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Ep. 151: Eric Wong Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

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The Importance of Accepting Drawdowns

I was speaking with, it was in the offices of one of China's top 10 largest mutual funds. They were discussing drawdown and they said, well, we can't accept those kinds of drawdowns. If we have a 10% drawdown, we return the money to the client. And I said, okay, when do you start the strategy up again? How does that happen? He goes, oh, no, once we go down 10%, we lose that client, we close that fund and we don't ever get that client back again. It was all said with a straight face. Yeah. Well, I mean, I can sympathize though in that many investors ourselves included

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