The Derivative - Cover to Trend Legends Cover with Michael Covel

Episode Date: December 10, 2020

It’s hard to get too far into the words Trend Following without running into the name Michael Covel. If you’ve ever looked into the strategy type, his name is there. From speeches to his many books, the aptly named Trend Following Radio and his trend following twitter thread, Michael has been digging into the philosophy and people in and around trend following for nearly 24 years. And as our guest on today’s pod, we cover a large span of topics including: living in Vietnam, first COVID flight, market wizard to turtle traders, the Jerry Parker inspiration, great stories from legends like David Harding, Tom Basso, Ed Seykota, Mike Shannon; history of turtle trading, Michael’s array of trend books, Trend Following Radio, all-start guests, the different (unfair) standard for managed futures and trend following, trend following battles, what’s what of trend following, long vs short term trend following, the Chinese and Vietnamese markets, and becoming an investment personality. Chapters: 00:00-2:39 = Intro 02:40-10:56 = A life Abroad 10:57-26:19 = Move to Trend Following & Successful Author 26:20-46:39 = Legendary Stories 46:40-01:02:01 = Drawdowns & Figuring out the Philosophy 01:02:02-01:08:33 = What’s the Asia Investor Mentality? 01:08:34-01:12:49 = How New Managers can Navigate the Social Media World 01:12:50-01:26:20 = Favorites From the episode: The Whipsaw Song – Ed Seykota Get updates on Michael and his work by listening to Trend Following Radio, following him on Twitter and checking out his website.  Order his books: Trend Following, The Complete Turtle Trader, Trend Commandments, and The Little Book of Trading.  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 look, that philosophy is not any different than all the Sand Hill Road venture capital guys. It's not any different than Jason Blum making movies in Hollywood. It's the same thing. It's not any different than Jason Blum making movies in Hollywood. It's the same thing. It's not any different than Moneyball. It's the idea that we can't

predict anything. So we have to take many bites of the apple and many bites of those apples aren't going to win, but we're going to get some big trends. Look, ask Jeff Bezos, why is Amazon successful? They tried a million different things. Some of them became Alexa, but you've got to try. And that's something that we don't really look at in life, at least in the discussion of a life philosophies we all want to be experts who supposedly can make one bet and it's gonna be right whereas if you're making a bunch of bets you're probably much better off because you're not gonna be right so take a bunch of bets and ride the ones that go your way and let go of the ones that don't.

Good morning, Vietnam. Sorry, I've always wanted to do that and couldn't resist when we have a guest dialing into the pod from Vietnam today. We've joked in the past in a blog post that today's guest probably has a chart showing some huge trend in sugar or something tattooed on his back. Hand Club, having written four books on trend following, which are translated into 14 languages, owning the trendfollowing.com URL, and being the host of the popular Trend Following Radio podcast. So from the trend following beginner to master of the trade, we're sure that Michael Covell's name and works have popped up somewhere for you along the way. We'll be going through all that and more on today's episode. So thanks for joining us, Mike.

Hey, thanks for having me. How is my Robin Williams there? Do you get that a lot? You know, when you're here, you don't. It's like being in a parallel universe. I'm in this place of money and economics and boom. And it's like a foreign concept for a lot of Americans, if you've not been here. I have never been there. So tell me a little bit about it. Tell me about the choice to live abroad. And you were kind of doing remote and work from anywhere way before the pandemic. So what drove you to go out east there? I was happily existing in the States in 2012. And a nice bank in Hong Kong said to me, hey, do you want to do a speaking tour around Asia? It was going to be like 10 countries,

20 plus cities. I'd been to Asia before, but I thought, okay, this sounds cool. Why not? I'm single. I'll go on the four month, all expenses paid first class tour of Asia to talk to sovereign wealth funds, China asset management, every hedge fund and mutual fund across Asia. Why not? And I did. And it was really fun. You never came back or did you go back and then go back, come back and then go back to Asia? No, I kind of stayed. I mean, I visit the States and stuff like that. But anyways, in the middle of that four-month tour, I had a two-week break and I decided to go to Vietnam, the only country that I've ever been in my life where I knew no one on the ground. I had no contact there, zilch, nothing. Just the Americans showing up at the communist country where you need a visa, you don't speak the language, and you don't know

anything. And it was the most fun country in Asia. Hands down, not even close. What countries did you visit? So you started in Hong Kong? I was in Tokyo, I was in Beijing, Shanghai, Guangzhou, Shenzhen, Hong Kong, Kuala Lumpur, Bali, Bangkok, Phuket, you name it. And Vietnam was on the top list. And what town, what area are you in in Vietnam? I'm in Ho Chi Minh City, formerly Saigon, but still called Saigon often. Okay. Who calls it Ho Chi Minh?

The locals do? No, the locals call it Saigon. Ah. And it's been fun what's the virus been like there i think the southeast asia has been pretty good at keeping a lid on it but how's it been uh pandemic 100 million people in vietnam and i think they've had 35 deaths which i think were the result of a Westerner coming into the country and getting to a hospital of old people. There's about 100 million people in Vietnam?

Sorry for cutting you off. I would have guessed 30. Yeah, 100 million and 35 deaths. Three, five. Woo. That's a little better than the U.S. And what's everyone there think about us stupid Americans, of the politics and all the mess we have over here?

Vietnam loves America. I mean, the Vietnamese people love America. Insane respect for. It's almost hard to figure out. I mean, we sort of started a war here and sort of killed 4 million people, and they love America. Even today, they love you more. The shine's coming off the rose petal.

There's no shine coming off. It's a really deep... Look, I think if most Vietnamese had the opportunity to just go on a vacation to America, I think they would all take it just to try. They just all want to experience. Remember, there's 5 million American Vietnamese in America. So there is this connection where people in Vietnam hear the stories about America and they want to go and experience it and see it, et cetera. And what you mentioned, it's booming, booming right a lot of manufacturing moved out of china and into vietnam what's what's that whole story yeah i booming in a lot of just economic development

building first subway under construction since i've been here and he built the 10th tallest building in the world in downtown saigon it's it not, I mean, look, their desire is to reshape their cities to appear like Singapore. Now, they're not close yet, but you can see they will get there. And you'll be along for the ride. Any plans to leave or you're there for the long haul? I don't know if there was a plan to come here. So, right? Just go with the flow. Look, everyone in America who has been clocking in a nine to five job for the last 10 years,

doing whatever you're supposed to do. The things that I grew up with, right? I'm not married yet, one significant lady in my life, but the things you're supposed to do, start the family, go to the baseball game, all this stuff. And then maybe people wake up one day and they say, well, is there something else that I have not experienced? Well, I'm kind of on that ride. Yeah. My wife's brother, my brother-in-law has this thing that people should retire first and then work later, right? Like work when you're older and don't have anything else better to do and like go travel the world and have fun and do things when you're younger. I like that idea. Right right i don't know how we pay for it but

it's a good idea um so i love that you might be hitting a little too close to home with my light filled with baseball games and family stuff but uh i get it i love i look i love baseball i played it all through my i played through my first year in college i I mean, I grew up with all that. I love it all, you know, but it's interesting. Look, we only get one shot at this thing, this life thing, and you got to make choices and you can't do everything. It's interesting, right? Yeah. And it is cool, right?

