the mental side and they can just handle this volatility and the fact that there's maybe not any real value in what they're buying, or they can just handle this volatility and the fact that there's maybe not any real value in what they're buying or they've just thrown that concept totally out the window and they're highly emotional well i don't know they they they took their stimulus check and they went but a fraction of a a share of whatever dogecoin um for pennies and if they make money they still have to get out of it. And getting out of it might drive it down a cent or two just on the volume of anything. But that's not a mature

market. That's just, I don't know, people exchanging cash to each other. It's a game. Everybody's playing as a video game or something. I don't think it's serious. I realize the capitalization of cryptocurrencies is ahead of the valuation of real currencies. But real currency, if I'm a grocery store owner and I want to price my Brussels sprouts that day, I can put a price on them and I know what they are. If I try to do that same Brussels sprouts bunch in Bitcoin, i have no idea what price is in bitcoin because it'll change from the time you pick it up in the produce section to the time you're checking out at the cashier uh it's just it needs to stabilize a lot more there needs to be a lot more players there needs to be a lot more uh credence in being able to get your bitcoins and cryptos back out dogecoin is a joke i

like literally isn't it but um yeah it was started as a joke and it's now grown to this big thing you know it's humorous but and i've it must have had hundreds of people take runs on me and how come you're not trading cryptos and i just say you know, I made slightly more than 100% on my own money last year in my trading account with COVID crash and the run up after I caught both sides of it. It was insanely profitable for me, the best year I've had in my life. And I didn't trade a single crypto the whole time. I don't need cryptos to have. And I'm in retirement. I don't even need to make 100% return.

I kind of fell into it because the markets move so much. I don't need cryptos to have, and I'm in retirement. I don't even need to make a hundred percent return. I kind of fell into it because the markets move so much. I didn't have a choice. I just made a lot of money. There's other years where I don't make that, but I, you know, you would have had it in the trend stat portfolio, like when the futures came out and you know, when the futures came out, if I had been back at trendsstat days and I had last year's movements, it might not have been a hundred, but it might've been probably the best year of

Trendstat's life too. No, I mean, would you have had, well, yeah, that as well, but would you have had crypto, right? Like Bitcoin futures in the portfolio, right? I keep talking to trend guys, like why not have, you're risking one half of 1% on a trade anyway, right? Like why not have exposure to it? I probably would have had somebody, one of the computer jocks, seriously, I would have them creating some

model, 24 hour on all day long through the weekend computer system that would be reading the price of Bitcoin and reacting by buyer or selling. So I probably would have something going because there is a lot of movement. So I would use it as a totally trading vehicle and I would keep it pretty small in the portfolio and then instruct clients that I've got it in there. Right. But I wouldn't, I'll risk it even if it goes to zero and I lose 2% or something like, why not have that in there? And if it goes to 600,000, at least I have a little exposure. Yeah, exactly. I would, I would probably be looking to do that, but only if I could integrate it into the totally computerized environment. I wouldn't want traders sitting around there on Saturday trying to figure out whether they should go long or short crypto

yeah exactly yeah um and there's been some saturdays recently that have been very interesting very interesting right nine percent i wonder if that's because the futures right at least the cme futures there's these other off out of the country exchanges that have futures, but not as you and I know them. So circling all the way back to this Covell book. So what's his love affair with you? What happened to you two? What happened to Covell was he was a, was it Ernst Weil? I believe the term is a podcaster.

And so he's cruising along interviewing this guy and that guy and whatever. And all of a sudden somebody suggests or mentions my name. And he thought, he thinks to himself, you know, this is about episode 200. I'm coming up on a big round number. And I've been doing this for several years and I've gotten the himself, you know, this is about episode 200. I'm coming up on a big round number. And I've been doing this for several years. And I've gotten the mechanics, you know, the mic and the sound and the editing and all the stuff that goes along with doing a podcast that you would know. And I've got that all figured out. I think I'm ready to, to ramp up and ask some big names. So the very first name he, he discovered was, Hey, Tom boss has retired. He's got a lot of time. He's got a good name from new market wizards.

He's very helpful with, he saw some of my answers on Facebook that I was doing. Cause we were mutual friends on Facebook and interchanged, you know, a few things here and there comments on his posts, his comments on mine, there was a meeting of the mind a little bit. and there, comments on his posts, his comments on mine. There was a meeting of the mind a little bit. He says, you know, I think it'd be fun to talk to Tom. I'm going to do that. So he puts together the hour, hour, 15 minutes, whatever it is. And we have just a blast talking.

