This is trend following radio where great thinking comes alive.

Nobel Prize winners, legendary traders, bestselling authors, and the pros that know what drive us irrational human beings.

I am your host, Michael Covel, not filtered, raw, honest.

That's my passion.

Let me jump right into it.

I have one of these fine Howard Marks memos in front of me.

Howard Marks, the great investor.

Howard Marks, who has appeared on this show.

And quoting from his recent memo or one of his recent memos,

I want to talk about the thought process of gambling

contrasted against the thought process for good investment, good trading. Now, a lot of these

ideas I've written about in my books extensively, but I thought this was a great reminder, a great summation right to the heart of the

matter. First, game selection versus skill. When considering where to invest, it's important to

understand both how much of the requisite skill you possess and the quality of the competition.

Being a consistent winner among the best gamblers or in the most intensely competitive

markets can be very difficult.

Instead, your energy might be better spent looking for less efficient niches.

Unfortunately, it's harder to find them than it was decades ago.

Now, he's not saying it's impossible. He's just saying it's harder. Number two, increasing efficiency,

the tendency of markets to adapt. In the early days of online poker, it was easy for decent players to win,

and a lot of amateurs were enticed to play by seeing a newcomer win the World Series of poker.

After some time, however, the games became tougher as they attracted professional players,

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