Ep. 209: Dave Rapach Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Michael Covel

Investing, Business

4.6 • 730 Ratings

🗓️ 9 February 2014

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

My guest today is Dave Rapach, an internationally renowned researcher in the area of asset return forecasting. His research is highly cited and published in leading scholarly and practitioner journals in Finance and Economics. Rapach is a Professor of Economics and holds the John Simon Endowed Chair in Economics at the Saint Louis University Chaifetz School of Business.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

Why trend following works from an academic standpoint
"Publish or perish" and the difficulty of publishing scholarly articles on trend following
Early research on trend following, the random walk theory, and Burton Malkiel’s “A Random Walk Down Wall Street”
Warren Buffett, Bill Dunn, and survivorship bias
A paper that Rapach traces to the reintroduction of trend following and technical analysis to the academic community
Measuring systematic risk
Eugene Fama’s recent nobel prize
How the trend following world has been neglected by the academic community
How Rapach found his way into the academic finance world
Covel’s experience digging in to trend following research in the early to mid 1990’s
Some of Rapach’s recent papers
Why recessions are good for trend following

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

Click on a timestamp to play from that location

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 Cobell.
0:24.0	Not filtered, raw, honest.
0:27.3	That's my passion.
0:33.2	Today in the show I have Dave Ray Patch.
0:36.6	Dave is a professor of economics at St. Louis University.
0:40.3	Guess what?
0:41.5	We're not talking economics today.
0:44.4	Dave happens to be a professor who has put some academic chops behind trend following.
0:51.7	So he's got down and got dirty, so to speak, and did a little digging, done some research,
0:59.6	and he's put together the findings.
1:03.1	Well, let me give you a short answer.
1:04.2	The short answer, trend following works, but our conversation is the long answer.
1:10.1	I hope you enjoy.
1:18.0	Listen, let's jump right in, because you might be the first.
1:23.2	There's a handful of folks in your world, and this I would I would call primarily the academic
1:29.5	world that have, that have dug in and done their homework and come to the conclusion that
1:37.5	trend following works. There's very few of you that have actually taken the effort and from an
1:43.2	intellectual curiosity standpoint
1:45.2	gone in and figured it out and and examine stuff like my books and said is this guy
1:50.7	coval accurate or is he not accurate obviously you're looking much beyond my books but just the
	...

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