Shows
The Meb Faber Show - Better InvestingMichael Melissinos - Mastering the Art of Trend-Following | #534Today’s guest is Michael Melissinos, founder of Melissinos Trading, an investment firm that employs a systematic trend-following approach.In today’s episode, Mike shares his journey into trend following and his approach to trading. He emphasizes the importance of removing biases and opinions when observing trends and executing trades. We get into the nuances of trend following, sticking to a trading system, and much more.
(0:00) Introduction of guest Mike Melissinos and his journey into trend following
(6:08) Jumping into trend following
(10:07) Implementation and execution of trend following strategies, with emphasis on risk management
(14:19) Deciding what markets to t...2024-05-2441 min
Whipsawed66: Review of the Markets - Coronavirus Curveball EditionMike Melissinos is back from a long podcasting break to review the markets - stocks, bonds, commodities and currencies. There's a lot happening right now with a possible looming recession, government bond yields going back to all-time lows and the recent Coronavirus outbreak in China.
Mike gives a 30,000ft view of each of the major asset classes, his favorite markets and stocks. In the episode, he discloses a number of his current positions so as to not "talk his book" without being transparent.2020-02-1300 min
Whipsawed66: Review of the Markets - Coronavirus Curveball EditionMike Melissinos is back from a long podcasting break to review the markets - stocks, bonds, commodities and currencies. There's a lot happening right now with a possible looming recession, government bond yields going back to all-time lows and the recent Coronavirus outbreak in China.Mike gives a 30,000ft view of each of the major asset classes, his favorite markets and stocks. In the episode, he discloses a number of his current positions so as to not "talk his book" without being transparent. This is a public episode. If you would like...2020-02-1337 min
Whipsawed65: Over-Optimizing Your Investing Approach Leads to DeathWe see pickiness permeating across society today. We don't like being wrong or feeling dumb. We think we can prepare for every little thing that comes our way. MLB teams are experiencing the pitfalls of over-optimization. Instead of giving batters as many at-bats as possible, they optimize for how each batter does versus the opposing pitcher while also considering the game is home or away, day or night, recent performance, and so on. When you consider all of these factors, the sample size decreases. This makes the decision less robust and you more likely to experience something "unexpected". Well...2019-11-2109 minWhipsawed65: Over-Optimizing Your Investing Approach Leads to DeathWe see pickiness permeating across society today. We don't like being wrong or feeling dumb. We think we can prepare for every little thing that comes our way. MLB teams are experiencing the pitfalls of over-optimization. Instead of giving batters as many at-bats as possible, they optimize for how each batter does versus the opposing pitcher while also considering the game is home or away, day or night, recent performance, and so on. When you consider all of these factors, the sample size decreases. This makes the decision less robust and you more likely to experience something "unexpected". Well...2019-11-2100 min
Whipsawed64: Hold Your Investment Manager AccountableAsk questions to learn how your manager and his or her strategy makes decisions each day. It's important to learn about how the strategy is going to behave before you invest in it. You cannot expect to know how it will perform since that is largely up to the markets, and we cannot control them. But we can learn about how the strategy makes decisions in its initial design and in a variety of different situations. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus...2019-11-2011 minWhipsawed64: Hold Your Investment Manager AccountableAsk questions to learn how your manager and his or her strategy makes decisions each day. It's important to learn about how the strategy is going to behave before you invest in it. You cannot expect to know how it will perform since that is largely up to the markets, and we cannot control them. But we can learn about how the strategy makes decisions in its initial design and in a variety of different situations.2019-11-2000 minWhipsawed63: Current Sentiment of the Stock MarketBearishness across the board in a number of sentiment surveys and indicators.2019-09-1000 min
Whipsawed63: Current Sentiment of the Stock MarketBearishness across the board in a number of sentiment surveys and indicators. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-09-1012 minWhipsawed62: Priorities of a Fund ManagerCommunicate well, especially the value proposition and generate performance. Done.2019-08-2700 min
Whipsawed62: Priorities of a Fund ManagerCommunicate well, especially the value proposition and generate performance. Done. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-08-2714 minWhipsawed61: Two Major Risks of Index Funds...concentrated risk in one asset class and poor loss-control tactics.2019-08-1600 min
Whipsawed61: Two Major Risks of Index Funds...concentrated risk in one asset class and poor loss-control tactics. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-08-1622 minWhipsawed60: For the Love of ItSome get the result they want, and stop working. Those in for the love, never stop regardless of the results they get - but they tend to get the best results.2019-08-0800 min
Whipsawed60: For the Love of ItSome get the result they want, and stop working. Those in for the love, never stop regardless of the results they get - but they tend to get the best results. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-08-0805 minWhipsawed59: Improvements Don't Always Work“Improving” the strategy typically serves as a self-correcting mechanism to remind the manager to stick to his/her philosophy and strategy, not to change it or “adapt” it every time s/he runs into some losses.2019-08-0100 min
Whipsawed59: Improvements Don't Always Work“Improving” the strategy typically serves as a self-correcting mechanism to remind the manager to stick to his/her philosophy and strategy, not to change it or “adapt” it every time s/he runs into some losses. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-08-0113 min
Whipsawed58: Do You Care What We Call Ourselves?A blind taste test between two investments. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-07-2908 minWhipsawed58: Do You Care What We Call Ourselves?A blind taste test between two investments.2019-07-2900 minWhipsawed57: Streakiness and Big KillsThere’s a tremendous amount of inconsistency and streakiness that occurs in the markets.