Like it's like the sliding doors movie or something. Like who knows what path, if you had taken another path six years ago or not said no i'm too busy i can't take that asian trip of whether you'd still be here or whether you'd be there or wherever i had a i had a psychologist on my podcast named allison gopnik she had writes about something she calls bayesian babies and the idea is is that when you're a baby you don't really have a plan you try something and if it works you try more of it and you just kind of follow along the path, you don't really have a plan. You try something and if it works, you try more of it and you just kind of follow along the path. What's the path of least resistance that feels good? That's kind of how I'm here. It's not normal. It's not normal when you get

to be an adult in America to have a Bayesian mindset because what we want to do is plan everything. And if we see something that could be really interesting, if it doesn't fit into the plan, we literally don't do it. Of course, I'm also talking about trend following too, right? People get an idea of what they want to do with their investments. And if something all of a sudden does something unexpected, even if it could be a huge windfall, if they did not plan for it or predict it or imagine it happening, they don't do it. So we've got a lot to cover on today's pod, but can you start with a little background on how you got into this crazy world of trend following? I have to go back and look through my exact notes, but I think I read the Market Wizard's book in early 94, I think. And then I found out about the Turtles. I remember picking up a magazine in Borders Bookshop, summer of 1994.

Borders, rest in peace. Yeah. It was financial world's top 100 paid on Wall Street for the year of 1993, I believe. And number 35 or number 37 was Jerry Parker. And I actually have a picture of the article here somewhere. I'd have to find it. But Jerry Parker was number 35 or 37. He was, I think it said he was 35 or 37 years old. And he had made like $35 million for the year of 1993. 35 cubed. Yeah.

And it was like a little brief paragraph. And it said he was a turtle trained by Richard Dennis. He was not close to Wall Street. He liked country music. He lived approximately at that moment in time, 90 minutes to my house in Virginia. And he was doing a trend tracking system. So for a guy who was thinking, with all of my bad grades, I'll never be reading balance sheets like Warren Buffett. I was like, who the hell is Jerry Parker? What is a turtle? What is a trend tracking system? Who is Richard Dennis? And it was that light bulb moment because I thought to myself, if this guy exists and I don't know anything about him, if he exists, that means anybody can

do it. Now that's a little naive, but it's a little true too. And that was my thinking. And I pulled on that string. It took a long while to meet Jerry, but I did. And piece, piece, piece, piece, piece things together. I put up a website in 1996 called Turtle Trader and I had a first book come out in 2004 called Trend Following and my podcast started in 2012 A few things there, one I think that's probably the first and last time Jerry Parker's been called Wall Street, right? He probably didn't like that and then two, he's great, we've had him on the pod with his pet parakeet.

We've had Salem Abraham on who was introduced to trend volume from Jerry Parker. So, yeah, once you start to peel back that onion and see all those layers of all the people, it's quite interesting. And so some people there was some confusion. I remember back 15 years ago when you were still in the U.S. and we were doing some stuff together back at Attain days. Some people were saying, is he a turtle or is he not a turtle? So you weren't an actual turtle yourself, right? No, I don't think anybody ever thought that except. It may have been one of our crazy clients or something.

But I remember being in the middle of some argument. I'm like, hold on. I don't think he's a good guy. The ludicrous on the inside of assorted chat forums, perhaps, but no, I was just a guy who was inspired and I've been very frank. I mean, look, my, my book, the complete turtle trader is very frank about that. And you just mentioned Salem. I don't think, I don't think I could have written the book, The Complete Turtle Trigger. I don't think I could have put that full story out there without

Salem really opening up. He was the first person, even a little bit before Jerry, I think Salem was the first person to peel back. I mean, Jack had written some great books, but Salem was the first person to peel back. I mean, Jack had written some great books, but Salem was the first person to really add some context to the whole story. And especially Salem was so important because he was the guy that was really like, okay, here are the original turtles, and people can make an argument. Oh, you know, Rich picked these very smart people, and Rich did pick very smart people, i.e. Jerry. But Rich picked some...

It's also his money, right? Like, that's his right. Yeah, right. But Rich also picked some absolute, you know, idiots. One of them has been in and out of jail for the last 10 years. So, you know, there's this... People could say, well, the turtle thing

was special, and it was confined. But Salem, of course, Salem, there's this, people could say, well, the turtle thing was special and it was confined. But Salem, of course, Salem, very special guy too. But he kind of, he really, I think, and I tried to make the case with this. He took it from, you know, that kind of first generation Jerry to second generation Salem. And that kind of just inspired everybody to think, well, if I really want to be a quant, a trend following quant, I can take a shot at it. Right. We'll talk about, right, Jerry. Sure, he wasn't in the infrastructure, but he was up there in Chicago off the trading floor and working with these traders. Salem was just like, I'm going to do this from my ranch in Canadian Texas.

So it's like, yeah, if you can do it from there, you could do it from anywhere basically. But Jerry, Jerry though, I mean, in his start, he wasn't in Chicago. He was only there because Rich brought him there. Yeah. Yeah. What, so can you just for our listeners, I'm sure 95% of them know the story, but can you give us a two minute overview of the whole turtle trader story as far as you unpacked it and found out about it? Yeah, Rich Dennis was this really interesting guy.

Strong political views, strong personal views. Made his first million bucks on the floor in Chicago in 1976, floor trader. And he had amassed a lot of money in 76. Yeah, yeah, a huge lot of money in 76. Yeah. Yeah. A huge amount of money in 76. And by 83, 82, 83, I think he had amassed a couple hundred million dollars, 200, perhaps. He went and saw the movie trading places with his partner, Bill Eckhart, a quite well-known trader. They walked out my understanding. And Rich said, we can train people. bill said no you can't and they made

a bet they hired people off the street to prove that rich was right i mean thousands of street journal right yeah thousands of people applied they selected approximately 20 they trained them for a couple weeks at the end of that couple weeks sent them off to trade at the end of that couple of weeks, sent them off to trade. At the end of four years, they made, I don't know, north of $100 million. Then all of those turtle traders nicknamed for many different purported reasons, from the musical group, The Turtles, to a Singapore turtle breeding farm, to a group of young guys that wanted to be turtles. I don't know. I've heard all kinds of stories. I'm going to this turtle farm. Yeah. Anyways, when it was all over, those students left working for Rich Dennis. They went out on their own,

like Jerry Parker. Jerry, in the 90s, ended up managing well over a billion dollars. And that was it. That was just this. And that story inspired, I'd have to go look through my notes. I can't tell you how many professional fund managers have been inspired by that story. I believe that David Harding is on record. That was one of his early inspirations. And I think also, I don't think, I know the new Jim Simons book that came out last

year from Gregory Zuckerman. Simons talks about- My laptop is sitting on it right now. Yeah. Simons talks about Rich Dennis being a huge influence where they went on his trading. So it's an amazing story. I think sometimes in the online world, people get lost in all kinds of whatever. But it's a really, really important story. It's not a cute story. It's a cute name. And that sometimes bastardizes the story. But it's not a cute story.

It's a very important story for two reasons, the method and the act of learning, which gets the idea that you could transfer the learning. And it predated, right? Today, you would transfer the learning via a computer model, right? So it predated computer models. It predated all that. So it was transferring the learning by a set of rules, right? It was essentially a computer program written down on a piece of paper. Yeah.

And some of the turtles ended up coding during that time there. You know, look, they were, I mean, if you go back to somebody even like Bill Dunn, who was a trend following trader early in the 70s, you know, these guys were all coding things early, whether it was Excel or Lotus or Fortran. That was happening early. It was archaic looking compared to today, but you don't need all kinds of, quote, fancy algos to be a trend following trader. That's not what it's about. Being a trend following trader and using code is more of an accounting issue than it is like some advanced algos to predict some nonsense.

It's none of that. And so the story grabbed you and you had never written a book. You're like, I need to write a book about this. What was that like of going from, I love this story, I want to make money to, oh, I'm going to write about it first. Well, I had a website up for eight years, kind of showing people what was going on behind the

scenes with the turtles. And then my first book, my first book were sort of hidden at first from everyone, but now they're kind of, I don't, yeah, I don't, not by you, but I'm saying in general, they were, that was some of the mystery around the whole thing. Yeah, for sure. You know, my first book came out in 2004. Then my for sure. My first book came out in 2004. My book about the turtles came out in 2007. It was a long time coming for me to have a book about it. What was the first book? Trend Following.

