Pod Insights Michael Covel's Trend Following Ep. 1313: Steve Burns Interview with Michael Covel on Trend Following Radio About this episode My guest today is Steve Burns, the founder of New Trader U in 2011. He started investing in 1993, and trading his own accounts in 1995. It was love at first trade. A natural teacher with a gift for cutting through the bull and making complex ideas simple. He offers an extensive blog resource with thousands of original articles, as well as online courses and best-selling books covering a variety of topics. The topic is trading. In this episode of Trend Following Radio we discuss: Analysis of trading movies Stoic philosophy Personal anecdotes Modern education Trading principles and market analysis Social media Jump in! --- 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/ Can’t get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!
Transcript 0:00 Speaker 00 My guest today is Steve Burns, a repeat guest. Steve is a trader, an author, and I like to think of him as the social media guru. A lot of business experience across many different areas. I always enjoy catching up with Steve and I hope you do too. Please enjoy this conversation.
0:39 Speaker 00 I saw a post of yours about favorite, let's say, market or money movies. I thought your list is pretty fair. You talked about Wolf of Wall Street, Moneyball, Social Network, Big Short, The Accountant, which was an interesting choice, which I really enjoyed. I think that was with Matt Damon's friend, Ben Affleck. I want your view on it too, and you could talk about some others as well. But the thing I loved about The Big Short was that it got it right for those particular types of traders. But what was interesting for me was it left out the kind of traders that I write about, which made a bloody fortune in the fall of '08. The trend following traders were not mentioned in The Big Short because the trend following
1:20 Speaker 00 traders did not have a fundamental view about what was going to happen. They just made money regardless of what happened. I'm sure for 99.9% of market players out there, they have no idea about that insight and maybe they missed what I just said. I don't know. Give me your thoughts about The Big Short.
1:40 Speaker 01 Yeah, I agree with you. I think that's the best realistic trading movie that was realistic on how it actually works and what their thought processes were, what their risk or ratio was, what they were thinking when they made the trades, how they stayed in the trades. I loved the part with Michael Burry where how he was trying to get the stress off of holding that big position and playing the drums. So many things were just so, so good about it, but really captured it. Sort of like the Rogue Trader movie also did and the recent Dumb Money. I think Dumb Money was up. Up there with The Big Short, real new movie. But like capture the essence of putting risk on and holding the risk and dealing with the risk and more convictions where they had convictions about the trades. Where trend followers don't have the conviction, they're just following the price action.
2:23 Speaker 01 It was just fascinating to watch the actual realities of holding those positions and seeing it play out in real time and the thought processes behind it. I thought it was like one of the most realistic depictions I've ever seen of the trading itself and how it works.
2:38 Speaker 00 I'm in Vietnam right now and I think something interesting about Michael Burry is I have an associate here that I've known for many years. In the hedge fund world, Vietnamese American guy who lives here. And he had a good fortune to meet Michael Burry several times in America. And the reason they connected was because Michael Burry is married to a Vietnamese American woman. It's like such a small world, like you never know how things are going to shake out or where stories might come from or something. The world is a fascinating place, but yeah, he was a great character in that movie. I gotta say though Wolf of Wall Street, which I think there's a lot of love for that because maybe the girl in the movie was so hot. It's kind of fun, it's funny and all that kind of stuff.
3:21 Speaker 00 I do think that a lot of people have taken the wrong lesson from that particular film. Don't get me wrong, if I was 25 and I was drinking lots of alcohol, I would probably have fun throwing midgets too. I probably would enjoy it, but I don't know that there's anything really in that particular story. That you can learn a lesson from, except all the wrong ways to do something.
3:44 Speaker 01 People always tell me when I have questions and stuff about it, they always comment Wolf of Wall Street is their favorite trading movie. And I say, really, that's more entertainment and also scamming. It teaches you the scams behind penny stocks and pumping something up and high pressure sales and wanting to get rich quick. I think it does actually have the underlying current of it is what not to do and how not to get scammed. And how the penny pumps work and how the full service brokers work that charge you a fortune for executing trades. I think that's what I tell people, like that's a cautionary tale of what doesn't work. Is what I tell my people, it's entertainment for entertaining, one of the most entertaining movies I've ever. Ever seen. The Michael Burry thing, I have a story too about, I talked to a money manager, long, long time ago.
4:26 Speaker 01 And he was saying that he actually got Michael Burry on the phone early on when he first was starting to become famous. After the big short he did. And he said, the money manager told me that Michael Burry told him, he wished he just would have shorted the S and P 500 futures. And he wouldn't have all the drama derivatives that he got Goldman Sachs to write and how complex he made a simple trade. And of course, it's anecdotal, but a money manager told me that Michael Burry said, as a good source and says, he wished he just would have shorted the S and P 500 futures for liquidity and for ease. And it would have worked out the same if his thesis was correct.
4:59 Speaker 00 I wonder if he saw Paul Mulvaney's plus 45% in the month of October 2008, which was S and P futures. Trading as a trend following trader. So you wonder, Michael Burry is obviously a smart guy. He might not have known about trend following traders at the time. But he probably in hindsight, figured out that people did make a bloody fortune in futures. Trading that particular moment in history.