Great investors do their best to survive and focus between big kills and have the ability to take the shot when they come along.2019-07-2500 min
Whipsawed57: Streakiness and Big KillsThere’s a tremendous amount of inconsistency and streakiness that occurs in the markets.Great investors do their best to survive and focus between big kills and have the ability to take the shot when they come along. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-07-2505 minWhipsawed56: Don't Hit the SnoozeAll it takes is missing one big winner and/or holding a loser just a little too long to derail our investing results.2019-07-2200 min
Whipsawed56: Don't Hit the SnoozeAll it takes is missing one big winner and/or holding a loser just a little too long to derail our investing results. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-07-2205 minWhipsawed55: From Seed to YieldOne seed = one opportunity.
Many seeds = many opportunities.2019-07-1700 min
Whipsawed55: From Seed to YieldOne seed = one opportunity.Many seeds = many opportunities. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-07-1705 min
Whipsawed54: In the FoxholeHaving skin in the game makes for a better fund manager. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-07-1505 minWhipsawed54: In the FoxholeHaving skin in the game makes for a better fund manager.2019-07-1500 min
Whipsawed53: "Hey Man, Whatever Works."Two things investors are always going to want: to make more money and suffer less drawdowns. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-07-1213 minWhipsawed53: "Hey Man, Whatever Works."Two things investors are always going to want: to make more money and suffer less drawdowns.2019-07-1200 minWhipsawed52: Risk Comes Fast - General ElectricRomanticizing about a stock clouds judgement.
General Electric, once a darling of the Dow and pillar of innovation, has become a shell of itself. It has lost over two-thirds of it’s value over the last few years and ~85% since 2000.2019-03-1200 min
Whipsawed52: Risk Comes Fast - General ElectricRomanticizing about a stock clouds judgement.General Electric, once a darling of the Dow and pillar of innovation, has become a shell of itself. It has lost over two-thirds of it’s value over the last few years and ~85% since 2000. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-03-1215 minWhipsawed51: Comparing the Worst Periods of Trend Following to Buy-and-Hold Index FundsArticle: http://www.melissinostrading.com/investment-strategy/comparing-the-worst-periods-of-trend-following-to-buy-and-hold-index-funds/2019-02-1300 min
Whipsawed51: Comparing the Worst Periods of Trend Following to Buy-and-Hold Index FundsArticle: http://www.melissinostrading.com/investment-strategy/comparing-the-worst-periods-of-trend-following-to-buy-and-hold-index-funds/ This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-02-1315 min
Whipsawed50: Possessed by ProcessThis is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-01-2521 minWhipsawed50: Possessed by Process2019-01-2500 min
Whipsawed49: Sometimes Kids Leads the WayPart 1) Derek Notman of Intrepid Wealth Partners and I co-write article on Trend Following.Link: http://www.intrepidwealthpartners.com/blog/trend-followingPart 2) An inspirational story of a kid trying to buy a computer goes out into the snow to make some money.Story from the young fella's dad: https://twitter.com/jackmurphylive/status/1084456663074131969 This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2019-01-1709 minWhipsawed49: Sometimes Kids Leads the WayPart 1) Derek Notman of Intrepid Wealth Partners and I co-write article on Trend Following.
Link: http://www.intrepidwealthpartners.com/blog/trend-following
Part 2) An inspirational story of a kid trying to buy a computer goes out into the snow to make some money.
Story from the young fella's dad: https://twitter.com/jackmurphylive/status/10844566630741319692019-01-1700 minWhipsawed44: White Squall2018-10-1600 min
Whipsawed44: White SquallThis is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2018-10-1610 minWhipsawed43: Are Your Investments Too Concentrated?Yesterday's stock market sell-off presents a nice entry point for us to review our investments.
Are we diversified?
Are we too concentrated in tech stocks or large cap names?
