#21 - Michael Covel - "We Can't Make a Prediction Worth a Damn"

64 minutes

Episode 21 starts with a “thank you” to Michael, as it was his advice on starting a podcast that got “The Meb Faber Show” off the ground. But Michael and Meb quickly turn to Michael’s expertise, trend following. This is how Michael summarizes it: “We don’t know what’s going to happen. We can’t make a prediction worth a damn. The market starts to move, whatever that market might be. We get on board, and we don’t get out until it goes against us and we have an exit signal.” They then turn to the infamous “turtle” story. It involves Richard Dennis, a great trader from the 1970’s, who made his first million by about age 25. By the early 80’s, he was worth about $200 million. Around this time, the movie “Trading Places” came out (two millionaires make a bet on the outcome of training a bum to be a financial whiz, while taking a financial whiz and, effectively, turning him into a bum). Richard felt he could similarly train a financial no-nothing, turning him into a great trader. Richard’s partner felt it wouldn’t work. So they made a bet. How’d it turn out? Three or four years later, the group Richard trained had made, on aggregate, around $100 million. Meb then suggests that a profitable strategy such as trend following, that seems to work, should attract lots of investor dollars in the long run. So why then doesn’t trend following have more “big money” institutional investors using it? Michael points toward drawdowns – “the scarlet letter of trend following” – even though buy-and-hold has plenty of drawdowns too. The guys then agree that all investing is purely speculation. We like to believe there’s more certainty, but that’s not the case. They then bring up a quote from Ed Seykota: “Win or lose, everyone gets what they want out of the market. Some people seem to like to lose, so they win by losing money.” Michael tells us this is true not only for investing, but life as well. Next, Meb asks about Michael’s podcast, which results in a great recap of how Michael got started and how he grew it to be the success it is today. The guys then discuss the mass of great investing content out there, for example, the hours of great interviews from Michael’s podcast—where is a new listener supposed to start? It’s overwhelming. Michael gives us his thoughts. This leads to Meb’s latest entrepreneurial business idea (which some listener should run with and make lots of money). There’s plenty more, including the guys touching on sensory deprivation, yoga/meditation, and of course, what each of them find beautiful, useful, or downright magical – Michael has about seven for us. What are they? Find out in Episode 21.

More episodes from The Meb Faber Show

#233 - Lisa Rich, Hemisphere Ventures, Xplore - Opening Up The Door For Access To Space

In episode 233 we welcome our guest, Lisa Rich, managing partner of Hemisphere Ventures and founder and COO of Xplore. In today’s episode, we’re talking about tech and the front lines of …

#232 - Luis Perez, Remoov - We’re Removing That Headache And We’re Giving You That Piece Of Mind And Your Space Back

In episode 232 we welcome our guest, Luis Perez, Founder of Remoov. In today’s episode, we’re getting organized. We’re talking about taking the work off your hands of removing all of that …

#231 - Julian Klymochko, Accelerate Financial Technologies - The Democratization Of Alternatives, It’s Happening, But It’s Something That Does Not Happen Overnight

In episode 231, we welcome our guest, Julian Klymochko, founder and CEO of Accelerate Financial Technologies. In today’s episode, we’re talking …

#230 - Ryan Lupberger, Cleancult - There’s No Other Brand On The Market That Can Sit On Shelves And Be Zero Waste

In episode 230 we welcome our guest, Ryan Lupberger, Co-Founder and CEO of Cleancult. In today’s episode, we’re talking cleaning. Sustainable …

#229 - Evan Brandoff, LeagueSide - There’s No Better Way To Engage With Families In The Community Than Through Youth Sports

In episode 229 we welcome our guest, Evan Brandoff, Co-Founder and CEO of LeagueSide. In today’s episode, we’re talking about targeted, local marketing through youth sports organizations.

Cambria Fund Profile Series – Cambria Tail Risk ETF (TAIL)

In today’s episode of the Cambria Fund Profile Series, Meb discusses the Cambria Tail Risk ETF (TAIL).

Meb walks through the S&P 500’s move from it’s all time high on February 14th 2020 …

How you can listen to this podcast

You can listen to episodes right here on the website, or if you prefer, in a podcast app. Listening in an app makes it easier to keep track of what you’ve already heard, listen without using your data plan and many other conveniences.

Recommended apps
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56