Pod Insights Michael Covel's Trend Following Ep. 1373: The White Lotus with Michael Covel on Trend Following Radio About this episode Please enjoy my monologue The White Lotus with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.
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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/
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Hope you enjoy my never-ending podcast conversation!
Transcript 0:00 Speaker 00 My episode today is not about something in the sense that it's not about a reaction to some headline today. It's not a prediction. It's not urgent, and that's intentional. The subject today, metals, patience, and long-term trend following, can't be understood so quickly necessarily. I mean, if you get it, you get it. If you don't, you're still learning. That's fine. But look, speed is the thing that ruins people these days. I gotta be fast. I gotta be fast. I mean, if you're in a situation as a long-term trend follower and you're worried too much about slippage, maybe you're more focused on day trading. So if this episode feels a little bit slower than what you're used to, that's good.
0:45 Speaker 00 We can use a little slower. Just trying to wake up every day and compete with all of the information, that ain't the way to go. Let me give an example of what a normal morning used to be. You sit down with a coffee. There's no rush. You got your prices written down, not out of nostalgia, just this is what you do. You look at gold, you look at silver, you see what's going on, compare to yesterday, last month, whatever. No big alerts, no commentary. No one's telling you what it means. I mean, this is what it used to be like essentially before the internet. But even then, you still have the Wall Street Journal screaming at you. You still have the nightly news. But these days, you know, even before you finish that sip of coffee, you've been told,
1:26 Speaker 00 gold's going higher, silver's going higher, rates are changing, a politician just moved the market. I mean, nothing has actually changed, but psychologically, everything feels urgent. And that shift matters because if you're handling the urgency in the incorrect way, you're fucked. I mean, think about it from a fundamental perspective. Gold and silver are not neutral. Gold is never discussed like wheat or corn. It's discussed like a verdict. Gold up means something is wrong. Gold down means something was fixed. Silver, another layer. It's cheaper, more volatile, not cheaper these days. The emotional charge of these metals, it creates impatience.
2:10 Speaker 00 And impatience, if you're really trying to get ahead, it's gonna be lethal for you. So like, here's the lived experience for most people. Gold does nothing for a long time. No headlines, no excitement. Then suddenly, gold is everywhere. People read, they listen, they feel informed, they buy. Maybe gold stops moving. Not crashing, not exploding, just stops for the moment. That's where the discomfort begins, because if you don't have a system, what do you do next? I mean, if you look back to something like 1979, the late 70s, with that major gold boom and move, something eventually happened after it went up. That doesn't mean it's gonna happen the same way this time.
2:53 Speaker 00 But my point is this sense of impatience, this sense of urgency, this sense of perhaps doom, and how do you handle it? Because ultimately, this is about buying and selling. This is about trying to make money. But your psychology is playing on you big time. Look, crashes are dramatic. Sideways markets, corrosive. As Ed Secoda calls them, his whip saw markets. Crashes scare people out. Sideways markets wear them down. We all can look at the price data. Gold and silver spent enormous stretches of time doing nothing. Those periods don't make headlines.
3:35 Speaker 00 Even those early breakouts, no one pays attention. People just don't pay attention. They leave the room, they're not angry, they just leave bored. Boredom can destroy accounts even more than panic. Look, this is not unique to metals. Look at cocoa. Cocoa was dead for a decade, no interest, no excitement. Then it exploded violently. If you weren't there for the boredom, you missed the fortune. Look at lumber, years of nothing, then a vertical move so extreme, people thought the data was wrong. Now, people who showed up late? They got chopped to shit. The money was made by those who endured the nothing. Same thing in oil. Long stretches of grinding ranges followed by sudden repricing.