Might we reconsider re-balancing into some other non-US stocks, or different industries or different strategies in general?
Do we have too much invested into the passive buy and hold strategy?
Might it be a good idea to look at other strategies to invest in so we can improve our long-term performance ride?
These questions and more give us...2018-10-1200 min
Whipsawed43: Are Your Investments Too Concentrated?Yesterday's stock market sell-off presents a nice entry point for us to review our investments.Are we diversified?Are we too concentrated in tech stocks or large cap names?Might we reconsider re-balancing into some other non-US stocks, or different industries or different strategies in general?Do we have too much invested into the passive buy and hold strategy?Might it be a good idea to look at other strategies to invest in so we can improve our long-term...2018-10-1212 minWhipsawed42: Three Questions to Ask InvestorsThis one dovetails off of the "How We Work With Investors" episode.
I believe in taking a thorough approach to learning about the investor, their risk tolerance and philosophy when it comes to not just investing, but life in general.2018-10-0900 min
Whipsawed42: Three Questions to Ask InvestorsThis one dovetails off of the "How We Work With Investors" episode.I believe in taking a thorough approach to learning about the investor, their risk tolerance and philosophy when it comes to not just investing, but life in general. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2018-10-0917 minWhipsawed41: Lessons Learned from Italian WinemakersOn my recent trip to northern Italy, my wife and I went on a two-day wine tour.
I asked a lot of questions.
I wanted to learn about the winemaking process and draw parallels back to investing.
Needless to say, they share a lot of similarities.
The big question I asked: What percentage of making good wine are you, the winemaker, responsible for?
I wanted to learn if the weather, soil and other elements out of their control was mostly responsible for the taste in good wine.2018-10-0300 min
Whipsawed41: Lessons Learned from Italian WinemakersOn my recent trip to northern Italy, my wife and I went on a two-day wine tour.I asked a lot of questions.I wanted to learn about the winemaking process and draw parallels back to investing.Needless to say, they share a lot of similarities.The big question I asked: What percentage of making good wine are you, the winemaker, responsible for? I wanted to learn if the weather, soil and other elements out of their control was m...2018-10-0325 min
Whipsawed40: How We Work with InvestorsIn this episode, I outline my method for how I like to work with investors.It doesn't always work.There's the occasional bump in the road (investors want to add in when recent performance is hot and sell out when I've been losing; they forget the benefits of adding a strategy like mine in their portfolio in the first place; they forget the general performance behavior of trend following - namely, when it does and doesn't do well) but it has served me well in my short career so far.2018-09-1226 minWhipsawed40: How We Work with InvestorsIn this episode, I outline my method for how I like to work with investors.
It doesn't always work.
There's the occasional bump in the road (investors want to add in when recent performance is hot and sell out when I've been losing; they forget the benefits of adding a strategy like mine in their portfolio in the first place; they forget the general performance behavior of trend following - namely, when it does and doesn't do well) but it has served me well in my short career so far.
My goal: shift...2018-09-1200 minWhipsawed39:Lost Knowledge is Real2018-09-0300 min
Whipsawed39:Lost Knowledge is RealThis is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit mikemelissinos.substack.com2018-09-0309 minWhipsawed38: What I Learn from FortniteOur behavior transcends our current setting.
How we invest is how we eat, how we are in relationships, how we work, etc.
Trend Followers don't limit their philosophy to one area. In all likelihood, they go with the flow, ride winners, cut losses and care a lot about survival in every facet of their lives.
http://www.melissinostrading.com/markets/episode-38-what-i-learn-from-fortnite/2018-08-2600 minWhipsawed37: NYC Trading Tribe - Notice Your PatternsOn this episode I talk about my recent experience in the NYC Trading Tribe.
For those unfamiliar, I lay out the premise of Tribe before I get into it.
Specifically, I talk about my behavioral pattern of shyness - missed opportunity - frustration. For much of my life, this pattern has occured over and over again.
In Tribe, with the help of the guys, I go to work on my feelings, find the positive intention then replace my medicinal behaviors with proactive ones.
Since the Tribe meeting, things have been happening t...2018-08-2000 minWhipsawed36: Markets Were Choppy Back in the Day TooMarkets go through long periods of choppiness – often long enough for us to think that it’s the new normal.
Markets can trend for a long period of time and we feel the same way.
There have been many other instances in many other markets where they chop – trend – chop – trend.
Markets today are no different than they were back in the day.
http://www.melissinostrading.com/markets/markets-dont-get-choppier-over-time/2018-08-1300 minWhipsawed35: Flowers and Trend FollowingYou care for your garden in a similar manner you do your trend following portfolio.2018-08-0700 minWhipsawed34: Jerry Parker Interview #1 with Mike MelissinosJerry Parker needs no introduction. He's been running a successful trend following firm, Chesapeake Capital, since the 1980's.
