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/
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Hope you enjoy my never-ending podcast conversation!