Got it. Five editions into Trend Following now. Right. This one? Yep. Right. So this one? Yep. Can you see my video? That's a beast, huh? Yeah. I love this. Look, it's a little worn. I got a little worn on the end. If you don't read it, you can kill somebody with it.

Yeah. My favorite thing you did there, which I don't see a lot, is all the comments in the margin. You know who told me that for the first time? The former very successful manager at Legg Mason, Bill Miller. He was one of the first professionals I talked to about that book. And here's this value investor in 2004 reading Trend Following telling me how much he liked the Comets and the Marches. No, I love that because my brain goes right. You know, I want to read that first instead of all the stuff you put all the time and effort into. So the cool leftovers that I knew I wanted to have in there, but I didn't know where to put them. So there was that book, then the Turtles,

then the other trend-following books. So did you think you always wanted to be an author? That just kind of was one of those Bayesian paths you took? Yeah, for sure. For sure. No, I had terrible grades in school. I didn't care about school at all. So completely self-taught author, completely.

So look, it's just another one of these little examples in life. I'm not tooting my own horn, but the reality is if you want to do something, you do it. If you don't want to do something, you talk about why you're not doing it. Right, right. Which leads me. So what advice do you have for other authors i've been trying to write a book for about six years i can never finish it um and i know you're because you're trying you're not writing exactly because i have a day job right um and then i know taylor pearson who

we both know of mutiny fund he's told me that you pushed him to write his first book yeah i i actually still remember where we remember where we were when that happened. We were in a lobby in a hotel in Bangkok at a conference. And he was a little – I thought he had some insights. And I thought he was a little indecisive. And he's a big guy. He's like four or five inches taller than me. And so I got in his grill and I was like, dude, you've got to write this.

Don't give me any more excuses. Go write this book, something to that effect. But it must've been a, quite a funny looking, uh, exchange to, to other people because this guy, you know, I'm six foot, but he's like six, five. And I was kind of, uh, you know, he probably could have picked me up if, if he didn't like what I was saying, but I looked a little crazy. So he was, he was kind to not to, uh, hit me. Right. Well, he did it. The rest is history. Do you follow his blog as well? Like he does, he puts out nice essays of one night on him. Yeah. I see some stuff. Yeah. I mean, it's, you know, it's tough when you do a podcast. I don't

know how many episodes you guys are into now, but I'm doing a couple of week and you, you sort of, you sort of lose track of the rest of the world. And when you're doing a podcast that requires a couple episodes a week, you're like, what's going on with the rest of the world? I don't know. Where am I? What country am I? I don't know what's going on. Who knows? Right. You're just so into those guests and into what they have to say. And some of the stuff you're talking about is like, right. You're not talking about current events. You're just so into those guests and into what they have to say. And some of the stuff you're talking about is like, right, you're not talking about current events. You're talking about philosophically and what you need in order to stick with the trend and things like that from a behavioral standpoint. Yeah.

All the guests I try to have on my show, I want everything to be timeless. If I'm talking only current events, I've kind of screwed up right which is those I listen to those like mostly sports podcasts right but those have their place but not for our world yeah for sure for sure and so one of the favorite sorry go ahead no I was gonna say I do occasionally like to listen to Skip Bayless for you know a period of time so yeah and then you mentioned you played baseball in college where was that i played at randolph-macon for a year small college in virginia but i i i played with a lot of guys that were really good but i but after my first year i was like okay i'm going to transfer somewhere go transfer to division one

play somewhere but then at that level, it ceases to become fun. It ceases to become a, it becomes a job. Yeah. And then it becomes, it almost felt like military to me. I was like, well, this is no longer fun. And so I. Especially when you're in college, you're going out to run at six in the morning and your friends are coming home. Yeah. And it's like that famous line in the movie Moneyball. And I'm going to paraphrase here, but there's something to it with baseball when they tell you you can't play anymore or when you stop playing, there's this feeling. It's almost a depression. I mean, look, I got a buddy who got to AAA, was going to make the Astros out of spring training back in the 90s with Biggio and Bagwell, was going to be their fifth starter. In a spring training game, actually struck out Cal Ripken and Brady Anderson, tore his rotator.

Never got it back again. You know, so there's a certain – when that kind kind of with baseball, it's a funny thing, man. Can you imagine, I mean, just imagine getting to that level and you know, you know what the income potential is, you know what the earning potential is and a shoulder gives out on you. He's struck out Cal Ripken one more time than you or I have. So speaking of famous people, so one of the favorite parts of your books for me are the stories about all the legends in the space. So tell us a little bit about, you know, some of the people you've highlighted. My shortlist is Harding, John Henry, Bill Dunn, Sequoia, and more. So give us some stories. We've talked a little bit about Salem and Jerry. What other stories do you have from some of those chats? You know, all their trading success is

pretty well known. People can see that in my books. I think the fun part for me was how I ended up meeting a lot of them, how I ended up becoming friends often. I still think to the first experience meeting Bill Dunn. You couldn't get any more of a random experience. My father is a dentist. He says to me one day, he knows I'm doing this investigation in the mid 90s of all these traders but he doesn't know anything about it and he says to me hey you need to go talk to marty and i'm like what are you talking about because you need to go talk to your old baseball coach i'm like what do you talk like 10 years ago marty he's, stop. Marty Dunn was your baseball coach? Let me finish this. You got me overexcited. So I said, hold on. I'm like 26. You mean my baseball coach when I was

16, I need to go talk to Marty Bergen about what? Bergen, yeah. Excuse me. Yeah. And so he's like, he works with some trader. So I go and I meet with Marty and Marty lived one block from my house in Vienna, Virginia. I had not seen him for 10 years, but then I pulled out the Stark report and I realized Marty was doing audit work for Dunn Capital. And I looked at the Stark report. I knew all about John Henry, I knew all about the turtles. And I was like, who is this Dunn Capital? There's like no information on this guy.

And his performance was massive. His assets under management was massive. His track record was out the wazoo long. So I go to meet Marty. Marty sends me down for an informational interview. This is before Marty worked for Dunn. Yeah. Now he's in charge. Yeah. He's the boss now. And so I go down and I meet with Bill. And that was just, I still remember the handshake, the first handshake with Bill Dunn. Wow. Like, okay, nobody. I mean, I'm a decently strong guy.

And I was prepared for anything. But that guy, I mean, I'm sure there's someone listening that also shook hands with Bill Dunn in his prime. I'm talking, that was vice grip stuff man that was that was i know it was like walter and jeff eisenberg in my office had been down there to stewart and met him um their favorite story there is they have the like mobile trading unit or they used to back in the day where they could load up the rv you know if a hurricane was coming and take the show mobile. I don't know if they still do that, but that was a good one.

So that was, that was fun to, and to see at this time, we're talking like 1996 and I'm still kind of investigating things and to see the Dunn office at that point in time. So here we are with a track record that's, I don't know, for like 74 to 96 already. And I go in the office and it felt like an accounting office or a legal office. And there was one monitor in the office at that time. And it was hooked up to some server sitting on the ground. And I was just meeting everybody in the office. And at some point in time, an alarm, almost like a red alarm hanging on the wall, they're going to kill me if I'm saying this wrong, but I'm pretty sure this is true.