Today, we talk about a number of different things including:
1) Winton Capital "stepping away" from trend following
2) Morningstar's study on fund manager performance
3) The Dr. Copper myth
4) Earnings growth vs. stock market returns
We plan on having these discussions every so often when we come across articles we like and when important market events occur.2018-08-0100 min
Whipsawed34: Jerry Parker Interview #1 with Mike MelissinosJerry Parker needs no introduction. He's been running a successful trend following firm, Chesapeake Capital, since the 1980's. Today, we talk about a number of different things including:1) Winton Capital "stepping away" from trend following2) Morningstar's study on fund manager performance3) The Dr. Copper myth4) Earnings growth vs. stock market returns We plan on having these discussions every so often when we come across articles we like an...2018-08-0148 minWhipsawed33: Gary Antonacci Interview with Mike MelissinosToday, I talk to Gary Antonacci, author of Dual Momentum Investing: An Innovative Strategy for Higher Returns with Lower Risk.
Gary has over 40 years of investing experience, holds an MBA from Harvard.
He also found, invested and worked with a few investing legends when they were relatively unknown – Paul Tudor Jones (billionaire fund manager), John W. Henry (billionaire fund manager, owner of Boston Red Sox) and Richard Dennis (incubated the famous Turtle traders).
Gary has been a guest on many other well-known podcasts, including Michael Covel’s and Meb Faber’s shows. On their...2018-07-1300 min
Whipsawed33: Gary Antonacci Interview with Mike MelissinosToday, I talk to Gary Antonacci, author of Dual Momentum Investing: An Innovative Strategy for Higher Returns with Lower Risk.Gary has over 40 years of investing experience, holds an MBA from Harvard.He also found, invested and worked with a few investing legends when they were relatively unknown – Paul Tudor Jones (billionaire fund manager), John W. Henry (billionaire fund manager, owner of Boston Red Sox) and Richard Dennis (incubated the famous Turtle traders).Gary has been a guest on many other well-known podcasts, including Michael Covel’s and...2018-07-1346 minWhipsawed32: Is Trend Following’s Lost Decade Over?2018-07-0400 min
Whipsawed31: Derek Notman, CFP Interview with Mike MelissinosDerek Notman, CFP, is a financial advisor from Madison, Wisconsin. His firm is Intrepid Wealth Partners.Derek recently discovered trend following and is starting to educate his clients on the benefits of adding it to their portfolios.Today, we talk about:- how he discovered trend following (Michael Covel's books, a personal mentor and The Way of the Turtle book)- how he educates and works with his clients- how trend following and entrepreneurship are closely related and...2018-07-0259 minWhipsawed31: Derek Notman, CFP Interview with Mike MelissinosDerek Notman, CFP, is a financial advisor from Madison, Wisconsin. His firm is Intrepid Wealth Partners.
Derek recently discovered trend following and is starting to educate his clients on the benefits of adding it to their portfolios.
Today, we talk about:
- how he discovered trend following (Michael Covel's books, a personal mentor and The Way of the Turtle book)
- how he educates and works with his clients
- how trend following and entrepreneurship are closely related and
- the "right" allocation amount to trend following...2018-07-0200 minWhipsawed30: Hedge Funds vs. the S&P 5002018-06-0500 minWhipsawed29: John Wooden and Focusing Only on ResultsThe only thing Wooden cared about was focusing on things within his control and doing them to the best of his ability. He didn’t care or worry about things outside of his control, including winning. He actually believed winning was outside of his control. Remember, this is a guy who’s won more national titles than anyone.
https://medium.com/@mmelissinos/john-wooden-and-focusing-only-on-results-9eb3c2971bec2018-05-2700 minWhipsawed28: Trends Have TrendsEvery investment strategy experiences winning and losing streaks. They all take turns at the front and back of the line. Trend following has been sitting near the back of the line for the past 5-10 years, while stocks sit near the front.
Trend following performance derives from the aggregate trends of all the markets within the portfolio, not just one or two markets or sectors. Over the past few years, performance struggles as choppiness from other major asset classes weigh down positive performance from stocks.This, while annoying, can happen from time to time. The...2018-03-2600 minWhipsawed27: A Trend Follower’s Secret Weapon Makes a ComebackFor the past 5–10 years, trend followers have had to deal with a double-whammy — poor markets and no interest on excess cash. However, it appears at least one of those is changing for the better.
Interest rates are rising.
