Mike Melissinos is back from a long podcasting break to review the markets - stocks, bonds, commodities and currencies. There's a lot happening right now with a possible looming recession, government bond yields going back to all-time lows and the recent Coronavirus outbreak in China. Mike gives a 30,000ft view of each of the major asset classes, h…

We see pickiness permeating across society today. We don't like being wrong or feeling dumb. We think we can prepare for every little thing that comes our way. MLB teams are experiencing the pitfalls of over-optimization. Instead of giving batters as many at-bats as possible, they optimize for how each batter does versus the opposing pitcher while …

Ask questions to learn how your manager and his or her strategy makes decisions each day. It's important to learn about how the strategy is going to behave before you invest in it. You cannot expect to know how it will perform since that is largely up to the markets, and we cannot control them. But we can learn about how the strategy makes decision…

Bearishness across the board in a number of sentiment surveys and indicators.By Michael Melissinos

Communicate well, especially the value proposition and generate performance. Done.By Michael Melissinos

...concentrated risk in one asset class and poor loss-control tactics.By Michael Melissinos

Some get the result they want, and stop working. Those in for the love, never stop regardless of the results they get - but they tend to get the best results.By Michael Melissinos

“Improving” the strategy typically serves as a self-correcting mechanism to remind the manager to stick to his/her philosophy and strategy, not to change it or “adapt” it every time s/he runs into some losses.By Michael Melissinos

A blind taste test between two investments.By Michael Melissinos

There’s a tremendous amount of inconsistency and streakiness that occurs in the markets. Great investors do their best to survive and focus between big kills and have the ability to take the shot when they come along.By Michael Melissinos

All it takes is missing one big winner and/or holding a loser just a little too long to derail our investing results.By Michael Melissinos

One seed = one opportunity. Many seeds = many opportunities.By Michael Melissinos

Having skin in the game makes for a better fund manager.By Michael Melissinos

Two things investors are always going to want: to make more money and suffer less drawdowns.By Michael Melissinos

Romanticizing about a stock clouds judgement. General Electric, once a darling of the Dow and pillar of innovation, has become a shell of itself. It has lost over two-thirds of it’s value over the last few years and ~85% since 2000.By Michael Melissinos

Article: http://www.melissinostrading.com/investment-strategy/comparing-the-worst-periods-of-trend-following-to-buy-and-hold-index-funds/By Michael Melissinos

Part 1) Derek Notman of Intrepid Wealth Partners and I co-write article on Trend Following. Link: http://www.intrepidwealthpartners.com/blog/trend-following Part 2) An inspirational story of a kid trying to buy a computer goes out into the snow to make some money. Story from the young fella's dad: https://twitter.com/jackmurphylive/status/108445666…

By Michael Melissinos

Yesterday's stock market sell-off presents a nice entry point for us to review our investments. Are we diversified? Are we too concentrated in tech stocks or large cap names? Might we reconsider re-balancing into some other non-US stocks, or different industries or different strategies in general? Do we have too much invested into the passive buy a…

This one dovetails off of the "How We Work With Investors" episode. I believe in taking a thorough approach to learning about the investor, their risk tolerance and philosophy when it comes to not just investing, but life in general.By Michael Melissinos

On my recent trip to northern Italy, my wife and I went on a two-day wine tour. I asked a lot of questions. I wanted to learn about the winemaking process and draw parallels back to investing. Needless to say, they share a lot of similarities. The big question I asked: What percentage of making good wine are you, the winemaker, responsible for? I w…

In this episode, I outline my method for how I like to work with investors. It doesn't always work. There's the occasional bump in the road (investors want to add in when recent performance is hot and sell out when I've been losing; they forget the benefits of adding a strategy like mine in their portfolio in the first place; they forget the genera…

By Michael Melissinos

Our behavior transcends our current setting. How we invest is how we eat, how we are in relationships, how we work, etc. Trend Followers don't limit their philosophy to one area. In all likelihood, they go with the flow, ride winners, cut losses and care a lot about survival in every facet of their lives. http://www.melissinostrading.com/markets/ep…

On this episode I talk about my recent experience in the NYC Trading Tribe. For those unfamiliar, I lay out the premise of Tribe before I get into it. Specifically, I talk about my behavioral pattern of shyness - missed opportunity - frustration. For much of my life, this pattern has occured over and over again. In Tribe, with the help of the guys,…

Markets go through long periods of choppiness – often long enough for us to think that it’s the new normal. Markets can trend for a long period of time and we feel the same way. There have been many other instances in many other markets where they chop – trend – chop – trend. Markets today are no different than they were back in the day. http://www…

You care for your garden in a similar manner you do your trend following portfolio.By Michael Melissinos

Jerry Parker needs no introduction. He's been running a successful trend following firm, Chesapeake Capital, since the 1980's. Today, we talk about a number of different things including: 1) Winton Capital "stepping away" from trend following 2) Morningstar's study on fund manager performance 3) The Dr. Copper myth 4) Earnings growth vs. stock mark…

Today, I talk to Gary Antonacci, author of Dual Momentum Investing: An Innovative Strategy for Higher Returns with Lower Risk. Gary has over 40 years of investing experience, holds an MBA from Harvard. He also found, invested and worked with a few investing legends when they were relatively unknown – Paul Tudor Jones (billionaire fund manager), Joh…