5:24 Speaker 01 Lot more simple too. He wanted to specifically bet on the housing market and he wanted to do it the most complex way. I mean, the liquidity dangers alone on that. Was incredible. I didn't have counterparty risks and even the point where Goldman Sachs might have went bankrupt without the bailout of the government or A I D. Going bankrupt, not being even able to cover their side of the trade, like having counterparty risk in the complex derivatives he was using. He was really a deep value investor and he came from Graham and Doddsville, where he was a deep value investing. As he got out of that and slipped his mind thinking, if I buy deep value, then you should be shorting extremely overbought, overvalued. Things and he wanted to inverse his deep value investing. I think that's what led him to that. He's very fortunate that it all worked out and everything was bailed out.
6:07 Speaker 01 He got out before the bailout happened as well, because he also could have gotten hammered if he would have believed that they were going to let everything fall apart in the housing market and the banking sector. That's so funny is if his biggest win would have been if Goldman Sachs itself bailed out, which was his counterparty risk.
6:22 Speaker 00 There's one more film that I wanted to bring up. It's not a direct treating film like we're talking so far, but The Social Network I found super interesting because it got right at the idea of what I would call ideas and execution. Zuckerberg had ideas, had execution, and I thought the whole process of watching the American legal system unfold was a little bit nauseous. Maybe, I did look at all the transcripts, maybe the two guys, the Winklevoss, maybe they had a legitimate issue. I don't know. They got a settlement, but getting a settlement doesn't necessarily mean you were right. That's always complicated, too.
7:07 Speaker 00 I do find that part interesting, the legal part. I saw some legal issues early on in my career, and I got to tell you, it's unfortunate when you get experience with people abusing the system for essentially a shakedown.
7:19 Speaker 01 That's fascinating, the way he did that. Like, he can't just simply go do it and be open and honest about it, or even like, keep them in the loop. He had to like, go do it the most sneaky, devious manner and say he's working on theirs or he's working on his own Facebook. It's like, why are things so complicated? Like I said, it's a speeding ticket for him to settle. Who cares? It's nothing. It was a speck of dust when Zuckerberg's like, working on being the richest person in the world, multiple times, and he worried about a few of his dollars, the Winklevosses. It's incredible that the Winklevosses took that money and went all in on Bitcoin. That would be a great movie. The big long on that. That's the craziest story to follow up on.
7:54 Speaker 00 That is absolutely amazing that they took that money and they went straight to Bitcoin. That's a purely fundamental bet, but sometimes in history, there are people that just take that one bet and boom, wham bam, thank you ma'am. I mean, it won't work for most people, but there are winners in that type of a betting structure. There are winners that appear.
8:12 Speaker 01 There's always a equal.
8:13 Speaker 00 The thing about all these things, too, you have a hard time finding what the hell is the truth? Because like you and I, we just expressed a slightly different take on the Winklevoss, and maybe you're right, maybe I'm right, who the hell knows? This comes back to something that I've really liked in my work, which is on the price action and looking at the trend following performance histories. It's like, eh, there it is. You can have all the opinions in the world about it, but there it is. I've always loved that.
8:41 Speaker 01 The price is true. That I mean, all that. That's the thing. It's so funny. The vast majority of the markets and traders and investors get so tied up in knots over why is this going on? What should be the price and what's going to happen next? They get this obsessed with that. It's the beauty of the trend followers is just cutting through all the noise and just what's price doing? Okay, broke out. Okay, it's an uptrend. Okay, I'm going to keep holding it. So the trend finally broke based on my parameters. I'm going to go in and lock in my profits and just cut through all the BS like the ultimate Pareto principle, like trend following focuses on the one percent that matters.
9:13 Speaker 00 A thing of beauty. I'm talking like a mathematician or a physicist right now, which I'm not, but there is a certain elegance and a certain beauty to it, even though it's dealing with such wide uncertainty and variability, but to craft mathematics around uncertainty and variability and volatility and make it work. It's just fascinating that these old pros figured it out.
9:40 Speaker 01 A lot of it's just math. It's just risk reward ratio, profit factor, a big win, small losses. The trade management genius of where the trend followers don't have to adapt a lot to market environments because it's built into their strategy itself where if their stock losses hit, okay, they're getting out. If their trailing stop is still in line, they're letting it run. They don't even have profit targets for the most, almost never. They usually just let it run until it was running and they can capture moves that nobody could imagine. A good trend follower would have caught Nvidia and you'd have to be a nut to have caught Nvidia and the run it's had this year. For every conceivable technical and fundamental reason, it couldn't possibly go there and it went there. Sort of like the fundamental like Amazon, the only way it's worth this is if it takes over retail itself. It is the number one, it takes over
10:23 Speaker 01 all retail, knocks out T mark and takes over the online space. And they said, there's no way it's valued unless it does it. It did do that. And like Tesla, Tesla would have to sell more cars than all the other car companies to be worth this. This is crazy. It missed the whole trend. Like it did. It ended up being the number one selling car and being the one of the few companies that didn't go bankrupt. It's funny that the price was before the fundamentals caught up by years and years and years. I remember on the fundamental stock trader side, nobody could figure out Tesla or Amazon. They just couldn't get why in the world the price trend was in place and it played out to be true. And the trend followers with stocks could have caught that.
11:02 Speaker 00 Without having any fundamental expertise and knowing a damn thing about electric cars.
11:06 Speaker 01 Yep, that's what the beauty of it was. I made a great province on Apple back in 2007 and never even on iPhone. And never even saw an iPhone, never used an iPhone, but it was just breaking all time highs. I just kept following it. What was this? Price line. I never used price line. Didn't know the website worked. I was just following pure price action.