Today, the 3-month T-Bill yields ~1.75%. Even though this is pretty low on a historic basis, this is a welcoming sign given it sat near zero percent from 2009–2016.
https://medium.com/@mmelissinos/a-trend-followers-secret-weapon-makes-a-comeback-fc3e064c3c292018-03-2100 minWhipsawed26: Opportunity in Commodities?The following factors make me bullish on commodities:
1) Multi-year congestion
2) Low volatility
3) A rolling Sharpe Ratio near historic lows and most importantly...
4) New price breakouts.
https://medium.com/@mmelissinos/opportunity-in-commodities-d0281fca3ece2018-03-1700 minWhipsawed25: A Storm’s a Brewin’ in U.S. Government BondsI believe the bond market presents the most intriguing opportunity for trend followers right now.
We’ve gone through an unprecedented time of low interest rates since 2008 and now that trend appears to be reversing. This trend may have more fuel than others given the extremely low volatility and overall feeling of complacency.
Long-only bond funds, especially ones that use volatility to size their risk, have built up massive positions so any uptick in volatility or reversal of trend might trigger a mass exodus — kind of like what we saw in stocks and volatility-related instruments a couple...2018-02-2300 minWhipsawed24: An Update on Precious Metals2018-01-3100 minWhipsawed23: Rising Interest Rates: An Opportunity For Trend Followers?The Fed appears committed to rising rates as long as the economy and inflation cooperate. Some people in the investing community have raised concerns that trend followers will not be able to perform as well when interest rates rise due to the negative carry when holding short positions in bond futures. They believe the main reason trend followers have performed so well since the early 1980’s is because they rode the long side of the massive bond price trend. And if that gets taken away then trend followers lose their golden goose and won’t perform well.
Their...2018-01-0900 minWhipsawed22: The Bitcoin Bubble in PerspectiveI’ve been receiving lots of texts and calls from friends, and people I haven’t heard from in a while, regarding Bitcoin — what my general thoughts are; whether to buy it or stay away; is it in a bubble or not?
So I thought it’d be a good idea to take a look at some of the biggest bubbles over the past 40 years. We’ve seen bubbles in may different asset classes — stocks, agriculture, metals and energy.
I’m sure there are few I’m missing, but this is just to put Bitcoin’s current price action in...2017-12-2200 minWhipsawed21: Superordinate Goal - The Manager & Investor RelationshipIn psychology, superordinate goals refer to goals that require the cooperation of two or more people or groups to achieve, which usually results in rewards to the groups.Good investing requires a good system, good markets and discipline.
Often enough, it's the discipline part that ruins us. In my experience, there's many different systems that make money and, sure, markets can suck for a while but they eventually come around.
Maintaining discipline is very tough to maintain over time. When you throw investors, employees and family into the mix it becomes that much toug...2017-12-1200 minWhipsawed20: Questions That Don't Matter"How much money have you made?""Where did you get in?"People think these questions are important because they stimulate hopeful feelings of celebration (we've made a lot) and intelligence (we got in before others were talking about it).
But these questions don't have anything to do with doing the right thing today.2017-12-0700 minWhipsawed19: It's Not If But WhenRisk is like gravity — it always there, but you don’t always feel or see it.
Today, we’re in between market storms. People have become more and more comfortable and complacent during the 8-year bull market. The relatively painless uptrend has lulled people into a false sense of security.
Even Janet Yellen says she doesn’t believe there will be another financial crisis in our lifetimes.
Collectively, we’re getting used to the way things have been recently — rising stock prices, low and declining volatility and little to no need for protection investments like hed...2017-11-1400 minWhipsawed17: The Occasional MistakeAll fund managers have a system. Some have it in their gut and head while others code it into a computer. After coming to terms with a system, the manager must follow it religiously in order to maximize results and perform within investor expectations.
I believe the main reason why benchmarks outperform managers is due to their lack of discipline.
Medium post: https://medium.com/@mmelissinos/the-occasional-mistake-b1d02926fb952017-09-1300 minWhipsawed16: Warren Buffet's Worst Loss Came During the Dot-Com BubbleBuffett suffered a 49% loss from Jun 1998 to Mar 2000. At the same time, the NASDAQ rose 140% and SP500 rose 28%. Despite heavy losses and public ridicule, Buffett stuck to his guns and wouldn’t touch internet stocks. Buffett’s ability to stay disciplined might be more admirable than his analytical skill.
At the time, I’m sure people were wondering if Buffett had lost his golden touch or if he would ever outperform the market again. A near 50% loss for a stocks investor during the biggest bull market in history doesn’t inspire confidence. But he had the last laugh af...2017-08-1800 minWhipsawed15: The Risks of Copying OthersAs a copier, you cement your position of always following the crowd and competitors.
