Ep. 191: Eric Crittenden Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Michael Covel

Investing, Business

4.6 • 730 Ratings

🗓️ 8 December 2013

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

My guest today is Eric Crittenden, a Founding Partner responsible for managing all research, risk quantification and trading operations. He's also been featured in Covel's own Little Book of Trading.

The topic is a white paper that was originally released in 2005 that concerns trend following on stocks.

In this episode of Trend Following Radio we discuss:

The decision to do research into trend following on equities, and the background behind the white paper
Why others weren’t trading equities with a trend following strategy at the time, and why there’s been a sea change in the industry now
Stress tests
How Critenden’s models and datastreams apply to a model
If Crittenden sees anything on the horizon that takes trend following on equities in a suboptimal direction, and where he sees it going in the future
Whether Crittenden’s work is all price driven and all systematic
The amount of human judgment involved in Crittenden’s strategy
Why this strategy works if it’s based on inefficiencies in the market, and Eugene Fama just won a Nobel Prize regarding the markets being efficient
Why exposure management is more important than the entries and exits themselves
The importance of blocking out distractions.

Jump in!

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I’m MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I’m proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

To start? I’d like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/

You can watch a free video here: https://www.trendfollowing.com/video/

Can’t get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms:
Twitter: @covel
Facebook: @trendfollowing
LinkedIn: @covel
Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Transcript

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0:00.0	This is Trend Following Radio, where great thinking comes alive.
0:10.9	Nobel Prize winners, legendary traders, bestselling authors, and the pros that know what drive us irrational human beings.
0:21.2	I am your host, Michael Covel, not filtered, raw, honest.
0:27.3	That's my passion.
0:32.8	Today in the show I have Eric Crittenden.
0:35.6	Eric is with Longboard Asset Management.
0:38.7	Eric has appeared on my podcast before.
0:41.3	He is also featured in my book, The Little Book of Trading.
0:45.1	Today, we talk about a white paper, a research paper, that he originally put out in 2005
0:50.6	with his partner, Cole Wilcox.
0:53.1	It's been updated many times, but worthy of discussion.
0:57.1	The topic, trend following on stocks. I hope you enjoy.
1:06.7	I think our narrow focus tonight, for you is probably a smart place to go, which is trend following on stocks.
1:21.0	And I still remember, you'll have to correct me on the year.
1:24.7	I want to say 05.
1:26.9	When you first put out, you and Cole put out
1:29.5	the paper, does trend following work on stocks. And to some degree, I think you were out on an island
1:35.1	at the time. It wasn't like, it wasn't a common conversation in the strategy of trend following
1:43.1	to be applying it to equities. Very well known in futures at the time,
1:48.2	but not something applicable to equities. What spurred you on to do that research, to write that
1:56.2	at that moment in time? And why don't you fill in the year for me when you first put it out?
2:00.4	I know there have been several, not revisionsisions but several kind of adds to it and expanding
	...

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