It is story times and all sorts of stuff. We covered a wide gamut. He gets done with it, edits it up, puts it up there, announces it to the world as he does everything twice a week. I think he puts out podcasts and it immediately goes to his number one, listen to podcast. And it's like getting to be twice what the second place is. So he is coming up on number 400. So he thinks, well, I've been bumping up who I'm going after. And now I'm interviewing people in government and I'm, you know, I'm able to get a few sports stars that are retired and an Olympic star from this one Olympic thing. And,

you know, he's branching out and getting bigger names and, and diversifying his podcasts and he's having some success. And a lot of people are starting to subscribe to his podcast. So he comes up on 400 and he says, you know, why don't I go back to the well and see what Tom's doing? I'll just catch up with him. So we do number 400 and this is several years have gone by and, uh, I've now started up maybe enjoy the ride that world and I've done some things and I've helped a lot of people and I've gotten thousands and thousands more people on Twitter and I'm more well known than I've ever been. And number 400 goes ballistic. Again, so he gets to number 600, and he interviews me, and he says I'm going going to do something different. I'm going to put out the Super Basso episode. And he combines together three of my interviews with a recording, I believe, of some speech I gave at MAR back in 1995 or something that I don't even remember.

And he puts that all together in this, I don't know, four or five or six hour super basso episode that to this day is the most listened to podcast out of his thousand and essentially he turned that episode into the book that was the start of the book then we have my wife's forward which to me is hilarious that's the best part of the book to me is the forward because it's entitled living with mr serenity by my wife and oh she's got all sorts of stuff in there that you know really give us one of the highlights from that oh uh she says stuff like it's kind of strange because i don't know i'll look at the news and I'll see that the markets were off 600 points on the Dow today or something. And she'll casually over dinner asked me, so how did we do?

And I'll say something like, oh, we were up, I don't know, 15, $20,000 today. And she'll look at me and say, you're kidding. I said, no, no, I'm short Nasdaqs and blah, blah, blah. And then there'll be another day where, you know, we'll just be out to dinner someplace or something. And the topic comes up, we might be with another couple or, and it's a nothing day or something, or the market's been going sideways. And she'll say, how we how we've been doing the last month and i'll say oh we're down about five percent this month or is it she'll

oh my god you know she translates that into dollars and goes oh my god yeah i could buy a few cars for that and um she she still looks at the dollars and i look at percents and i've been doing this so long. I mean, you're managing 600 million. You're going to have days where you real bad days where you lose $5 million. No, it drives you nuts, but I'm, I've done that for, you know, decades. So to me, I'm, so one of her points was, is I can't tell by Tom's demeanor, whether we're having a good day or bad day. And I, and that's what it should be. You know, that's, that's a good relationship we have. She handles all of our real estate and I handle all of our futures and, and currencies and mutual funds and all that

trading. That's what you're supposed to come back to her and say with you, darling, every day is a good day. Yeah, that's smooth. That's if you go to, if you went to husband school yeah exactly you can borrow that one um so let's close it out or you got before we go to our favorites you got any other nuggets you want to share anything else no just that the whole back of the book is all the a lot of the research that i've uh that i've done a plus another interview that I did with Aaron Fifield, I think is his name. Yeah. And that was a good interview as well. So it's easy to read, edited from some of the interviews and things that have happened out there to clean up some of the languages and the ahs and the ums and the stuff that happens when you do a a interview yeah you you clean that up

into a more readable format and then all the research papers there's some interesting gems in there uh that maybe spark some imagination for people and uh so i it was a fun project it took us through covid then it's starting to come out after COVID and things are starting to open up. So the timing is good. And I've had a lot of fun with Michael going back and forth on it and getting it. We'll put links to it in the show notes here. Well, thanks. So we'll close out with some quick fire questions if you're ready i'm ready the favorite golf course outside of arizona

pebble beach pebble beach you've played it several times won a tournament there won a tournament there with my bride all right i like it um favorite type of wine that's not your own and that's not the uh um or maybe i'd probably go with a uh red blend uh like um not a super tuscan so much i i like super tuscans a lot i think i'd probably go with a california red blender cuvee a number of them are good uh none really come to mind specifically yeah just just generally is good yeah um and your favorite type to make is what you said before the uh that would be the uh that would be the uh yeah the amarona is one of my favorites i've probably made that uh seven or

eight times in the last few years what's its what's its texture what's its flavor it's uh it's raisiny a little bit on its finish because of the concentration of the grapes they dehydrate the grapes down then squeeze the juice so it's a little higher in sugar a little higher in alcohol but it has a raisiny sort of texture to it so it's very interesting and different from other wines and not a whole lot of tannin the way they do it so it i need that i have the bad histamines and the tannin and well and my wine doesn't have a whole lot of the uh of preservatives that a lot of with vendors will put in it. So a lot of people who have allergies can like my wine and they don't seem to get the headaches. All right. Send it out. Send a case out here.

