Eric on Trend Following with Michael Covel – October 2020

Eric, CIO of Standpoint, joins Michael Covel on his thought-provoking podcast. Eric covers financial topics by sharing analogies and Michael shares stories that support their common understanding of investing. They discuss psychology, trading systems, and the effort it takes to use data correctly. Towards the end of the episode, Eric and Michael talk about how a 6% return from bonds or a savings account no longer exists and that in no other time in history have they seen such a dismal outlook for fixed income investments.

Key Takeways

  • It’s unrealistic for investors to do the work to become an expert systematic investor. Investors should be relying on the specialists who have dedicated their lives to building solid investment approaches.
  • A trend-following investment strategy is a lot like the venture capital industry in that not all bets payoff, but the few that do can make it profitable.
  • Eric and Michael believe that using a standardized, disciplined process as an investment strategy is more practical, profitable, and realistic than trying to understand the fundamentals of any market.
    • If you go out and get Tom Basso to be the Chairman of your firm, you kinda know what’s up.

      - Michael Covel, Host of Trend Following Podcast

    • If you believe in the stock market, which for most people they define that as the S&P 500 or the Russell 3000, they already believe in a trend following system.

      - Eric Crittenden, Standpoint

Important Disclosures

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