It's like a red alarm hanging on the wall and it kind of went off. And the guy that I was talking to casually got up, walked over, looked at the monitor. He said, we got a signal. He placed a call, came back and sat down with me. I mean, it was this most interesting. A little different than a Goldman trade desk, right? Yeah. Yeah. And so that was, and look, Dunn's a little more complicated today and whatnot, but I mean, the root of their success is still in the rules and the philosophy it's not that they have to be some show like you know some like like you know the Solomon Brothers trading floor that everyone saw in the big short you know that it's none of that stuff right but that was that was a fun experience and I think also for me meeting Ed Sakota for the first time was really interesting. And that was kind of a random thing.

I had registered the domain name edsakota.com. Huh. Okay. I had registered the domain name for about every trader that possibly existed. Smart. I wasn't going to hold them hostage or anything. I just was going to create websites. And Ed, one of his representatives sent me an email and said,

hey, we'd like the Ed Sakota domain name. That's all they said. I signed the piece of paper, dropped it in an envelope, didn't ask for anything. Just sent it off, gave it to him. He asked for it. I gave it to him. A couple weeks later, they said, hey, do you want to come chat with Ed? And I went down and I chatted with Ed in the Virgin Islands.

And the first question, I think the first question he asked me was, what was Richard Dennis looking for when he selected his students? First question he asked me. And Ed was kind of a wild guy that i'm not wild i don't know that what's not the right word but he was just as an interesting guy we're sitting yeah we were sitting in shorts and t-shirts with our hair looking crazy on the side of a beach drinking a beer and he says to me what did rich what did rich dennis look for and were you like no i'm supposed to be interviewing you?

No, no, no. You know, I'm a young guy. I'm not going to, you know, I'm going to answer his question. But I said, I thought he was looking for people to think in terms of odds. And his next response, I'm pretty sure, because I've said this in books, I think I'm right in my memory, but he said to me, who told you to say that? Then you're realizing, okay, there's a whole different level of intelligence going on here. I'm not going to get away with bullshitting this guy. Right. He's playing chess. You're playing checkers. Yeah.

Who else? Did you ever meet john henry or no i did meet him briefly i i and i one of the questions that i asked him a question one question i asked him that really stood out because we were there was a hotel attached to one of the world trade center buildings in New York, a little Marriott or something. He was speaking. I remember Peter Borch was in the audience too. It was maybe like 50 or 60 people. It was a couple of months after he was on the other side of the Barings Bank trade. Afterwards, there was a cocktail party and nobody was talking to him. He's the guy that just gave a speech. He's standing in the middle of the room i mean you know it's kind of a busy cocktail event you know if you get a bunch of

bankers a bunch of wanker bankers sitting around talking they think that but he's standing there he's not a very big guy you know he's pretty billionaire right so he doesn't have a target on his back? If this was 1994, 1995, I guess. He might have been there. 1995. He had to have been worth at least a half billion. But I walked up to him, and one of the first things I – you could tell he was a little nervous. Are people maybe just shy introverted, you know, and, you know,

but I said, I asked him about what kind of advice would he give to somebody that wanted to follow in his footsteps? And he was so like his body language, he looked like he had the stress of the world on his shoulders at that moment in time, not after winning the world series, you know, no stress then, but he just looked at me and he said it never gets easy losing money for people right he was in a pretty hefty drawdown around then maybe a little later but no no no 1995 that would have been a couple months after winning bearings he would have been the oh yeah behind the scenes he would have been the most popular guy on Wall Street. He was the you know, it wasn't stated publicly that he was the winner to the opposite side of bearings and leasing.

But all the brokerage firms knew he was the big dog. And did have you analyzed that trade? He wasn't on it on the other side on purpose, right? It was just via the trend model? Yeah, via his model. Now, look, at that stage of the game, can one theorize, okay, he was supposed to be, Leeson's long, he's short. Could I theorize? Could I speculate?

Could I hypothesize that possibly as Leeson was long and he was short his system, that he had some information through channels? I'm just completely guessing. I don't know that this to be true in any way, shape or form, but nobody else made, I don't think as much money. I mean, other traders made a lot of money on that trade, Bill Dunn, for example. But John really made a bloody fortune. Now, it could have just been a function of what his assets and management were at the time, too. I think he was much larger than other traders at that moment. I love it.

That's a story for another day. What's that movie with – who's the guy who plays Obi-Wan Kenobi? Yeah. But do they even talk about do they even talk about John Henry? I don't think so. And not that I can remember. I haven't seen it in a long time, but not that I can remember. You know, the only reason I the only reason I learned about that, though, was being in a room where the head of two brokerage firms were talking about who was on the opposite side. And I overheard the conversation. And then I just like overhearing that conversation, I decided to run with it and make it a central point of my trend following book in 2004. So I could have gotten a lot of- Did everyone ever come tell you that you got it wrong? So it's- I wouldn't be talking to you if I got it wrong. I wouldn't be talking to you if I got it wrong.

Yeah, 10 people told me I got it wrong, but I still go there. I still tell the story. If I got it wrong, Mike would have been facing a lot of pain. Yeah. That's going to be in the back of my head the rest of the pod now. Who is Obi-Wan? Ali, look it up on the phone. Not Hayden Christensen?

No, he was the other guy. It'll come to me in a sec. So what about, and then there's those videos of you and David Harding walking through London. I actually met with him once and did a little interview. We put a blog post out, but what was he like for you? He was cool. I had a chance many times to but what was he like for you? He was cool. I had a chance many times to meet up with David. He was very down to earth.

In fact, the very first time I met with him was before those videos. That was done for a documentary film. And again, I'm not trying to tell trading stories. I think if anybody takes something from this, it's like, okay, if you're interested in something, if you're curious about something, ultimately it's like Anthony Robbins advice. Go find the people that are doing it. Try and learn from them.

Try and give them something. Maybe they'll give you something. But I remember it was after my trend following book, I decided to write a second book, maybe the January of 2005. So this is eight months after TrendFalling came out. And I just called up randomly like 15 traders that I wanted to interview. They all took my call and like 13 or 14 of the 15 agreed to interviews. And at the time they were managing like a collective 15 billion under management. David was one of them. So on my dime, I just started flying around the world to talk to these people. And David was one of them. And we just sat in his personal office and I had not

written about him in my trend following book, at least I don't think I had. And I remember he was very British and he pulled up a monitor and he was showing me equity curbs of various traders. And he was showing me the equity curb, some of the names that I've already mentioned. Then he was showing me his and he was superimposing them. It was a return, maybe a cumulative return, and he was superimposing them. At that moment in time, he didn't have to tell me anything. It's like, okay, clearly David is doing better than a lot of people. It was kind of that toothy smile wink at me of like, hey, how come you didn't write? How come you didn't write about me?

It's clearly, clearly he was doing pretty damn good. So that was fun. That was fun. You were America centric at the time. Your apologies. The cool thing I remember about that though, is that he, he, like me, he had no problem dropping the F-bomb. And so here I am interviewing him for the first time. I don't know how many F-bombs he dropped. Really? I didn't get that. Yeah, it was so fun.