I am not getting a new job being a vendor. I am retired happily. I want to stay that way. Favorite investing book outside of Covell and the ones we've talked about i'll tell you a strange one that has really impacted my uh my life my investing life and my thinking lately lawrence my partner in the seminar in miami coming up lawrence bensdorf is his name He's a Dutch fellow, lives in Brazil. Brilliant guy. Never even finished high school, but knows his investing. He's been very successful in doing what he's doing. He actually wrote a book that I really love called Automated Stock Trading Systems. And it's basically about automating and running multiple systems at the same time and what you look for in doing that. That has been easy to read and highly

educational. I've referred a lot of people to that book. Is it in Portuguese or is it in English? You know, he wrote it in English, but it has been translated a little bit in a few other languages. I know it's in Korean now, but I haven't kept track of what other languages it's in. I only need the English version myself. But during COVID, he just kind of said, OK, I can't go anywhere. I think I'll just move to Brazil and learn Portuguese. So he had five languages now he has portuguese so and now he's fluent in portuguese and so you mentioned dancing you

also mentioned mentioned singing you got a favorite yeah yeah i'm uh i'm a frank sinatra fly me to the moon uh summer wind um Engelbert Humperdinck After the Loving, Dean Martin, On an Evening in Roma. Some of those. You do it at this at home or you go to a karaoke bar? I have complete karaoke setups at both of my houses and I'll invite people over and we open the wine up and we have individual mics for everybody. So we don't spread COVID germs that much. And we, we stay socially distanced and have a great time. And that, and I take care of the Frank Sinatra and other people, you know, take care of John Denver.

And my wife tends to sing a lot of Carpenters and Ann Murray and a little bit more alto voices. I'll send you my family did a COVID karaoke, a few efforts. I'll send one to you. I don't know if it's ready for public consumption. Well, it's fun because especially with everybody being locked up, I found it being very liberating to get out. And I have a huge room that everybody was in. So there's easy to separate. And everybody just brings like an appetizer or a bottle of wine or something mic covers and you can get them from amazon different colors and you just got to remember okay i am the hot pink or i am the green or i'm the black uh and then every time you go up there we just change out the cover on the mic and you're in good shape

love it uh and lastly we ask everybody your favorite star wars character hmm okay okay i would say uh han solo always uh made me laugh um yeah he was pretty uh just some of the joke yeah under pressure he's going into warp drive and uh or star drive or whatever they called it where all the lights flashed by the hyperdrive um and uh you know and he's joking around with uh the the big guy walkie is he yeah but uh to chewbacca uh and uh and he's in all these situations that just like in trading, you know, stuff's being thrown at him and all that. And he, he's saying, uh, you know, something like, uh, this might be a little difficult and, uh, making it sound like it's no big deal, but he's about ready to, you know, blow up that part of the universe or something.

I just thought that he had some great lines and, uh, was cool under fire. Definitely. I love it. All right, Tom, thanks so much. Um, we'll look you up next time I'm out there in Arizona. Yeah, please do. It's fine. My dad's down to, uh, Tucson. So I get down there once or twice a year now. Well, in some cases you got to come through Phoenix to get to Tucson because Tucson's got a lesser airport. So you'll find some of the flights go into Phoenix and then you kind of have one more leg

to finish your flight. We flew out of Phoenix last time. So yeah, it's only probably from Tucson to the airport. It might be an hour, hour and 15, something like that. Maybe it depends on traffic. I'll take my money in a golf game. Yeah, we can,

I'll have you up to Pinnacle Peak Country Club if you want, you know, if you can spend an extra day here. Done. I want some wine and some golf and then we'll call it. We can handle both of those. It's been a pleasure talking to you. Yeah. It's been a real pleasure and a lot of fun to chat with you. I hope it helps some investors out there. And I hope you have a great rest of your day and the podcast goes well for you. All right.

Thanks so much, Tom. Bye, Jeff. Bye-bye. The Derivative is brought to you by CME Group. CME Group is the world's leading and most diverse futures and options exchange. For more information and educational resources about futures and options, visit cmegroup.com. You've been listening to The Derivative. Links from this episode will be in the episode description of this channel.

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