Ep. 83: Tom Basso Interview with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
Michael Covel
4.6 • 732 Ratings
🗓️ 28 November 2012
⏱️ 269 minutes
🧾️ Download transcript
Summary
My guest today is Tom Basso, the trend following trader famously featured in Jack Schwager's "New Market Wizards". Basso is a hedge fund manager. He was president and founder of Trendstat Capital Management. Trendstat was closed in 2003 when assets under management fell to $65M. He is the author of two books, Panic-Proof Investing and the self-published The Frustrated Investor. In 1998, he was elected to the board of the National Futures Association. He currently runs enjoytheride.world, a website dedicated to trader education. He is also the chairman of the board of Standpoint Funds.
The topic is Trend Following.
In this episode of Trend Following Radio we discuss:
- Video of philosopher Alan Watts
- How Basso manages his emotions during both losing and winning periods
- What drove Basso to "enjoy the ride" and whether there were periods in his life when it was difficult to do so
- Exit strategies on winning positions
- Basso's use of hedges
- The process behind taking a developed system from testing to live trading
- What Basso learned from his earliest large drawdown
- Basso's use of money management and risk control
- Basso's advice to the first time programmer
- How to handle skeptics of trend following
- Whether Basso considered the notion of serenity from the very beginning of his career
- The career of John W. Henry
- Basso's coin flip entry method, and the importance of exit strategies
- Percent betting
- Diversification
- What would cause Basso to stop trading a particular system
- Comfort with uncertainty
- Basso's views on initial capital at risk vs. unrealized gains
- Fighting against your gut reaction when your system tells you otherwise
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, best-selling authors, and the pros that know what drive us irrational human beings. |
| 0:20.7 | I am your host, Michael Covel. |
| 0:23.1 | Not filtered, raw, honest. |
| 0:26.6 | That's my passion. |
| 0:32.6 | 400 episodes. |
| 0:35.6 | Today marks my 400th episode. 400 episodes. Today marks my 400th episode. Four hundred episodes. Anyone inspired enough to program that |
| 0:46.3 | much content this many guests, well, they either have to be a really cool person or slightly insane or a combination of both. |
| 1:00.8 | I will just put that out on the table as food for thought. |
| 1:04.6 | My guest today. |
| 1:06.1 | Well, actually, he's not my guest today. |
| 1:07.7 | Not my live guest today. |
| 1:09.5 | My guest today is Tom Bassow. |
| 1:12.4 | Tom has appeared on my podcast four times. |
| 1:16.3 | I think they're four of the most popular episodes that I've had on my show. |
| 1:21.5 | And today, on my 400th episode, I would like to play all four of Tom Basso's podcast episodes back to back, to back, |
| 1:31.5 | to back, with a bonus. The bonus is the very first excerpt I'm going to play is from |
| 1:40.4 | some time, I believe, in the early to mid-1990s, |
| 1:47.0 | at an event where Tom was speaking at. |
| 1:50.4 | You will find that Tom is very consistent. |
| 1:52.9 | His message has not changed. |
| 1:56.8 | I hope you enjoy this extremely long episode, |
... |
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