4:20 Speaker 00 People don't lose money in oil because they misunderstood geopolitics. They lose money because they can't tolerate inactivity. They've got the day trading excitement gene. They gotta feel something. They gotta make it big for that day. They're just degenerate gamblers, really. Who's they? I'm not sure who they are exactly. But if you take a sidestep out there to the real world. I mean, the amount of organized gambling these days. So you have an absolute boom in organized gambling. And then you have a situation where people are trying to trade markets with no strategy. Another market, look at uranium, ignored, mocked, written off. And suddenly it wasn't.
5:05 Speaker 00 The pattern never changes. Years of nothing, then a move so violent, it rewrites narratives overnight. People don't fail because they're wrong once. They fail because they can't tolerate repetition without reward. They can handle a loss that feels meaningful, whatever the hell that means. But they struggle with waiting, false starts, being early, being alone. Gold and silver exploit this weakness perfectly. And when you put all of that emotional stuff aside, when you put all of that thinking aside, and you just trust to a trading system, you trust to something like a trend following trading system.
5:47 Speaker 00 Tell me a better way to have traded gold or silver. There is absolutely no better way to have traded gold or silver than trend following. There was no chart reading motherfucker out there that told you he knew what was going to happen by staring at a fucking chart. Fucking liar, fucking crazy, fucking bullshit, just fucking nonsense. There is no chart reading that told you gold or silver were going to boom like they have. But if you didn't care about that, and you just said, damn it, I'm going to follow the price as it goes, then you are on board. But again, it's that pressure, the pressure that boredom creates, the pressure to act, the pressure to quit.
6:33 Speaker 00 Let me step outside the markets for a moment. And let me just look at a story that really has nothing to do with finance and I'll bring it back to the markets. Because this pattern that I'm talking about, the long nothing followed by a sudden payoff, it shows up everywhere. Here is somebody you might not be familiar with. Same name as me, at least the same first name. His name is Mike White. If you don't watch TV shows, that's fine. I'm not a big fan of a lot of stuff going on these days. I did actually happen to see a couple of episodes of this guy's first season. Mike White, writer, filmmaker. He created a show called The White Lotus, became a global hit. I think the ladies love this stuff more than the guys do. Awards, ratings, cultural relevance. But that's the end of the story, not the beginning.
7:17 Speaker 00 What was his start? Before this White Lotus show, Mike White, 25 years on projects that didn't last. Shows canceled after one season, pilots rejected, script shelved, not once, not twice. Decades. From the outside, hey, that's irrational shit. From the inside, it feels like floating. Not moving forward, not failing dramatically, just staying. Staying with, in a way, the boredom. Most people would quit. People require markers of progress. Degrees, titles, promotions, validations, pats on the back from jackasses you don't really even like. Markets don't care about that stuff.
8:01 Speaker 00 They don't offer anything reliably like that. Creative work doesn't either. You can do everything right and still get nothing for a long time. Is that failure? Is that variance? Well, if it is variance, variance is intolerable to most people. But after this White Lotus show took off, White was asked how he felt. He didn't claim he was a genius, he didn't claim he had foresight. He said it felt like being a surfer who had stayed in the ocean long enough to finally catch a wave. That line matters. That wave matters. Surfers don't predict waves, they don't demand timing, they stay in the water. Go listen to my podcast episode with Bill Dreis.
8:44 Speaker 00 The trend following surfer who built his whole life around surfing. This isn't necessarily about inspiration. It's really about probability. Mike White didn't win because he guessed right. He won because he didn't quit. He made many survivable bets. That's the connection. That's the connection to trend following. Survivable bets. Can you do it? Do you know how to do it? Now, if you don't know how to do it, I can help you. Drop me an email. I've helped a lot of people over many decades. My email's easy. [email protected] . But let me bring it back to gold and silver. Most people see the metals as binary events.
9:29 Speaker 00 Either it works or it doesn't. Is that mindset the path to success? Or is it the mindset that guarantees failure? Trends rewards survivability. They punish urgency. You can't make a damn prediction on that silver market. Find me anyone who made that fucking prediction. Did not happen because if they had the prediction, hell, they would have already been in long well before. I mean, think it through. Trend following is the only option. The only opportunity for the unpredictable big move that no one can see coming. Because you just take a little bit.