11:22 Speaker 00 Let me bring up a guy that I know you're a fan of. Interesting because I think he's a little more mysterious than the pure trend following traders that are known in my world. But Paul Tudor Jones, who was somebody that originally influenced me to, especially the trader film. And the way he described, I think it was either a family friend or his uncle. And down in New Orleans and handling a bad trade and all that kind of stuff. The interesting thing about Paul Tudor Jones is I can't speak to what percentage of price action only trading he's done over the years. Clearly a significant amount. But I think he's kept things a little more mysterious. Back in the day, there were stories.
12:05 Speaker 00 And you see this with some famous traders. If something happens early on, that people will think forever. For the last 40 years, Paul Tudor Jones has been using Elliott Wade, which I don't think is true. I think it's interesting because. He reminds me of a guy with so many of the things that he said, like the image you recently posted. With the background behind him, that sheet of paper that says losers, average losers, and I want you to talk about that. Someone asked the other day. I guess a lot of people see that picture and they don't even think about that. The most important thing is not that Paul looks cool or whatever. It's the piece of paper behind it. I also want to add too, for some more grist for you. I think Paul Jones, the way that he trades.
12:47 Speaker 00 He spells it out in Anthony Robbins' book. He tells everybody, I'm a price action guy. I know you're a big fan.
12:53 Speaker 01 First, I'd like to give credit to you for finding that Paul Tudor Jones picture somewhere you found it deep in the library and posting it.
12:58 Speaker 00 I think Financial World Magazine, I have the original copy, probably 87, 88, 89, something like that.
13:06 Speaker 01 You're an archaeologist to find that trading pick and share it. I guess it's been 13 years ago. I have to credit you for the image that I steal relentlessly for all these years.
13:13 Speaker 00 13 years ago. I put that sucker online probably between 96 and 98.
13:18 Speaker 01 Way before I even got here, that was a good work. We need more of the trading archaeology online or lost images.
13:24 Speaker 00 I know you're a big fan of Joe's.
13:26 Speaker 01 Yeah, that's the whole thing. Losers, average losers. I think he summarized poetically, counter trend following like somebody wants to, especially the danger of value investing for the wrong stock or even buying a dip where somebody goes and buys something or an oversold chart, they go buy it, then it goes against them. So it looks better, like it's looking better. Well, I could buy more into it. It keeps going against you. It's like you, instead of going with the flow, you're doing the opposite of whatever trend follower to do, hoping that it's undervalued, so it's going to come back. And then to start adding to that and compounding the problem and trying to like dollar cost average upside down until you think you get a lower cost basis and you end up losing more money. That's what people ask me, you know, why don't I add to something or it's a better value? It's like, I'm not trading to lose money. I'm not going to trade for it to go
14:09 Speaker 01 against me and cost me money. I'm not going to reward a bad trade with more capital and keep going against it, hoping that it bounces. People I've seen get trapped waiting for it to get back to even some cost and wanting to hold it and keep losing more money and hoping it gets back to even. Then they're proud of themselves when it gets back to even. They've lost the money. They've lost their time. They've lost their opportunity cost and just keep holding it. What a brilliant way to summarize it. Losers, average losers. Cause obviously he got on the wrong side of something before and learned a big lesson with a lot of money. Remember his own quote where he says, he said to himself, hey, Mr. Stupid, why make your life miserable? Instead of thinking, huh, I should just go with the price action with what his quote sort of summarizes.
14:46 Speaker 00 Well, I love the idea too, that it is a pretty direct critique of dollar cost averaging, which I don't think most people would think of or catch on and use the phrase I was thinking it used at first, but it is a great way for people to think. If they're listening right now, they're thinking, what is Mike and Steve? They're not really explaining losers, average losers, as said by Paul Tudor Jones. And they're talking about dollar cost averaging. Well, okay, if it's not making sense to you, write down both concepts on a piece of paper and start to understand them. Because if you can get the idea of losers average losers and the difference between dollar cost averaging, you're right back to kind of a price-based trend following mindset.
15:26 Speaker 01 Those people mix up investing like what Warren Buffett does as a positive expectancy, what trend followers does as a positive expectancy, but people try to mix them and match them together. Warren Buffett is waiting 10 years for a company to get back to its true value based on projected futures, value of earnings. So that's completely different than when a trader is trying to profit from price action in a set shorter timeframe. I think people try to like, or somebody who's retiring trying to dollar cost average in the S and P 500 over 10-year, 20-year, 30-year period is a very different ballgame. Somebody trying to trade price action and make money in a shorter timeframe. And people try to mix those together, which I still believe in long-term, this buy and hold investing in S and P 500 is going to have a cataclysmic pain
16:09 Speaker 01 on buy and hold investors that they can't even imagine whether they're holding, thinking they have no risk in 10, 20-year periods after what happened in 2008. And the only reason that everything came back was for massive government bailout and money printing and buying US treasuries and putting on the Fed balance sheet and quantitative easing and just the craziest stuff imaginable. I will never forget and burning my psyche, all the people that, you know, dollar cost average, buy and hold, investing. And when, I think it was March of 2009, where all the gains from 1997, late 1997, all the way till March of 2009 was wiped out. I'll never forget that moment thinking people that were ready to retire, dollar cost averaged and bought and held the S and P 500 even along. And to see all those gains, all those bull markets, everything vanished.
16:52 Speaker 01 The whole internet bubble, everything that held, even everything that never came back from the internet all disappear. Oh, I'll never forget that. I just can't. They think we take risks and sit there and just hold everything for the benefit of the money managers, mutual fund managers and the ETFs all getting paid to just hold something blindly. It's shocking to me and right now we're in the biggest bubbles in the history of civilization right now with massive debt and deficit spending, this fiat currency risk, everything being diverted to fiat currencies, it's just incredible how this all plays out and trend followers can capture it either direction.