You forgo understanding how the product you’re copying actually works; the reasons behind it’s design; the problems it addresses; why it performs the way it does.
You blindly put your faith in the person or product you’re copying and, thus, give up your ability to develop and monitor expectations.
http://www.michaelmelissinos.com/blog/copying-skips-understanding/2017-08-1500 minWhipsawed14: Half vs. Half-Assed ProductReduce the rules in your investing strategy to make it more robust and easier to execute.
We all hear that simple is better; that complex doesn’t work as well and is harder to execute over the long run. Complex rules tend to promote confusion and second-guessing – things that can wreak havoc on any investing strategy.
Investors insist on making things too complicated. Many even believe that simple rules cannot make money over the long run; that the only way to win is be some kind of genius math whiz or have super-human intuition. No. No...2017-08-0800 minWhipsawed13: Bill Belichick on Doing Your JobWhen you take the road less traveled, you hear a lot of negative chatter from others and from yourself when you don’t perform well. But winners don’t give in or tell people what they want to hear; they stick to the process instead.
If you watched the Super Bowl, you saw two games — one where the Patriots sucked and one where they could do no wrong. The Patriots, unlike the Falcons, didn’t panic when the game wasn’t going their way. They stuck to their game plan and the rest is history. Bill Belichick (head coach of...2017-08-0100 minWhipsawed12: Make a Big Kill Every Once in a WhileApex predators don’t succeed all that often. Tigers succeed only 5% of the time; Polar bears 10% and Leopards 14%. All they need is one big kill every once in a while to stay atop the food chain.
Tigers, lions and other predators know their game. They balance persistence and knowing when to quit; hunting only for the home-run and conserving energy.
Investing is no different.
Trend traders lay low most of the time; expending little energy while waiting for a big trend to emerge. Most of the time, like lions and other predators, we come...2017-07-2400 minWhipsawed11: CyclesEmbrace cycles and use them to your advantage. Pretending they don’t exist and attempts to eliminate the part of the cycle you don’t like, the losing streak, doesn’t work.
The investing world doesn’t like cycles. It prefers investment strategies that produce consistent profits with little variation. I believe the collapse in interest rates intensifies this desire for consistent profits. One problem with investing in such strategies is that they’re likely curve-fit to the current market environment.
In the short-term, they can do no wrong; nailing the timing on every trade – buying botto...2017-07-1700 min
Whipsawed10: Why I Choose LeanPrioritize returns and educating investors. Have the ability to think and execute without distractions. Build rapport with current and prospective investors. Say what you have to say, not what you think others want to hear. Tell the truth no matter what.I speak out about running a small and more importantly a lean operation in an industry where you’re not seen as “cool” unless you manage +$100M in assets and have a staff of PhD’s and MBA’s. I’m not opposed to managing a high level of assets, but only if it means I get...2017-07-1322 minWhipsawed10: Why I Choose LeanPrioritize returns and educating investors. Have the ability to think and execute without distractions. Build rapport with current and prospective investors. Say what you have to say, not what you think others want to hear. Tell the truth no matter what.
I speak out about running a small and more importantly a lean operation in an industry where you’re not seen as “cool” unless you manage +$100M in assets and have a staff of PhD’s and MBA’s. I’m not opposed to managing a high level of assets, but only if it means I get to focus...2017-07-1300 minWhipsawed9: AQR Paper on Trend FollowingAQR updates their paper from a few years ago on Trend Following performance over the past 100+ years.
They highlight that performance since 2010 has been the worst stretch in the backtest. The main reason for this has been an increase in correlation between many different markets. When correlation increases, trend followers cannot follow and profit from many different trends.
Over the past eight years or so, correlation has increased severly. They notice that high correlation environments tend to hurt Trend Following performance and it thrives in low correlation environments.2017-07-1000 minWhipsawed8: A Trend Reversal in Interest Rates?Across the globe, bond prices are declining. From Australia to Europe to the USA, prices are sitting and/or rolling over towards 52-week lows.
Could this be the beginning of a major reversal in interest rates? Who knows, but investors have to prepare just in case.
Investors who have profited and gotten used to the 30-year bull market, especially in the U.S., might be less inclined to adapt. They think a bull market in Treasuries and other government bonds is the norm, so they don't bother closing their long positions.
Trend Followers kno...2017-07-0600 min
Right Mind TraderEpisode 23: How to Prevent ‘Losing Pain’ Affecting Your Decisions with Michael MelissinosDo you allow the pain of taking a loss affect your next decisions with unpredictable impact on your profit results? In this episode of your ‘Engineered Trading Mindset Experts Talk’ show Michael Melissinos of MelissinosTrading.com discusses how the emotions of anger, frustration and impatience skew your trading decisions and explains how he deals with this profit-killing issue. “In This Episode…” ...
