I spent part of this week at the First Rate Performance Conference. It was held at the Four Seasons resort in Las Colinas, Texas (which is a pretty nice place for a retreat).
In addition to hearing industry experts and company representatives talking about equations, risk management, and regulatory compliance, the conference featured Terry Hershey, who wrote a book called The Power of Pause (Becoming More by Doing Less).
In the book, Terry counters the modern cultural decree of More-Bigger-Faster. His message was simple (and perhaps even easy).
One of the takeaways was that some things are tactical, some things are strategic, and some things are transformational. All of these things can be good ... but the quality of your life and the results results you get change as you spend less time with the tactical and move towards the transformational.
Hershey is a story-teller. Here is one of them:
A teacher gave her class an assignment to name the seven wonders of the world.
Each student came up with a list and shared with the class. As you might guess, students called out entries like the Pyramids, the Amazon River, the Grand Canyon, or the Taj Mahal. The teacher cheered them on and told them what a great job they were doing.
But one girl stayed silent. The teacher asked her about her list, and the girl answered, "I don't think I understand the assignment."
"Why?"
"I don't have any of the right answers."
"Well, why don't you tell us which you wrote on your paper, and we'll help you."
"Okay," said the girl, "I think the seven wonders of the world are ... to see, to hear, to touch, to smell, to feel, to love, and to belong."
Somewhere along the way, we tend to forget what we used to know.
How much of our daily experience is defined by what we shoot for and what we measure?
Life can be so "daily". That's a problem, isn't it? No wonder we're easily tempted by things that are urgent, rather than important. But it doesn't have to be that way ... and the first step is recognizing that it doesn't have to be that way. The second step is figuring out how you want it to be instead.
To see some of his messages in video format, click this link.
Michael Covel's Trend Commandments
Michael Covel was the keynote speaker at this year's Market Technicians Association Annual Symposium.
Covel has made a name for himself as a chronicler of the Turtle Trading experiment and an outspoken proponent of trend following. Here is a photo of him and me at the Symposium.
Truth be told, I often sit through presentations at a trading conference feeling skeptical, and looking for an idea that rings true or at least seems worth investigating further.
This was much better than that.
Covel claims that market profit is about the right mentoring and practice, not genetic gifts, inborn talents, or Asperger's memory brilliance. You simply need a winning philosophy and strategy, backed by proven positive results that you can execute.
Unlike some industry experts who hint at elusive secrets, Covel's unabashedly open about what he believes works and the things that he's learned from winning traders. He also sprinkles in wisdom from the ages, like this quote from the ancient Greek trend follower, Epictetus.
The audience at an MTA event is filled with an impressive group of people ... you'll meet portfolio managers, strategists, analysts, quants, and traders who rely on technical analysis. Talk of oscillators, histograms and regression testing fills the air. So, it was refreshing to hear Covel challenge the room. Covel loves to poke technicians who talk about quant trading; he claims that systematic trend following is the only quant strategy that actually works.
He said that what he does is real technical analysis because despite what anyone else thinks, he's skeptical that any of the complex strategies being discussed consistently beats the technique he's talking about. The proof, he says, is in the evidence. In this case, it's the detailed trading records of dozens of systematic trend traders who have produced consistent results that dramatically outperform the markets, year-in-and-year-out for decades.
Simple Is Often Better.
If you asked someone who builds trading systems to describe a trading system, they'd probably focus on inputs and technique (e.g., what indicators does it use; is it a momentum strategy; does it seek to profit from artbitrage, reversion to the mean; does it use a simple crossover technique?). In contrast, Covel starts with a proverb:
Going a little deeper, Covel says a system should confidently deal with these questions.
However, he cautions that trend following starts with knowing when to do nothing. If the market is screaming like a spoiled brat ... Step to the side. That’s your first play. Cash is a legitimate position.
Learning More.
Covel is an engaging speaker and writer. In addition to the keynote, I had an opportunity to sit down with him and have a real conversation. I'm happy to say that he has a terrific grasp on trading, traders, and an interesting perspective on what works.
As a result of our conversation, I bought a copy. Since I had already read several of his other books, including Trend Following and The Complete Turtle Trader, I didn't expect much new information. However, just as he promised, this book has a different tone and is chock-full of insights and tradable ideas.
If your're curious, here's my post on his earlier books.
Covel offers an interesting collection of Podcasts. Click here to check them out.
Sounds good.
Posted by Howard Getson at 01:19 PM in Books, Ideas, Market Commentary, Trading, Trading Tools | Permalink | Comments (0) | TrackBack (0)
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