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Ep. 491: Brian Christian Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

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The Importance of Overexploiting Problems

Many people tend to over explore so they favor the new disproportionately over the best. The famous experiment in which this comes up was won by Amos Tversky and some of his colleagues back in the nineteen either 60s or 70s. It turns out that the optimal strategy in this case is I believe you make 38 observations in a row and then you blindly place a series of 962 bets on whichever light came on more at the beginning.

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