I mean, well, I mean, so maybe the two of us were sitting there dropping F-bombs. I'm not trying to say anything bad. Look, I thought he was a normal guy. You know, he's done very well. He's a billionaire now. But, you know, I always remember him as just a normal guy who shared with me. And I thought he was a normal guy. He's done very well. He's a billionaire now. But I always remember him as just a normal guy who shared with me, and I thought he was really down to earth, and that will always be my takeaway. I don't know what happens when you become a billionaire,

but I'm sure deep down he's still the same guy. Yeah. So of all the people, who did you enjoy the best? Probably like picking your favorite child. Yeah, these guys are, I mean, we're talking some of the great thinkers. Forget just trading. These people are great thinkers and really self-aware, very clued into the markets, economics, philosophy, psychology. But I would say, and maybe if I had

equal chance to be involved with all of them, I would have different views. Maybe you only get so much because you only have so much time. But I think Ed Sakota had some kind of mystical intuition or perception of me that was, I don't know, almost eerie. Like, okay, that guy, that guy can see through everything. And that was, that was, that was an interesting feeling to realize. And I still remember too, after I met him, I did some searches and he had a teenage son at the time, I believe. And I found his teenage son's math paper on the internet and it looked like hieroglyphics like i had no idea what it was at all you know and i thought to myself my god like what is what is ed what is going on in ed's head right this is this is the young son you know what you know so it's like just this whole different level you know

but on the flip side he was also a guy you could have a beer with and very gracious you ever seen his uh video of him playing the guitar about the whipsaws i did a an event where i interviewed i forgot larry height i did an interview where i interviewed ed and larry height in chicago i think it was in 2012 and ed pulled out his banjo for that audience like for the example and david harding was in that audience that day pulled out his banjo for that audience. Like for the example, David Harding was in that audience that day, pulled out his banjo and played that song for everybody. So it was great. We'll put it in the show notes.

I can't remember exactly how it goes, but it's something about the trends, your friend, then you get whipsawed to a nice banjo tune. And you've talked a little bit, common traits are just, they're great thinkers, unique thinkers. Any other common traits you think you saw between them? I mean, skepticism.

Skepticism basically doesn't exist in modern life for most people. Most people just accept what they're told. Right. These kinds of people don't accept what they're told. They exist on the outside. Maybe that's the reason I would get along with them is they can see in me, I had the same kind of personality that I just didn't care about all this other stuff. Right.

You weren't the next Bloomberg reporter coming to talk to him. And look, the average person sees the net worth of John Henry or the net worth of David Harding. And they become in their mind, gods where, you know, I still see them as regular guys who put their pants on very smart, some great success but i think there's people have lost sight of how to analyze and figure out things i mean even a guy like jeff bezos i mean the reality is he put up a website he started selling stuff. And then everybody realized you could buy stuff from

there. It doesn't mean he's a God. It means he's a very smart guy who had a great idea. But I think we make people into gods instead of like understanding who they are and what happened in their life. And yeah, there's a great, there's a good Josh Brown blog post about the new american gods and it's like jeff bezos apple it's kind of saying those fang stocks like have replaced religion for most people like those are right that's the new goal of everyone is to become there i mean look look at look at this thing that just happened right now this this relatively young guy who started zappos died the tokyo yeah yeah and i

know look i mean when you hear a story that a guy who's 46 years old dies in a house fire worth 700 million dollars you say your first thought is like at least my first thought and this is like think some of the guys you're asking me about i think their first thought would have been that's not the real story 99 of the world goes that's the real story then the real story. 99% of the world goes, that's the real story. Then the real story comes out and we all immediately find out, hold on, the guy that was writing books about happiness was perhaps one of the most unhappy people around. And that's not talking bad about someone who's not here. That's just doing an honest autopsy, an autopsy of life. And I hope people do it to me. I hope, I'm sure you hope people do it to you. Like rip us apart. Find out what makes us tick.

Like don't just read the headlines. Find out, is that person real? Is that person not real? Look, I could, if you were here right now, I'm in a city of 15 million people. I could literally, I don't speak the language, I could take you and drop you off in some area, me and you, and it would look so foreign. You'd be like, where are we? We're completely lost. I have a sense of direction. I have a sense of knowing how to navigate it. And that's fun in life, you know,

when you can start to understand the patterns of life and realize that all the headlines are just bullshit it's all noise um i love it right it's hard for me because most of the people we're talking to on this podcast and in my day-to-day are huge skeptics right but i guess we're i'm in the bubble of the one percent who are skeptical the world that way um you're for sure in the bubble. We're all in the bubble. I guess it's the good bubble. I don't know. It's like in the matrix, right? Of like, just give have the drawdown charts of some of the most famous uh people and their big drawdowns oh i closed it now i had it up here but

there's like bill miller warren buffett right and there's some like 80 percent in there 50 60 so it seems like managed futures and trend following sometimes held to a different standard or unfair standard when some of those icons have had these big drawdowns. What do you, you have any thoughts on that? Why that is? Well, sure. There's people, there's lots of people that want to manage lots of investors' money. So if somebody runs a big mutual fund that doesn't really do anything and has this hocus pocus annual report talking about how good they are at picking things

and this and that, and then this alternative form of thinking, trend following comes along and wants to bring assets from the mutual fund to the trend following world, well, yeah, they're going to say anything bad they fund to the trend following world well yeah they're gonna say anything bad they possibly can about trend following right right they're you're right pulled it up real quick from your from your book warren buffett 43 although i've seen bigger than that in other books like 50 something uh ken hebner 56 harry lang 59 fidelity bill miller 50 ken griffin 44 carl icon 81 i think that munger in 73 74 before his partnership with buffett munger was in the 60s or 70s yeah right and that's when they decided to basically stop having clients, right? And to

create a company. Yeah. I don't know. Is this still a debate much? I mean, I don't know if it's... Is trend following a philosophy still really looked down on? I think there's enough smart people that have done enough big success at it. I mean, people can say, I don't want to do it, but I don't know if people really can say it's not valid. Is that not valid argument still out there? It's still out there because not because of the sharp downturns, but because of the length. So right, basically, since 09, it's been flat. I always use AQR's mutual fund now as kind of the proxy. And it went to 18 billion. And now it's back down to three or 4 billion. So and I agree with you on the institutional investors, they get it, they just put some money, put an allocation in there and kind of set it and forget it they know it'll be there when they need it but i think for the grand majority of investors and especially more retail investors they can't handle the which you've written about which we

can talk about but they can't handle the behavioral aspect of it and right they want the negative skew thing that's small up small up big down They prefer that because they never see the big down. They don't want to think about it until it happens. To trend bond can be the small down, small down, small down, big up. It's going to be really interesting to see in our lifetime if we ever experience something in the States like Japan. Everything in America right now, by hook or crook, is built on having US stocks at all-time highs. If that model doesn't exist, if US stocks at all-time highs doesn't exist, and this means

we can have US stocks at all-time highs because we eliminate interest rates, because we sink the dollar, because X, Y, Z, whatever, as long as it's like the psychology. Now, though, they're holding hostage the stock market to like, you got to push through stimulus. You got to send people checks, right? Or like, we're going to have a little 2% down temper tantrum unless Congress figures out how to send everyone a check. Well, and what's so interesting about this current all-time high moment where we have to take all these actions to get it there the stimulus the zero or negative rates etc no one seems to have any thought that this could break no like like and i remember i remember in my documentary film sal Salem had this great analogy. He kind of said it in this homespun way.

He's like, you know, no one thinks about the meteor hitting. They just don't have that in their calculus. And it's like, okay, if we're at this moment in time where we're doing everything we possibly can do to be at all-time high stocks, if you're an old person, put your money into all-time high stocks. If you're any person, put your money into all-time high stocks. If you're an old person, put your money into all-time high stocks. If you're any person, put your money into all-time high stocks. Don't ask a question. Don't do anything. Just put it there. And don't think ever there could be a problem because there can't be a problem because we are the wizard of Oz. That's where we're at today. That's life today.