17:22 Speaker 00 Let me clarify for the audience though, because there was probably some very smart individual out there thinking to themselves, "Hold on, Mike and Steve are talking about price action trading, following the price, which does not require fundamentals." But, hold on, Mr. Burns just talked about inflation, money printing, deficit spending, etc. Why is he talking about that? Well, let me tell you why he's talking about that, because we can walk and chew gum at the same time. And the fact that trading as price action traders works, as trend following traders works, does not mean that I am not allowed to criticize insane government actions. So, there we are, right?
18:03 Speaker 01 Yeah, it makes me feel good that people ask me, they want all that macro stuff and I mean, I'm not anywhere macro person at all, I'm just, I'm gonna trade the price action. If it's trending up, if I get my signals, I'll go long. If I don't, I'm just gonna trade wherever the signals are. And my opinions are gonna influence the positions I take and I'm not going to get on one side of it and be like a bury position show, which bury got hurt recently picking opinions on crashes and holding it for long periods of time and no crash happened because everything was being supported in any way it could in every way. And he was wrong because he wasn't following price action, he was doing the long-term position trades and even the crashes were short. If he was even able to get out of those, that's what's so fascinating to me is a good example of like my opinions not getting away of trading.
18:44 Speaker 01 And Facebook was going IPO and I was talking to him just from a business perspective, Facebook is the greatest advertising platform ever created, it's even better than Google and it's going to be a monster company, have monster earnings, it's the most innovative thing since Google came out and went IPO. People talked about it and then when it finally went IPO... It opened, I think it was $25 and it crashed all the way up to like $17 or $16. And everybody's like, came back to me, wishing me condolences. Oh, you must have really bought the IPO. You lost your money and lost money. I said, no, I actually made money on it because when it lost the IPO price, I went short via put options, weekly at the money, in the money, both put options. I made money on the downtrend in the IPO and that was the opposite of what I thought. I had no idea what was going to happen. It was going to be long-term. It was fundamentally going to be an amazing company.
19:29 Speaker 01 But I could still short it if it lost the IPO price and it broke that and it was in a downtrend. I held that for weeks and rotated and like moved my put options and rolled them. And it's like, people are like, what? You took the opposite of what you believe long-term? Like, yes, that's what a trader is trading in the price action. I'm not buying, I'm not an investor. I'm not going to buy the IPO and hold it for 20 years. People, their brains short circuited like, how could I be doing the opposite of what I was talking about from a company standpoint?
19:53 Speaker 00 Well, I think also too, to add to that, even taking it back to the last handful of years, the money printing and inflation, which I would argue the money, the inflation is a direct result of the money printing, but it's perfectly fine for thinking people to say, I detest the idea that two Americans who want to go to McDonald's and buy a Coke burger and fries, two people now spend $30 to $35 at almost any location in America. And that is directly a result of people playing games with the money supply. Now, that doesn't mean I'm sitting around taking into account what's going on with
20:38 Speaker 00 the money printing to make a trading decision. I'm not. But I'm also not going to sit around and approve of society going down the you-know-what proverbial blank, blank, blank. I think that's just something that people need to understand is that I had a conversation with CEO of Dunk Capital recently, Marty Bergen, and we were talking about Bill Dunk. So they're coming up on their 50th, 50, five, zero, continuous track record with trend following. And he made the comment, he said, you know, Bill has set up foundations, and I hope I don't get this wrong, but literally hundreds of millions of dollars supporting essentially liberty-type causes.
21:19 Speaker 00 You got a price action trend following trader who still says, hey, hold on. I don't like what we're doing as a society. So I just think that distinction is really important. I know you agree with me. We share a similar belief there.
21:32 Speaker 01 Absolutely. Like you said, opinions and trading are two very different things. You get whatever prediction opinion you want, but it shouldn't affect your trading system.
21:40 Speaker 00 I'm not going to be in America until late November. How many cans of tuna, bottled water and AK-47s have you acquired coming up for the election? Are you ready to go?
21:53 Speaker 01 I voted last election was in November 2022. I voted by moving. I moved to Florida and by the ocean. So I'm the safest place you can be for whatever goes on.
22:05 Speaker 00 Are you in the pant handle?
22:07 Speaker 01 Yeah, Gulf Breeze, Florida. It's close to Pensacola. I'm a south, but a south side get unless I go down farther into Florida, oh, into Miami or Key West libertarian type area.
22:16 Speaker 00 I've done the drive before and you would probably remember the highways, but I did the drive once. Coming from Virginia, coming down through Charlotte. And then taking a highway straight through Alabama to come in down near Fort Walton. And also when I went to school at Tallahassee and you'll know how long this is. I went to school at Tallahassee at FSU. I once took a drive nonstop by myself. This is completely psychotic. I drove from South Padre Island to Tallahassee, Florida, nonstop, except stopping four times, developed for gas, five minutes. A grand total of 20 minutes of stopping, 17 and a half hours from South Padre Island to Tallahassee. That's a hike, man. I was a psycho.
23:00 Speaker 01 John Cena has a story where he said he did that. The wrestler, he drove all through Florida, like all the coasts and stuff. Something about driving out here is different when you drive close to water.