10:14 Speaker 00 And if it goes your way, you take a little bit more, but you keep trying. There's a big problem here, though, because modern life compresses patience. We can see success everywhere. Edited, curated, compressed. What you don't see are the years of nothing. You don't see that. You don't see the system that just waits. You don't see the system that takes small losses. I posted Paul Mulvaney's 2025 track record recently. He ended up the year down 10%. A pretty big drawdown in 2025 and a pretty big recovery. What was interesting was to see the replies, to see the responses.
10:58 Speaker 00 Somebody noted, well, he lost 10% on the year because I did not post the end of year return. So people crunched the numbers themselves. They had 12 data points. Wow, what a rocket scientist you are. You crunched the numbers. You didn't bother to ask whether or not he had a prior 20 year track record. You didn't bother to look at his last five years of performance. You were fixated on the one year because that's all you had. And you were fixated on the end of year performance. You didn't ask what came before it. What kind of a scientist are you after all? If you don't care about the details.
11:40 Speaker 00 Somebody else said, but if he had just used the stop loss. Hey, motherfucker. Guess where trend following drawdowns come from? They don't come from one market going against you 30 or 40%. They come from many markets going against you 2, 3, 4%, whatever. It's a lot of small losses added up. The rocket scientists out there that try to analyze trend following where they've got no freaking clue what it is. After all these years and frankly, decades, I'm still shocked that so few people have an opinion about trend following, but don't know what the fuck it is. It's quite amazing.
12:24 Speaker 00 And if you actually want to be a trend following trader, it's a great thing for you. Because if most of the world is uninformed, and let's be honest, they are. Did you happen to see the Senate hearing with Senator Hawley asking the medical doctor if men could give birth? And this medical doctor, this lady refused to answer the question 11 times. She refused to say that men could not give birth. Ladies and gentlemen, if you are in the markets and you are trading against absolute fucking morons who want to give you their money, please, you should be thankful. You should be happy that such an opportunity exists.
13:08 Speaker 00 Then in the modern age, we actually have people who don't care about science. They don't care about data. You know what? We're in a zero-sum game. Be happy about that because you're competing against absolute morons. Oh yeah, don't get me wrong. There's some really smart people out there too. But there are more than enough dumb people who want to give you their money and be happy about it. It is a crazy world. So you see, markets haven't changed. Tolerance has. Look, back to my surfing analogy, staying in the water costs something. Time, doubt, boredom, missed opportunities elsewhere. The cost is paid before the reward.
13:52 Speaker 00 Most people want the reward first. You see how we've got this all messed up? People don't quit because they're wrong. They quit because they're exhausted. They mistake fatigue for insight. Back to my example with Paul Mulvaney. You see, metals aren't broken. They're filtering, they're filtering impatience, they're filtering narrative addiction. The wave will come and always does. The only question is whether you'll still be there. That's always where trend following enters quietly, not as a doctrine from me, not as a pitch from me, as structure. Trend following exists to solve one problem. How do you stay in the water long enough without destroying yourself? This assumes most attempts won't work. Boredom is normal. Whip-sars are inevitable.
14:37 Speaker 00 It doesn't promise timing. No chart reading, motherfucker. It promises endurance. You don't need to predict gold. You don't need to explain silver. You don't need to have a perfect narrative or a strong opinion. What you'd need is the ability to endure uncertainty longer than most people. Mike White, the White Lotus guy, he endured it, not because he knew when his moment would arrive, but because he didn't step out of the process when nothing seemed to be happening. Markets reward the same behavior. They don't reward conviction. They don't reward intelligence. They don't reward speed. They reward survival. And that idea, survival, is where this conversation actually needs to go. Who actually survives?