And, and, or they believe there could be a problem, so they might put it in trend following. But if it doesn't work for six months, then like, oh, this isn't working. I got to get back into what's working. And you're like that, you're missing the entire point. You're in there because it may one day not work. But right, if that stretches five years, that stretches 10 years, what if that goes 30 years? Right? And then you'll even start to see institutions be like, you know what? This trend following is not worth it. I think the other thing too in life, one has to decide what they want to be because there's a lot of stress. If one says in their life, I don't understand anything, but the system told me I must be long stocks. I don't understand

anything, but I must be long stocks. There's a want to understand anything, but I must be long stocks. There's a hell of a lot of stress in that. Now, if you choose some other way to make your keep and you understand it, there's less stress over the course of a lifetime. If you don't constantly compare yourself to your neighbors, because if you constantly compare yourself to your neighbors, that's a really crappy life. You're going to be, you know, oh, my neighbor's doing this. My neighbor's doing that. I mean, that's no way to live. You've got a big uphill battle there in the US, right? Like, cause that's what happens day in, day out with portfolios, right?

Of like, oh, I know I'm in this, I know I'm in the right portfolio. I know I did the process well but oh wouldn't it have been great to be an only fang and wouldn't have been great to own those Tesla calls and right they get so right the the neighbor effect is is huge and they want to just go into them yeah and that's that's just uh poison I agree look I I mean I I do tend to think and not tooting my own horn but I do tend to think that at some stage of the game, many people in the States, and maybe something like COVID helps to break it apart. of thinking we must be in a nine to five gig working for the man be stuck at all-time high stocks never see any interest income and then sit around and argue about which politician we like on left or right this doesn't seem like much of a solution for for living yeah happiness yeah it seems very

it seems it seems noisy and messy as hell yeah the um but you can't i mean even you must see like some of these guys or let me frame it a different way do you think uh sakota and john henry and dunn you think they could do what they did back in the 70s and 80s today like the market for sure has changed right i don't know you just talked about the fang stocks i mean what's what's what's what's trend following and i i give jerry parker credit for this what's what's trend? Trend following is a philosophy. And then there's an assortment of instruments that can be traded. Now, of course, historically, at least from, let's say, the 70s until to the 2000s,

it was typically defined around these commodity currency portfolios. Okay. But from a philosophical standpoint, what the hell is the difference? I mean, for Tesla, Netflix, it's just a market. It's just people moving a market. So- Right. Bitcoin. Right. Right. Exactly. Exactly. What's the difference? I get that if we need to be fixed to constantly look at why a particular portfolio is set from the 70s, 80s, and 90s. I get it. I've done it too in my books. But I think that's just foundational proof of the philosophy. And the philosophy is adaptive to the host of markets that appear on the scene.

And can you tell me right now, does anybody really think that humans have stopped pushing whatever market up or down? Has anyone seen that stop? Well, to the contrary, right? You see these stocks just go like, there's no way it can have a P of 200. Okay, next month it's P is 300, now 400. Right, like to the contrary, the fangs just keep going up. And you make the point right there in the sense of P.E. I mean, can anybody with a straight face really tell anybody that the fundamentals are useful for trading today?

That is just 100% bullshit. There is no way. I've seen articles of like, oh, this is expensive for historical CAPE ratios. It's all, I mean, look, why is that? Because a lot of very smart people on this planet spent their youth being indoctrinated in schools with very smart professors.

They spent all their time. They spent all their money. They're probably a lot smarter than me. Maybe it's a lot smarter than you. Maybe you did all this. I don't know. But I got to tell you, all that training does not help them to trade these markets at all. How are you going to price it today? But I think some things have changed, right? Like microstructure, market microstructure-wise. Now they know these trend followers and they can basically recreate all their models and they are likely to exit their Eurodollar aggregate trades around these levels.

So we might front run that a little. And that makes the market go through stops and through different levels a little quicker. So I think there are different things. That gamesmanship has been going on for a long time though. Yeah, I think it's more sophisticated these days down to the actual like bid and offer and putting in spoofed quotes and things like that. But for sure.

But then if you pull yourself out and you kind of diffuse the look and get a little blurry on the lens and I look at the Tesla trend and I don't know, does it really make a difference what was going on intraday when you look at a five-year Tesla trend? Yeah, exactly. Right. Well, and that's what's happened. Either trend followers have either gone way longer term to whip out that noise

over the last 10 years or shorter term. But then you start to see some are, you know, the philosophy gets adjusted too. So they might tell long bias. They might tell we need more equities. So we could debate it all day. But for you, I think your philosophy, right? Is that it's not something that can break because it's a philosophy.

How do you break a philosophy? And look, that philosophy is not any different than all the Sand Hill Road venture capital guys. It's not any different than Jason Blum making movies in Hollywood. It's the same thing. It's not any different than Moneyball. It's the idea that we can't predict anything. So we have to take many bites of the apple and many bites of those apples aren't going to win, but we're going to get some big trends. Look, ask Jeff Bezos, why is Amazon successful? They tried a million different things. Some of them became Alexa, but you got to try. And that's something that we don't really look at in life,

at least in the discussion of a life philosophy is we all want to be experts who supposedly can make one bet and it's going to be right. Whereas if you're making a bunch of bets, you're probably much better off because you're not going to be right. So take a bunch of bets and ride the ones that go your way and let go of the ones that don't. And I think investors don't like that, right? I always have this conversation with systematic guys and I'm like, well, you're on the phone with the investor. They're going to ask you what you think about oil. And I know your answer is, I don't give a crap what happens to oil. I'm systematic. It can go down. It can go up. I don't care who's drilling. I don't care about this. I'm like, I know that's your answer, but they want to hear you say something smart about oil. So can you just say something smart about oil. See, you're in a different position than me. You have to be politically correct or have a little diplomacy. You call them investors that actually talk like that. I don't know if I can use the term investor. I think maybe just mindless. I could even go harsher, but I'll try

to be kind. I mean, they're only investors in name only. They're just people in the system being told what to do. And they're just worried that they might do the wrong thing or their neighbor might get better. And it's a vicious circle. And look, at the start of this podcast, we were talking about country comparisons and stuff. Look, one of the reasons America is dying from COVID is from obesity. I'm currently in the least obese country in the world. I wonder why there's 35 deaths here versus 300,000 deaths in America. This is the problem that we have in America right now. It doesn't matter what the subject is. Nobody wants to get real. Nobody wants to get honest. And getting honest is to talk about what's really going on. We can't do that anymore. So I would just recommend to anybody out listening is just

when you look at life, when you look at making an investment or making a trade or figuring out a philosophy, get to something where you can be skeptical. Like if you're, if someone's listening to you and I today and they think, well, you know, Jeff and Mike, they got these opinions or whatever. No, that's don't, don't listen to me. Yeah. Here, what I have to, here what I have to say, prove me wrong. Right. And make your own um calculations yeah for sure from what you've seen and from your tour you mentioned um i know as institutional, but down, do you talk to like retail investors there?

I know that like Korea is well known for day trading and Chinese love their day trading. What have you seen out of their investor mentality? So I happened to just randomly yesterday, I've become friendly with many of the large multi-billion dollar funds in Vietnam. Yesterday, I happened to be in an event where the head of the Ho Chi Minh Stock Exchange was speaking. Quite interesting fellow. And it's an emerging, developing place in terms of that structure. So it was interesting to hear the real debate and the conversation from what the

interviewer was asking the head of the exchange was the foreign ownership requirement issues. So the country, knowing that they're developing, is still trying to keep some foreign ownership from dominating. Whereas the foreign investors want to come into Vietnam and put more money in. Yeah, they want it. But they're a little worried if the government is a little too strict on things. But I see it from both sides. So it's an interesting yin and yang. And now, of course, something like Tokyo is much more mature, Singapore much more mature. I would it it's just uh i would say this though from a big picture even more important than talking about any one exchange or any one group of markets in asia

highly recommend this to all americans now if you're over 50 even though you just told them not to listen to what you say but good right ahead. Right. Well, they can go verify. Okay. Trusted verify. Reagan Gorbachev. So look, if you're an American and you're over 50, you might already feel like you're done and you're close to death. But you've got to have younger people in your life, kids, family, whatever. Here's the reality. If you are pushing your kid younger people in your life, kids, family, whatever. Here's the reality. If you are pushing your kid to take Spanish in America, you're a blanking moron. Okay. Because there is absolutely no doubt that every kid in America should be learning over Spanish.