23:08 Speaker 00 Let me shift you into something that I know is near and dear to you and you post a lot about it as well. Which is the thinking and it's very Buddhist and I've heard them described as angry Buddhists, which would be the Stoic minds, the Stoic principles. And I love that you. Always regularly, religiously, will post about Stoic habits. Things, for example, and I was telling two assistants that work for me today about this very idea, which is, let's control what we can control. Let's don't worry about what we can't control. And if you approach life, you approach trading like that, what can we control? Man, everything becomes a lot easier.
23:53 Speaker 00 All the friction in life, all the nonsense in life, it just slows down. What can I control? Yeah, I've got dreams of this, I want to do this, but I can't control that. So let's just focus on right here. Love that.
24:06 Speaker 01 I always applied that with my psychology books and things about your trade management. You choose, you develop your system, you pick, look at your signals and your backtesting and your trade management, your stock loss and your trailing stock, just what you can control. And like you said, it just cuts out all the opinions, all the predictions, all so much stress and like, oh well, my stock loss was hit and then move on to the next trade. Like, oh, good, it's still running. It's like you said, it just makes your mind quieter when you cross all the external silliness. It has nothing to do with your trading or even what you're going to do. But like you said, they just get sucked into that. Focus on the stuff that doesn't matter completely, which is really odd.
24:45 Speaker 00 You and I are in roughly the same age group, both Gen X, I believe. But you know what's funny? I'm sure you're the same way, or maybe you got lucky, but no one talked to me about this kind of stuff when I was younger. Nobody. I'm guessing with you, you might have been similar to me, maybe late twenties, thirties, even forties, it starts to come across your desk. But it's like, where was this? Now, a lot of young people today, they've been exposed to, for example, Ryan Holiday has written many books about Stoicism. A lot of younger people probably got exposed to it earlier than we did. I'm jealous of that because I didn't hear that kind of stuff, did you? As a young person?
25:21 Speaker 01 No, but I was an avid reader. I've been trolling around libraries and bookstores and reading for as long as I can remember, even my late teenage years. I hardly ever stumbled across any Stoicism. I don't think I stumbled across Marcus Aurelius until maybe 10, 15 years into reading. I mean, how in the world was that hidden? I guess it was more popularized later, but it was just not popular. It was ancient books. I guess Ryan Holiday and some others helped bring it to the forefront.
25:46 Speaker 00 Well, I've got a theory about that. As you're talking and I'm thinking to myself, Gen X was on the front lines of the woke indoctrination camps when it came to schooling. I'm sure if I could go back to my college days in late 80s, early 90s, I'm sure most of the subjects, topics, books, et cetera, that were coming across my desk were probably nonsense. It's probably completely nonsense. Now, I feel bad for the kids today. It's far worse today. Who knows what the poor children are being taught today at university? Actually, I know what they're being taught. I'll try to say this in a family-friendly way. I have a nephew at the University of Virginia. His first year there, his very
26:26 Speaker 00 first class, the class was, let's use some Thailand terminology, essentially the class was about ladyboys. And I'm thinking to myself, you know, I told my sister, I was like, what the hell is going on? What is this? This isn't education. This is indoctrination camp. Now, maybe some people are listening and they're saying, well, hold on, Mike. This guy, Mike, is going off the rails. Well, Mike's not going off the rails. I've been talking like this. It's, I'm 18. So I'm the same guy. If you like me, fine. If you don't like me, fine. If you're a weirdo and you want to be doing strange things in Thailand, hey, that's your cup of tea, not my cup of tea.
27:02 Speaker 01 I've always been concerned that everything I've learned and consider myself like an autodidact and polymath, or I've studied and studied and read so much stuff, it's staggering because I get bored and that's what I do. The school doesn't even teach basic literacy now, much less financial literacy, much less business entrepreneurship, investing, emotional control, even psychology, success, presence. It's just amazing to me that they don't teach life skills and they were just teaching like these high-level academic concepts that apply very little to anyone's life. But then they even go from that to now they start trying to indoctrinate weird things that have nothing to do with any kind of reading, writing, arithmetic or education, but then don't even touch on all the things that people will be using
27:44 Speaker 01 their lives like tax preparation or financial literacy. It's just staggering. It's civic.
27:50 Speaker 00 Let me pick a bone with you, though. I don't think you really want to use the word high level. It's a level. I don't know what level it is. It's a demonic level, maybe. There's another Stoic principle that you brought up, and I saw one of your blog posts recently, which, you know, it's basic. I'm not saying anything earth shattering when I say this, but contentment. The idea of being content. Like, okay, I've got a plan. I will execute each day. But if I don't get this reward, or I get some kind of less reward today, that I find a way to stay in the moment and content right now. And I see too many people that that's really hard for them. You're just happier when you're content.
28:30 Speaker 01 I just want to clarify, high level, I just meant like algebra and calculus is what I was talking about. High level, like a different language.
28:36 Speaker 00 High level Thai ladyboy studies.
28:39 Speaker 01 Nah, I wasn't on with that. I know, that's craziness. I was just talking about high level, like, stuff you never use, like calculus. But yeah, the contentment, that's the whole thing about all this. But we'll get back to dabble into the political thing. But the contentment is like context, like according to who? When people say stuff like whatever their political beliefs are, it's like, according to who? According to what context? If you said this to someone in a different country, whatever, an American, I mean, the most privileged people that exist in the history of civilization are modern day Americans. And to somehow twist it and not be content with what we have or not appreciate what we have or not to understand what we have, where it came from, how it was built, and how not to appreciate where we're at and how all these weird, strange narratives victimhood. It's funny, why do all these psychological success blog posts?