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The post Episode 23: How to Prevent ‘Losing Pain’ Affecting Your Decisions with Michael Melissinos appeared first on Right Mind Trader.2017-06-2700 minWhipsawed7: Performance Doesn't Depend on VolatilityGreat trends can exist despite low and declining volatility. People seem to have gotten the idea that trend following performance has been poor over the past couple of years because of low market volatility. Not true. Trend reversals and false breakouts are the culprits, not low volatility.
I don’t root for volatility. I root for trends. Sometimes markets trend despite low and declining volatility. They can exist with high and increasing volatility too, but positive trend following performance does not need high volatility.
Full article: http://www.michaelmelissinos.com/blog/positive-trend-following-performance-depends-on-persistent-trends-not-high-volatility/2017-06-2600 min
Desire To Trade Podcast | Forex Trading Tips & Interviews with Highly Successful Traders098: Starting To Trade Professionally With $300,000 - Michael Melissinos Starting To Trade Professionally With $300,000 – Show Notes In episode 98 of the Desire To Trade Podcast, I interview Michael Melissinos, a trader who started to trade professionally with $300,000 and now trades for over 30 investors from around the world. Michael accepted to come on the podcast to share with us how he got started trading professionally at a fairly early age as well as how he progressed and convinced more investors to invest in his trading activities. He is of the opinion that traders are better to start early. Michael ensured that he was...2017-06-2650 min
Desire To Trade Podcast | Forex Trading & Interviews with Highly Successful Traders098: Starting To Trade Professionally With $300,000 - Michael Melissinos Starting To Trade Professionally With $300,000 – Show Notes In episode 98 of the Desire To Trade Podcast, I interview Michael Melissinos, a trader who started to trade professionally with $300,000 and now trades for over 30 investors from around the world. Michael accepted to come on the podcast to share with us how he got started trading professionally at a fairly early age as well as how he progressed and convinced more investors to invest in his trading activities. He is of the opinion that traders are better to start early. Michael ensured that he was...2017-06-2650 minWhipsawed6: Wine and TradingThe soil matters most.
Without great soil, wineries cannot make great wine. Without big trends, traders cannot make big money. Wine-makers are at the mercy of their geographical location; traders, at the mercy of the markets. There’s a reason why wineries don’t exist in Nebraska and why trend traders don’t make money in stagnant markets.
Much of what contributes to making great wine lies outside of our control – location, soil and weather. If a guy in Iowa wants to open a winery, he knows he has to go to where grapes grow. He canno...2017-06-2300 minWhipsawed5: Leaving Money on the TableTrend Following, by design, leaves money on the table. It does not try to milk every trade for every penny.
It aims for profit, but not greed.
It accepts missing tops and bottoms in order to capture the middle of trends.
We humans love predicting, buying bottoms and selling tops. The cost of these behaviors outweigh the profits, though.
Many people choose not to buy stocks during this 7–8 year bull market because the perfect buying opportunity never occurs. The market never pulls back enough to justify getting in; no one wants to...2017-06-1900 min
Whipsawed4: Why Have Trend Followers Been Losing Money Lately?From 2013 to early 2015 trend traders profit from a few large trends – crude oil falls 70%, stocks rise 40% and the U.S. Dollar rallies 20%. Since then, performance stagnates. Over the past two years, many markets move sideways and exhibit nasty V-shaped reversals. As a result, many trend following strategies take many small losses as they buy near tops and sell (or short) near bottoms.I want to show you how and why trend traders have been losing money over the past two years. In the podcast, I discuss a couple of charts from the major sectors: Bonds, Curren...2017-06-0520 minWhipsawed4: Why Have Trend Followers Been Losing Money Lately?From 2013 to early 2015 trend traders profit from a few large trends – crude oil falls 70%, stocks rise 40% and the U.S. Dollar rallies 20%. Since then, performance stagnates. Over the past two years, many markets move sideways and exhibit nasty V-shaped reversals. As a result, many trend following strategies take many small losses as they buy near tops and sell (or short) near bottoms.
I want to show you how and why trend traders have been losing money over the past two years. In the podcast, I discuss a couple of charts from the major sectors: Bonds, Currencies, Commodities and St...2017-06-0500 minWhipsawed3: Warren Buffett vs S&P 500Since 1984, Berkshire Hathaway underperforms the S&P 500 more than half the time (4,198 out of 8,363 days). Yet, Berkshire doubles the S&P 500 in average annual returns and achieves a total return ~43 times higher.
Case in point: too much focus on short-term underperformance can inhibit us from capturing the long-term upside.