Choose whatever you want to choose. Japanese, Chinese, Thai, Vietnamese. I don't care. Maybe possibly even... No. Listen, there's going to be no middle-class growth in Europe or America in the next 50 years. There's going to be a doubling of the middle class in Asia.

Asia is going to kick America's ass in terms of growth. It's absolutely younger populations, eager to get wealthy. And that's ex-China or including China? Everybody. It's absolutely younger populations eager to get wealthy. And that's China or including China? Everybody. I mean, that was Jim Rogers and the China super cycle and everything of like that was happening. Then that's kind of quieted down.

But I think for sure people have moved manufacturing out of China and helped the whole region. Right. When the trade war happened, they're like, crap, we can't have all of our stuff at risk in China. Look, if the average American has never stepped foot in China, has never stepped foot in the financial district in Shanghai, or has never walked the streets of Beijing, let me tell you right now, don't read the headlines. Don't listen to the headlines. But go there and you will see energy.

You will see people. You will see people. You will see stuff happening that you've never seen in the States. Oh, yeah. And just their whole lives are on their phone. They're paying. They're doing everything. There's no, right.

It's like they're well ahead of us on many levels. And look, I'm still American for sure. One hundred percent. And I want America to do well. But I think we're going to. You're still going to have. You didn't renounce for tax purposes. Listen, we're going to have... That was a nice dodge by me. We're going to have a situation where America at some stage of the game will have to feel economic pain because of Asia's economic gain. And we're going to have to learn how that works. We're going to have to learn how to navigate that.

But I got to tell you, if you've got kids right now and they're learning Spanish in America, you are really not a smart person. Because there's... And look, 75% of American kids as a second language are put into Spanish. That's a crime against humanity. I have nothing against Spain

or Mexico, but from an economic development standpoint, from a standpoint of potentially your kids having a better life, they should be learning Chinese, Japanese, Thai, or Vietnamese 100%. I agree. We do some business in China, which might be of interest to you. Basically, some of these US CTAs have taken their models and put them on the Chinese markets, which aren't accessible except for in-country, but they have directional volatility like the markets used to be in the 80s. So you're seeing some of these returns and it's like those old John Henry type stuff because those markets move and the retail pushes them around a little bit more. And there's not as much institutional and commercial hedging that kind of caps it.

So it's interesting. Like you said about philosophy, you just mentioned John Henry in the 80s, but nothing's permanent. So the players that were popular or big at one point in time, it might ebb and flow. And look, let's face it, if you become John Henry and you got three, $4 billion, you don't really care about the rat race anymore. You do your thing, you don't run a baseball team. Go win the World Series. Yeah, yeah, yeah. So I just think it's a philosophy. And everyone knows there has been no stoppage of trends across traded markets. It's just a matter of where and how does one have a strategy to take advantage

of the markets that are popping and trending? That's it. Right. And well, the last 10 years, they haven't been in currencies or bonds, which was the bulk of trend followers portfolio. So the, the fault 10 years, they haven't been in currencies or bonds, which is the bulk of trend followers portfolio. So the fault might be, hey, you should have switched around your portfolio versus that trend following doesn't work anymore. You know, you've done perhaps more for Managed Futures and Trend Following than anyone else with your books and podcasts and everything. What advice would you have for new managers or existing managers that are trying to kind of navigate the social media and the modern world of getting attention out there? That's tough, right? Yeah. that's tough right yeah i mean i'm i'm lucky very lucky in the sense that

when i saw andreessen go public with netscape in the summer of 1995 i said to myself well this is game on Everybody's going to have a website within months and everybody's going to be remote working within months. Well, that didn't exactly happen, but it happened for me. And so I think that it's more of a mentality thing, ultimately. If one wants to start a new fund and they try to replicate exactly what everyone else has done, that's going to be tough. But I think also the other trick too is if you're starting a new fund, you're a trader, and you're putting all this time in to get your strategy and everything, well, then how do you become the personality to also be supporting it? I mean, look at someone like Jerry. Jerry Parker was not the guy you see today out talking and entertaining and giving great insights.

He was behind the scenes for a long time. Back in the day, you never could have imagined him on Twitter, right? Right, but now he's fantastic. And so I think maybe that's one way that new people can start. They can look at what people like a Jerry is doing or even a Tom Basso in retirement. Look how they're navigating. Look, it's going to take time like you don't get to just create a track record and that's enough you've got to win over the hearts and minds you've got to have a philosophy you've got to present so it's almost like if if you want to do anything today online to win fans to win fans, to win clients, et cetera, you've got to become your own version of a rock star. If you don't, who's going to pay attention if you don't do it?

Right. I liked what you said, become a personality, be a personality. I mean, just be yourself. It's almost like, okay, everyone's kind of interesting, right? Everyone is interesting in my humble opinion, but people don't know how to be interesting to others. So that's the skill part. Like how do you take your internal interesting and then learn how to broadcast that interesting? That's, that's the trip. I like it and go multi-channel. Should they write a book? If they have something to say. Yeah. If they have nothing to say, don't look,

I can't tell you how many, how many books I've seen from Harvard professors for my podcast, Harvard professors, people with who knows how much training. And it's the book is 250 pages and I can usually synthesize it to one sentence. That's I have a one sentence book that I, I have one sentence I want to turn into a whole book of the key lime pie diet. So you can only have dessert if they

have key lime pie at the restaurant. It doesn't work so well during COVID when you're not eating out, but I'm going to turn that in. I do think my trend following book in some ways could be a one sentence book. But what I did with that book very specifically was to have the big idea. But everything is to back up the idea. That's the point. The point is to say, well, okay, Mike, you've got this big idea. Justify it.

Well, that's what that book is. Here's the big idea. And here's the justification. That's all. It's just a huge research paper. Right. And boy, is there justification. We end up all the pods asking you some quickfire favorites. So you ready? I'm going to have to, I have no idea what you're going to ask me, but I'm as ready as I'm going to be. Yeah, favorite Vietnamese dish, food dish.

I can't even name it, but it's something with pork and vegetables that I can't name. Oh, isn't it pho is what you eat in Vietnam? Oh, that is the quintessential that is the quintessential american understanding okay i'm glad i could put that in my head yeah uh no there's there's so many names and there's so many varieties but i mean there's this one there's this one street food lady that anthonyourdain made quite famous, and she puts everything you can possibly imagine from pork to vegetables to noodles in this bowl. And I just tend to think that if they served it in the best restaurants in America, the line would be out the door.

Yeah. It's just delicious. All right. I'm coming to visit just for that. Other than your own favorite investing book? I think Jack's books, Jack Schwager's Market Wizard's books. Yeah. I know that sounds maybe trite, but the reality is those first two books,

I mean, especially the first one filled with guys like Ed Sakoda and Larry Height, people that I became friends with, and what Sakoda and Height say in that first book still jump off the page today. What are we, 30 years later, 32 years later, something crazy like that? Yeah. He just came out with a new one, right? Unknown Market Wizards. Yeah. He just came out with a new one, right? Unknown Market Wizards. Yeah. I just talked to him about that. That was a great interview and some great stories in there. Amazing stories, actually. I haven't read it yet. I'm going to have to go read it. Favorite place to travel inside Vietnam? Good question. I was just on a plane the other day. i don't know if i have an exact answer but

i was just on a plane the other day for the first time in a year to a place called the lot in the little mountainous area that i think the french originally made as a retreat it's quite nice quite peaceful it felt like the virgin Virginia countryside or perhaps some parts of West Virginia. I mean, it was kind of pines and it was not tropical at all. It was quite nice. What's the French historical connection? Well, they came over here and colonized the place and caused a lot of problems. And then America, and its infinite wisdom allowed the French to come in and out several times,

especially after World War II, to let the French save face. But ultimately, it's really interesting, even though the French caused a lot of problems, the Chinese caused... I mean, look, Vietnam has been occupied by four different countries in the last 100 years, the last 2,000 years. Chinese, Japanese, French, and Americans.