29:21 Speaker 01 And like, almost everything is political now, like victimhood, like the things that are negative, you can almost put it into political terms like victimhood. And not believing in yourself and believing you don't have control of your own circumstances and not having the ability to take risks and not taking self responsibility. All the things that are like, success principles are like almost political movements now. And those are the negative aspects that cause you to be unsuccessful. But now they're like political movements.
29:47 Speaker 00 Men and women are different. We have different constitutions, so to speak. I feel very sad for men who walk into the public arena, whether that's X, Facebook, LinkedIn, men that walk into the public arena and profess their victimhood. The reason I feel sorry for them is because no man of success
30:12 Speaker 00 Will have any respect for you. If you walk into the public arena and you feel like, okay, I've had all this schooling and the schooling tells me, I must share my feelings and this and that and whatever. No, no, no, no, no. If you walk out there and you start talking like that, you don't know who's seeing you. You don't know who's watching. You don't know who you might bump into. If you walk out there into the public arena and you start talking about victimhood and this and that and some sin from eons ago and that's put upon you. Man, I feel sad for men that do that. That's just the wrong path.
30:48 Speaker 01 Emasculation is disturbing to see people emasculate. You almost fail before you've even begun. If you're starting out emasculated, then not being powder and in charge of your own destiny. I don't understand it. Come from very humble backgrounds and I've always, you know, the external world had no bearings on what I was gonna do. I had very focused goals. I had written goals, what I was gonna do, and that's why I directed my time and energy. I can't imagine directing my time and energy into victimhood or any strange mindset, the growth mindset versus the fixed mindset. And the abundance mindset versus the scarcity mindset. I mean, these are psychological principles to success.
31:22 Speaker 00 As Gen X men, we were probably on the forefront of attempting to tell men that any aspect of masculinity was bad. And I think there is a counter-revolution, so to speak, happening right now. And frankly, it's being led by Elon Musk, who is a man that when it comes to men, every man just looks at him and says, wow. It's not only is it the words, it's the action, it's the doing. And I think there is starting to be a revival of men who say, you know what? We gotta start leading again. We can't just sit back.
32:05 Speaker 00 We just can't listen to all this kind of stuff that we've listened to. The division, the toxic aspects, the victimhood, the identity politics. This stuff has been a drain and a major waste on society. I'll bring it back to trading, for example. I'm sure plenty of young men who otherwise perhaps could have fallen into love with trading and gone down this path and mastered everything, they might have gotten sidetracked in university to talk about subjects and topics that are useless and waste their time and then wake up many, many years later and maybe they're just angry or something. I do hope there is a revival.
32:45 Speaker 00 It feels like there's a revival of leadership in people doing the right thing. I hope so.
32:52 Speaker 01 There needs to be a psychological shift and an awakening in the world, the Western world. I think Asia has not gotten off tracks for the most part, but a lot of the Western world has gotten very bizarre, like even the entrepreneur. Elon Musk is undisputed the greatest entrepreneur that ever lived. Undisputed. I don't know how you even begin to, somebody say that Elon Musk is not the greatest entrepreneur and probably the greatest minds that ever existed. And the West is almost starting to even demonize capitalism itself to a level like it never has in entrepreneurship and like thinking somehow that there's some solution to all problems instead of self-responsibility and thinking that even the government that causes problems with the monetary policies are just going to solve the monetary policy problems. It's getting very bizarre or people are not educated.
33:36 Speaker 01 We're not educating people coming up in the world or not educating the right ways. It's getting bizarre, like they've broken from logic and reason and math and gone down a different road, which is could be the destruction of civilization itself.
33:49 Speaker 00 Part of this stems from the idea that there will be a safety net for everybody. There's no such thing. There is no safety net for anybody or everybody. It doesn't work like that. The only thing you can do as an individual is to count yourself. And so again, I'll take it back to young men. If young men listening think the safety net comes from Washington DC.
34:15 Speaker 00 You're already gone. Okay, maybe you're working for some nonprofit. Maybe you're working in politics and you're getting paid to go out there and say that, you know, the government can create a safety net and the government can take care of you and the government can tuck you in at night. And maybe if you're really lucky, the Fed chair will stay the night with you. But that's not the way the real world works. I hope this awakening that you and I are speaking of does start to unfold. I also don't think, just to be clear, I don't necessarily think any one election is going to make a difference. I think the real issue is just men waking up and saying enough, we're going to take personal responsibility and that's the real issue.
34:53 Speaker 01 Both of my children are on the extreme polar opposites of the political scale. All of my children have those funny talks. I get to see all the different extremes in both directions. They always try to get me pinned what my politics, like my politics is economics. I don't only be care about politics, care about economics, like the economic reality of what the people are doing, what the parties are doing, what their history, what they did, where the consequences of what they did, what their bills are new, the opposite of what they're named. They should name it the blow up, whatever that first one was. The first one that they passed during the pandemic brought up prices 20, lost 25% of the US dollar purchasing power when that was passed. 25% of the purchasing power of the US dollar and it's probably worsened real estate and groceries.
35:36 Speaker 01 And then the Inflation Reduction Act, which was almost designed to spike inflation and bipartisanship inflation. I can't begin to try to blame somebody for inflation. It's been bipartisan for at least 20, 24 years. My kids are talking economics terms. I'm talking who I want to vote for. Like you said, I don't think any election will solve this. This is much deeper than anything can imagine. So I just look in economics terms for politics. So it makes it a lot more clear for having opinions based on the poll, based on the economics of the policies, especially the unintended consequences of those policies.
36:09 Speaker 00 Yeah, now that's an interesting point, too, is that I start to wonder these days, after everything I've seen unfold, after...