By Michael Melissinos

Derek Notman, CFP, is a financial advisor from Madison, Wisconsin. His firm is Intrepid Wealth Partners. Derek recently discovered trend following and is starting to educate his clients on the benefits of adding it to their portfolios. Today, we talk about: - how he discovered trend following (Michael Covel's books, a personal mentor and The Way of…

By Michael Melissinos

The only thing Wooden cared about was focusing on things within his control and doing them to the best of his ability. He didn’t care or worry about things outside of his control, including winning. He actually believed winning was outside of his control. Remember, this is a guy who’s won more national titles than anyone. https://medium.com/@mmelis…

Every investment strategy experiences winning and losing streaks. They all take turns at the front and back of the line. Trend following has been sitting near the back of the line for the past 5-10 years, while stocks sit near the front. Trend following performance derives from the aggregate trends of all the markets within the portfolio, not just …

For the past 5–10 years, trend followers have had to deal with a double-whammy?—?poor markets and no interest on excess cash. However, it appears at least one of those is changing for the better. Interest rates are rising. Today, the 3-month T-Bill yields ~1.75%. Even though this is pretty low on a historic basis, this is a welcoming sign given it …

The following factors make me bullish on commodities: 1) Multi-year congestion 2) Low volatility 3) A rolling Sharpe Ratio near historic lows and most importantly... 4) New price breakouts. https://medium.com/@mmelissinos/opportunity-in-commodities-d0281fca3eceBy Michael Melissinos

I believe the bond market presents the most intriguing opportunity for trend followers right now. We’ve gone through an unprecedented time of low interest rates since 2008 and now that trend appears to be reversing. This trend may have more fuel than others given the extremely low volatility and overall feeling of complacency. Long-only bond funds,…

By Michael Melissinos

The Fed appears committed to rising rates as long as the economy and inflation cooperate. Some people in the investing community have raised concerns that trend followers will not be able to perform as well when interest rates rise due to the negative carry when holding short positions in bond futures. They believe the main reason trend followers h…

I’ve been receiving lots of texts and calls from friends, and people I haven’t heard from in a while, regarding Bitcoin?—?what my general thoughts are; whether to buy it or stay away; is it in a bubble or not? So I thought it’d be a good idea to take a look at some of the biggest bubbles over the past 40 years. We’ve seen bubbles in may different a…

In psychology, superordinate goals refer to goals that require the cooperation of two or more people or groups to achieve, which usually results in rewards to the groups. Good investing requires a good system, good markets and discipline. Often enough, it's the discipline part that ruins us. In my experience, there's many different systems that mak…

"How much money have you made?" "Where did you get in?" People think these questions are important because they stimulate hopeful feelings of celebration (we've made a lot) and intelligence (we got in before others were talking about it). But these questions don't have anything to do with doing the right thing today.…

Risk is like gravity?—?it always there, but you don’t always feel or see it. Today, we’re in between market storms. People have become more and more comfortable and complacent during the 8-year bull market. The relatively painless uptrend has lulled people into a false sense of security. Even Janet Yellen says she doesn’t believe there will be anot…

All fund managers have a system. Some have it in their gut and head while others code it into a computer. After coming to terms with a system, the manager must follow it religiously in order to maximize results and perform within investor expectations. I believe the main reason why benchmarks outperform managers is due to their lack of discipline. …

Buffett suffered a 49% loss from Jun 1998 to Mar 2000. At the same time, the NASDAQ rose 140% and SP500 rose 28%. Despite heavy losses and public ridicule, Buffett stuck to his guns and wouldn’t touch internet stocks. Buffett’s ability to stay disciplined might be more admirable than his analytical skill. At the time, I’m sure people were wondering…

As a copier, you cement your position of always following the crowd and competitors. You forgo understanding how the product you’re copying actually works; the reasons behind it’s design; the problems it addresses; why it performs the way it does. You blindly put your faith in the person or product you’re copying and, thus, give up your ability to …

Reduce the rules in your investing strategy to make it more robust and easier to execute. We all hear that simple is better; that complex doesn’t work as well and is harder to execute over the long run. Complex rules tend to promote confusion and second-guessing – things that can wreak havoc on any investing strategy. Investors insist on making thi…

When you take the road less traveled, you hear a lot of negative chatter from others and from yourself when you don’t perform well. But winners don’t give in or tell people what they want to hear; they stick to the process instead. If you watched the Super Bowl, you saw two games?—?one where the Patriots sucked and one where they could do no wrong.…

Apex predators don’t succeed all that often. Tigers succeed only 5% of the time; Polar bears 10% and Leopards 14%. All they need is one big kill every once in a while to stay atop the food chain. Tigers, lions and other predators know their game. They balance persistence and knowing when to quit; hunting only for the home-run and conserving energy.…

Embrace cycles and use them to your advantage. Pretending they don’t exist and attempts to eliminate the part of the cycle you don’t like, the losing streak, doesn’t work. The investing world doesn’t like cycles. It prefers investment strategies that produce consistent profits with little variation. I believe the collapse in interest rates intensif…