Yeah. And the Vietnamese really don't have a fondness for the Chinese. I don't hear much. I don't see, I don't hear them speak highly of the french but they sure love the japanese and they sure love us good for once we're on the right side japanese japanese taste and engineering is highly valued in vietnam and and that i love because if the country can ultimately get to japanese taste and engineering then that's that's a positive um favorite turtle trader Japanese taste in engineering, then that's a positive.

Favorite turtle trader? I don't know if you could pick just one. Well, it's Jerry Parker because he's the one that I've got a chance to know the most and talk to the most. But I will say, and he's passed on, that Mike Shannon, who I interviewed for my Turtle Trader book, was the most interesting because I was told when I was doing this whole investigation, and it was, look, I was threatened with loss, not by Jerry, but I was threatened with lawsuits by a lot of people in the turtle world to write that book okay they didn't want that book out uh i had one turtle tell me uh that i was going to be sued if if uh if the if the name was even if this turtle's name was even in the book i was going to get sued

like i was like what what lawsuit what's the predicate for that lawsuit i don't know if i follow that but they were concerned the rules were going to get out there and then their performance wasn't going to be as good. What was their general beef? There was so much secrecy built around it, and I don't know if it was respect for Rich. But this guy, Mike Shannon, I had been told was an interesting guy. And it took me a while to track him down. And I remember doing a call with him. He was living in Australia. And I asked one of those questions that I don't ask often, but I was kind of like, is there anything that I've not asked you about that I should know about that you need to tell me about? One of those questions. He said, oh yeah. Did I tell you I was a criminal? I was the largest Coke dealer in Chicago. And I was working for Rich, and I was an undercover agent for the DEA, and he didn't know.

I was like, I didn't know any of this. Yeah, okay. Good follow-up question. And he's passed away since? Yeah, yeah. I'll tell you a crazy small world story just to show you how small the world is. A young guy in Vietnam. Smaller than Marty Bergen being your baseball coach?

Okay. A young guy that works in Vietnam in his 20s. He listens to my podcast. He finds me. He's working for a Singapore family office that has billions under management. Okay. Interesting. One day, this German owner of this family office is in in

ho chi minh city so the young vietnamese guy takes me to meet his boss we start talking he was friends with mike shannon what the hell i mean you're just like how did that connection right uh and then lastly we'll i'll ask all our guests favorite Star Wars character Yoda Yoda I like it he would have been a trend follower for sure look if you live in Asia like I have for a while

you get a certain Zen mindset and I'd much rather have a Zen mindset than the mindset that I grew up with in the States because if you're going to have a and we haven't talked about this, but that Zen mindset, that philosophical Zen is very much trend following.

Right. Like, hey, the trends are going to happen. Just relax. They'll be here. You don't need to do anything. You don't need to overthink it. I like it. Are you a surfer?

You kind of have a surfer mentality as well in a good way. No. Well, I mean, it depends on what I'm it. Are you a surfer? You kind of have a surfer mentality as well, in a good way. No. Well, I mean, it depends on what I'm surfing. Yeah, surfing the trail. I mean, look, this is the PG conversation, you know, the R-rated conversation. You have to show up in Asia and speak with me in person. Perfect. Over a beer. They have good beer, rightietnamese beer is pretty good there's a you know i i don't drink really anymore but there is a lot of beer drinking in vietnam a lot uh it's it's it's not fun when you do a any kind of event in asia if you're not really drinking because every asian guy from

tokyo to beijing to singapore to Ho Chi Minh City, you go out at night. I mean, it's a competition with brown liquor to see how much you can drink. And I can't drink any. So I have to be very strategic about how I navigate. We've had some of the Chinese partners over and they bring this like just gasoline from there that they want you to drink you're like finding every way i can to throw it over my shoulder hey look i'm not a prude i did my share of growing up drinking everything under the sun but you know just you know you haven't flow with it right now i've it's ebbed out of me so well i'll i'll drink something but the gasoline

is just a little little tough on me um, well, and now that you taught me, I need to ask anything else that I should have brought up or that I need to know, Mike Shannon style? I will say this. Are you an R-rated? This is one that it's not R-rated, but it's going to be for some years. Maybe they'll think, well, that's too much.

I got to tell you, look, when I came to Vietnam, I was single. And I have to tell you that as a guy who grew up, I'm 52, as a guy who was looking at Paulina Porizkova on the front of Sports Illustrated swimsuit issues. Yeah, I remember. Good choice. 82, 83, right? Yeah. And seeing that type of physique. And then to unfortunately, and I think this is part of why we're having such a problem with COVID, with the obesity, to see the expansion in America and then come to a place where, look, I'm a guy, okay? I'm not apologizing for that. But to come to a place where I can see the feminine form more like Paulina, that's a real, that's a game changer in life. Because it's not the same in America anymore. It's changed. And I don't think it's, I would love to see it change back. I would

love to see us go the other way. And I'm not just picking on ladies. Obviously, obesity is an equal opportunity employer in America, men and women, of course. But again, I'm just- I don't think COVID helped that. I put on about 10 pounds during COVID because you're constantly grazing through the kitchen. I put it on and then I've lost 30 pounds since May. Wow, good. But anyways, I do think that the beauty- And so your eyes were open seeing all these beautiful Vietnamese women, and then you met a Vietnamese woman.

You said you're not married yet. Right. Yeah, the beauty part is really – and there's a – I don't know if the beauty is also related to just a physical appearance. There's a – There's a different attitude. There's a softness, a kind of a tradition. It's just very different than America. And it feels older.

Like, you know, so you could talk to somebody, you could talk to a woman who's 25, 35, 45, and their mentality, they might not look, they might look absolutely drop-dead gorgeous, but their mentality is like grandma. Their thinking is older. It's interesting. As soon as this lockdown ends, we'll come visit.

Nobody from America will come visit. Only a handful. Because when you have to stop and think about it, you're like, hold on. Mike is probably crazy. That's what makes me want to visit. He's in a communist country. We had a war there. Spike Lee just made a film that says there's landmines and machine guns everywhere. Yeah. So people might listen and say, I'm going to go, but then they're not going to go. But it's still become, Before COVID, it was growing as a tourist destination, right? I knew

some people who'd been there. It's pretty rare, to be honest with you. It's pretty rare. It's very unusually rare to me because when you're here, you're like, wow. If most Americans could experience this, they would be floored.

I'm done. I'm done. I'm in. All right, Mike. Well, enjoy your day. It's your 9 a.m. evening here, but enjoy your day. We'll have a good night and we'll talk to you soon. Thanks so much for being on. Hey, thank you.

Take care. This was fun. Let us know when you write your next book. It's coming soon. Nice. What's it about? We didn't talk about that. Trend Following Mindset. It actually is a book based on my podcast interviews with Tom Basso because he really helped to launch my podcast. Perfect. All right. I love it. All right. We'll look forward to it. Thanks, Mike. We'll talk to you soon. Take care. All right. Links from this episode will be in the episode description of this channel. Follow us on Twitter at RCM Alts and visit our website to read our blog or subscribe to our newsletter at RCMAlts.com. If you liked our show, introduce a friend and show them how to subscribe.

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