36:20 Speaker 00 All of the conspiracy theories that I was told were conspiracy theories turned out to actually just be the truth. I don't know what to make of things these days. I don't know what's the truth and what's not the truth. The only thing right now that I know is the truth is the price of a particular security or instrument at any moment in time. At least if it's on an honest exchange. If there's some liquidity and you can get out, you can get in. The price is about one of the only things that's real or that you can know is true in modern life because you don't necessarily know what any other individual is going to do. You don't know what any politician is going to do. You don't know what any economist is going to say. You don't know what any Fed official is going to do. But the price action is quite interesting.
37:04 Speaker 00 I made a post on X this morning and it was quoting something from Bar Chart. But essentially it was looking at mortgage rates as going up over the next six months. And I kind of mockingly said, well, hold on. Didn't they just cut rates? Why are rates going up? And like, that's not a prediction from Mike Covel. That's just an observation of the silliness of the system.
37:27 Speaker 01 It makes no sense to people. They just can't understand it. The Fed can lose control of the yield curve. The stock market can drop when they start cutting rates. That's happened many times in the past where they were dying for cutting rates and they think that's going to cause everything to go up, it's only better. And then the market plunges. Then they have, where you have all the macro things point to a recession. So usually stock market does crash every time or have a downtrend. When you cut rates and the market has a recession, typically historically about 20% drawdown with that, both those things occur.
37:57 Speaker 00 You're making that observation, but you're not telling anybody, oh, that's the trading signal. You're just observing what you're seeing and the system is something different.
38:05 Speaker 01 Exactly. Yeah, I'm just pointing out like what's happened in the past. Sometimes I'll even say stuff like in my subscription group and just say, we tried to, we trade the price action because we could have a really good, strong downtrend here. So if we get the signals, we'll take it. But like you said, it's not based on trade decisions. It's just like talking economics or talking macro or observing the economy. It's not trading signals.
38:24 Speaker 00 As we wind down, I brought up earlier the conversation of the movie's media film about money and markets. And I was thinking, what about music? I guess Pink Floyd's Money is the first one that comes to mind. Sort of an ABBA song about money too, but it's not as interesting as the movies. The movies are great.
38:43 Speaker 01 Yeah, Dumb Money is a new one that really is a good new trading movie. Shows the GameStop craziness.
38:48 Speaker 00 It was a documentary?
38:50 Speaker 01 No, it was a movie. It was a Hollywood movie and they did really well. It was funny, funny about how the GameStop trades and how everybody in the GameStop move or trade in the volatility. There's people that got out and was rich off the top or close to the top in reverse and those people that gave it all back. Just held GameStop all the way up and all the way back down. It was fascinating.
39:09 Speaker 00 I'll have to check it out. I've not seen it yet. One last thing I wanted to bring up, which is it's kind of interesting about this particular world that you and I exist in. And I love doing the podcast for this reason. And in my seat, it's harder to do when I'm in Asia, but in my seat where I've been over the years, I've ended up connecting a lot of people that were not connected. And I'm sure you have too, quite enjoyable thing because ultimately in this world and not just only trading, that because of the technology, we've all become more and more lone wolves, so to speak, especially men. It is nice to find people, chat with people that have common views.
39:52 Speaker 00 The whole crew of American guys here in Ho Chi Minh City that we all share similar beliefs. Let's just put it this way. However, anyone thinks that I have sounded on this particular podcast in terms of politics, multiply it by a million and you'll never hear that from me because that's the real stuff that's coming down the pike. Anyways, I do love the fact that like you and I will catch up like every year and I love this, being able to have conversations with interesting people that, you know, look, you're consistent. You're always out there. You are one of the most consistent people and you just love spreading the message of what interests you.
40:28 Speaker 01 That's like a flow of consciousness. Only thing I was ever inspired to do was invest in trading and social media. All the other stuff, other people go, oh, let's write a book and let's do an e-course or whatever different things that I've done. But it's always been this most natural thing for me for social media. It's almost like a game that I play. People play video games. I play social media. I don't know what it is that I like sharing. Like you said, sharing things I find interesting and knowledge that I don't know how the impulse to share is they come to my mind and see what interests people and how they react and see the feedback and stuff. It's crazy how it just adapted. What's really odd is I think you were actually the original inspiration. What you did on your personal Facebook page, probably in 2012 or 2011, inspired me to go into social media and to share trading.
41:11 Speaker 00 Yeah, I got burned out on Facebook. Once Zuckerberg censored me during COVID, I pretty much got tired of Facebook. I don't know how you feel about this, but I feel like, and I've said this to other people, and they kind of look at me like I'm crazy. But I think X is gonna win, and it's gonna win big. I don't know what the timing is, but there are too many smart people there. And eventually, everyone else is gonna say, you know what, I need to be there, because that's where the human brain is, so to speak. How do you feel about that? I feel like X is gonna be the winner in the long run. I don't know what the long run is or when it'll happen, but it feels like X has this momentum.
41:49 Speaker 01 I've always thought Twitter was the most powerful communication tool ever created in the history of civilization. I've always thought that about the original Twitter, but I think X is a multiplier. But I guess right now, it has to overcome all the political battles and polarity that's gone on with X. If he could overcome all the political madness and get advertisers back, monetize, and then, like you said, it'll just blow up. I don't know what's holding them back except for a shift in the capital flows back into the advertising side to fund it to grow exponentially. But how do you bet against Elon? Elon has never lost anything. You know, he's never lost. He's one of the only people ever to have multiple billion-dollar wins that are staggering. Even like Mark Cuban and Mark Zuckerberg even say billionaire is just a one-time thing. You're in the right place at the right time, do the right thing. You got lucky, you
42:34 Speaker 01 have the skills, you navigate that you're lucky, you got to be a billionaire. And that's what Cuban and Zuckerberg believe. Well, Elon Musk has done it over and over and over and over. It's hard to even believe what he's pulled off. How can we bet against him not making X the most powerful platform in the world?
