TTU26: The Most Repeatable Trading Method Ever Invented ft. Scot Billington – 2of2

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 28 August 2014

⏱️ 69 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Welcome back to the second part of our interview with Scot Billington of Covenant Capital Management.

In this episode, Scot delves into the practice of trend following and why it is a great model to follow. He also discusses tips for beginning traders and investors, and advice for those who wants to start a firm. Thank you for listening to Part 2 of our conversation with Scot Billington.

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

In This Episode, You’ll Learn:

The story of Scot’s childhood obsession with mathematically based, but unknown future outcomes.
The discipline required to follow a mathematical model.
The advantages of trend-following and why the media reports that “Trend Following is Dead” every few years.
Scot’s philosophy on position sizing.
How every sector in the market is highly correlated.
Getting comfortable with taking risks: they exist and it is impossible to avoid them.
The Barbell strategy: have very little money at risk, but the money that is at risk is in the most aggressive things that it can be.
The biggest mistake that allocators make.
How Scot conducts research for Covenant Capital.
Why he is based in Nashville and how he overcomes the challenge of asking investors to buy into the long time-frame.
Finding your niche as a boutique firm.
Advice for managers wanting to start firms today.

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Resources & Links Mentioned in this Episode:

Scot mentions how the media often announces the death of trend following. Here’s an article on the subject from Futures Magazine.
Learn about the Barbell Trading Strategy.
See 10 Fallacies when Selecting CTAs.

Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.

IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.

And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.

Learn more about the Trend Barometer here.

Send your questions to [email protected]

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Transcript

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0:00.0	You're listening to Top Traders Unplogged, episode number 026, where I continue my conversation with Scott Billington, co-founder and managing partner of Covenant Capital Management.
0:14.7	This episode is sponsored by Saxo Bank.
0:17.7	Welcome back to Top Traders Unplugged, where the best traders in the world come to share their
0:22.5	experiences, their successes, and their failures.
0:25.7	Let's rejoin the conversation with your host, veteran hedge fund manager, Nealz Kastrup Larson.
0:34.4	You know, a good man. You talk about these long-term frames.
0:45.5	And yeah, I can imagine it's not easy to get investors to share that horizon, so to speak, because...
0:58.7	If you want to take not easy out and replace it with impossible, then you'd be correct.
1:03.8	Yeah.
1:04.4	But that's the business that I've chosen.
1:07.5	Sure.
1:08.3	I mean, I know full and well that the next time we get hot for 24 months will attract a lot of money.
1:18.6	That's a fact.
1:20.8	And the next, we'll keep attracting money as long as we quote unquote stay hot.
1:27.8	And then the next time we have a, you know, a drawdown, which will come.
1:34.0	That's guaranteed.
1:35.3	And it'll last for X amount of period.
1:38.6	We'll lose a third of the money that we had.
1:42.0	That's just the fact of the matter.
1:44.1	I mean, we attempt, we try, we talk about these things with our clients, but... third of the money that we had. That's just the fact of the matter.
1:49.6	I mean, we attempt, we try, we talk about these things with our clients, but it is probable that the Homo sapien is not particularly hardwired very well for trading.
1:57.0	Why did you choose such a difficult path, Scott?
	...

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