Blog Post: http://www.michaelmelissinos.com/blog/performance-on-any-particular-day-doesnt-matter/2017-06-0100 minWhipsawed2: Is the Stock Market in a Bubble?Charts can deceive us. The same market displayed on different scales can distort our opinion on whether the trend is up or down and how strong the trend is. In this short article, I compare and contrast the look and feel of the stock market prices on both linear and logarithmic scales.
The linear chart looks and feels like a bubble. We see the parabolic nature of the uptrend and think “I’ve seen this pattern before (in 2008 Crude Oil, 2011 Cotton, 2000 NASDAQ and others)”. In linear-scale charts, early data cannot tell the full story.
The logarit...2017-05-3000 minWhipsawed1: Comments on the Brazil BloodbathBrazil stocks, government bonds and currency suffer large one day losses last week on bribery allegations against their pro-business president. Markets, not liking this too much, quickly sell and the Brazil stock market finds itself limit-down; the currency (Real) down 6% and bonds down ~4%.
A few things to think about...
1) If you invest most of your money into one country, you put yourself at risk of a Brazil-like event wiping out a good chunk of your cash.
2) In the event of an event like this, and you see your accounts down 10-20% in an...2017-05-2300 min
52 Traders | Trading Interviews: Make Your Wallet Fat!62: Michael Melissinos on Why Trend Following Works When You Don't Follow the HerdIn the show Michael reveals: The philosophy behind his success Two ways to determine a trend His definition of Adaptive Trend Following The one thing in trading you shouldn't flip flop on Full interview & show notes: https://52traders.com/michael-melissinos/ 2017-02-0812 min
52 Traders | Trading Interviews: Make Your Wallet Fat!62: Michael Melissinos on Why Trend Following Works When You Don't Follow the HerdIn the show Michael reveals: The philosophy behind his success Two ways to determine a trend His definition of Adaptive Trend Following The one thing in trading you shouldn't flip flop on Full interview & show notes: https://52traders.com/michael-melissinos/ 2017-02-0812 min
Better System Trader056: Allocating capital for higher returns with Michael MelissinosWhether you’re a retail trader with a small account or a fund manager with millions or billions under management, something that we all need to consider carefully as traders is how or where we’re going to use the money in our trading accounts. 'Capital allocation' sounds boring but it can have such a huge impact on our trading results. Unfortunately, it can sometimes be overlooked for other aspects of trading like entries and exits, leaving traders with an inefficient use of their capital and can result in lower returns and poor performance. Can we us...2016-08-2157 min
Radical Personal Finance321-The Trend Following Investment Strategy (and What It's Like to Build Your Own Investment Management Firm from Scratch) with Michael MelissinosMy guest today is Michael Melissinos. Michael is a trend-following investment manager who has systematically built his own firm over the past few years. Michael's story presents both a case study of entrepreneurship (how to go from jobs that are poorly suited to you to an entrepreneurial venture) as well as insight into various aspects of trading from a trend-following perspective. Enjoy the show! Joshua Michael's blog: http://www.michaelmelissinos.com/ Michael's firm's site: http://www.melissinostrading.com/ Open a brokerage account with Tradeking: http://radicalpersonalfinance.com/tradeking Support RPF on Patreon! http...2016-04-181h 17
Chat With TradersMichael Melissinos – Launching a Fund at 26, and Trading Trends in 40 Global Futures MarketsWhen the market went down in ’08 this weeks guest, Michael Melissinos was right there, in the thick of it. He was an analyst on the trading desk at Bear Sterns, and then later at JP Morgan after they were bought out.Since then, Michael’s left his Wall Street days behind him, and now trades a fund of his own, using a systematic trend following approach, that operates on 40 global markets.Although I missed a large chunk of the story there, you’ll hear how Michael got to this stage of his career during the interv...2015-08-201h 19
Michael Covel's Trend FollowingEp. 350: Michael Melissinos & Glenn Graham Interviews with Michael Covel on Trend Following RadioMichael Covel speaks with Mike Melissinos and Glenn Graham on today’s “emerging trend following trader” episode. In 2011, Melissinos started Melissinos Trading in his parents’ house in New Jersey. Covel and Melissinos discuss Melissinos’ career and beginnings; his history with Bear Sterns; Melissinos’ introduction to trend following; “find trends, align with trends, and manage risks”; the similarities between crude oil, copper, sugar, the Euro, and wheat; and trading based purely on price. For more information on Mike Melissinos, visit melissinostrading.com. Glenn Graham’s firm is Golden Point Capital. Graham has had extensive experience in quantitative trading strategy development in the futures spa...2015-06-0100 min