42:49 Speaker 00 I won't name the name that I'm thinking of, but one of the two names that you just named. Apparently, older in life, still a billionaire, has lost his marbles on X. I'm not gonna name him. Anybody can figure it out. I don't know what happened to him, but he's gone sideways. It's not Zuckerberg. Zuckerberg's got his own issues, so I'm talking about somebody else.
43:10 Speaker 01 It's strange to watch a cognitive biases play out in real time where somebody gets the wrong cognitive pathway. And then they double down, triple down, and just keep going in the wrong direction. It's pretty fascinating. Abandon logic, abandon reason, abandon the math. And social media allows that for someone to go crazy online and let you watch it.
43:28 Speaker 00 I haven't done it yet, but I've decided, and I've got some assistants that have pushed me on it. Sometime here in the next couple of months, I'm gonna get into regular video snippets, regular shorts. I haven't wanted to do it for a long time, and I've played around with all kinds of equipment and lights and this and that. And I finally just said to myself, it's too complicated. I'm just gonna put the newest iPhone in front of me and just talk. Let the other people edit whatever, get it live. I just don't want to make it complicated. You can go overboard with equipment, and I at various stages have. And I just don't think it's needed. So that's my upcoming plan.
44:05 Speaker 01 It's interesting. I just launched into the shorts and what do you call them? The reels and TikTok media, the short form. I just launched into that. Same thing you thought, you know, I'll just do short on my phone in my face. I'll just talk. But I ended up doing a little software thing where I just have some of my best teachings or tweets or long form in videos with software. And it's done really, really well. It's been pretty stunning how well it's done. I always break all the rules. People would say each platform has to be the right native content for it. And I just put pictures of my tweets on Instagram, kind of hundreds of thousands of followers and break all the rules. They love the teaching. They love just the short, like a micro little trading thing. That could be big.
44:42 Speaker 00 I've never really done an in-depth discussion with you about it, and you probably only tell me so much. I do tell people that if they want to observe somebody who definitely has a handle on social media, you do. And you are not specific to one app. You've kind of got a handle on a lot of these different apps. It's quite impressive. That's an entirely different skill set and whatnot that we haven't talked about today. But if somebody's interested. And making observations like as one of my assistants would say, following in the footsteps, basically turtle thinking 101, you do a great job of that. It's a lot of time. I know that it's a lot of time. It's a lot of energy. Unless you've got some secret team in India of 30 guys working for you. I don't know. You look pretty well rested. You look like you're sleeping well.
45:27 Speaker 00 So.
45:28 Speaker 01 Yes, it's funny. I've done for so long now. It's like a trading system. I have a social media system that I follow and I exponentially get more returns on the content I create and started a big picture, then whittled down into like create one thing big and then whittle it down into different things and go across it. And the speed that I can do that is probably staggered. Probably take some normal person, because I've done it so long, probably take a normal person, creating the content and sharing it all, doing what I do, it'd probably take a normal human being, if they could do it, take 10 hours a day. But I can do all mine, no more than hour and a half, half the very most. And I enjoy it too. And then that's what I'm telling me, just messing around on social media. But it's a systematic process and doing so long, you get faster and faster. I don't have to think I have a systematic process. It's like if I create a short form
46:11 Speaker 01 video, I can put it on Tik Tok and Instagram reels and Facebook short and YouTube shorts.
46:16 Speaker 00 You're welcome to send people to a place, Steve, but I think I've done this with you before, that even though you've got such a, not basic, but you've got a name that's not like, I mean, I've got a funky last name. So it's very easy. Even if you search for my last name, you generally find me. If I search for the word Burns, I'm not just going to find you. However, if I search for Steve Burns, I'm gonna find you. A filtering system, that if you're listening and you can't find my guest today, he probably doesn't want to know you. Because if you can't find Steve Burns on the internet, there's something wrong with you. Maybe there's just something wrong. There's not enough IQ, brain damage, something. So Steve, you're welcome to give a URL, or we can just go with the, if you can't find Steve Burns, you've got a problem.
47:02 Speaker 01 If you Google Steve Burns trader, just to jump over the blues, every now and then that blues clue Steve Burns will creep up in my search thing. So you just Google Steve Burns trader, you know, you can see my website and Twitter. Twitter is, it's at S Joseph Burns. So yeah, like you said, it's hard not to find me and all my resources.
47:20 Speaker 00 Hey Steve, listen, I appreciate it. We shall talk again soon.
47:25 Speaker 01 Great talk as always.
47:32 Speaker 02 I see a time when those awake will understand how to make money in up, down, and surprise markets. Whether a new trader or experienced, college student or financial advisor, protecting against a crash or just trying to make a lot of money, trend following offers everyone an answer in uncertain times. To get started immediately, send me an email, [email protected] . I will send you the right trend following steps to take along with my free video. But if you want to buy and hold, trust the government and trust Wall Street, this is absolutely not for you.
Next Ep. 1314: It's Time for Motivation with Michael Covel on Trend Following Radio Page updated November 7, 2026 · transcript and summary are machine-generated