15:21 Speaker 00 Not in theory, not in hindsight, but in real time, when nothing is happening, when boredom sets in, when doubt creeps in, who survives? You see, if survival is the requirement, then the next question becomes uncomfortable. What does survival actually look like? Because when most people picture successful traders, especially in the markets, like gold, silver, they imagine intensity, like how I sound right now, intense. They imagine speed. They imagine constant action. They imagine someone always doing something. But that picture is wrong. That's the Hollywood picture. One of the most damaging confusions in the markets is the confusion between activity and skill. Activity is freaking impressive. Skill looks boring.
16:05 Speaker 00 Those 12 data points for Paul Mulvaney in 2025, where he ended down almost 10%, that looks boring to people. That looks bad to people. But they're not digging in deep. Markets go in long on even stretches. They spend more time doing nothing than doing something. Boredom is not a flaw, it's a signal. The people who survive don't look dramatic while they're surviving. They look inactive. They look patient. They often look like they're missing out. And that misunderstanding, mistaking restraint for weakness, is exactly where most people step out of the water, just before the conditions change. Because if you study the people who really last, they don't look impressive in real time. They don't have dramatic stories every week. They don't sound urgent.
16:50 Speaker 00 They probably sound a little more calm than me. They don't talk much. They wait. And that waiting is often misinterpreted as indecision or fear. It's structure. Here's a sequence I've seen repeated. Someone enters gold because it finally starts moving, which is what we've seen. They feel late, but relieved to be involved. Gold pulls back, not a crash, just enough to create doubt. They start checking prices more often. They read more commentary. They tighten their emotional stop, not their financial one. They exit, not because the trend ended, because they did. Six months later, gold resumes higher. They don't re-enter. Why? Because emotionally, they've already paid too much. Not a price problem, human endurance problem.
17:35 Speaker 00 You know, many people think failing traders are reckless, failing in the moment, but they're not. They're cautious, too cautious. But often, you know, if you exit once, re-entry feels humiliating. If you're not a trend following trader, for example. It's like admitting failure. So instead of following price, which is what I preach here, they protect their ego. An ego is far more expensive than risk. Gold and silver, though, they also expose something else uncomfortable. Most people say they are long-term thinkers, but their behavior says something quite opposite. They expect validation yesterday. Weeks, months, markets don't care. Metals in particular move on timelines that don't align with anything that has to do
18:18 Speaker 00 with our modern attention spans. That mismatch destroys accounts. Humans crave narratives. Narratives create comfort. Markets don't reward comfort. Markets reward alignment when you're on the trend. When people say they lost faith in gold, what they really lost was patience, and they now got some discomfort. Let me bring it back to surfing one more time carefully. Surfers don't paddle non-stop. They don't chase every ripple. They wait for structure. They wait for conditions. They read the conditions. They accept that most waves are unridable. That restraint is the entire game. Markets are no different. You see, staying doesn't mean stubbornness.
19:00 Speaker 00 It does not mean holding blindly. It means having rules that outlast emotion. It means accepting false starts. It means respecting exits and respecting re-entries. That's harder than it sounds. Bottom line, metals are not sending a message. They're asking a question. Can you wait? Can you stay? Can you endure ambiguity without inventing stories? Most people can't, which is why opportunity persists.
19:25 Speaker 00 Back to Senator Hawley asking the good doctor if men can give birth. People need to invent stories. So she invents a story that men can give birth. And guess what? If you're competing against the markets with people who think men can give birth, you should be mighty excited. No big ending here today, no crescendo, just a simple truth. Markets reward those who stay in the water longer than they feel comfortable. Mike White, White Lotus fame, he stayed. Surfers, they stay. The few profit in metals, stay. Everything else is noise. Have a great week.
20:10 Speaker 00 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.
Previous Ep. 1372: The Chart Fight to Start 2026 with Michael Covel on Trend Following Radio Next Ep. 1374: Excitement is Expensive with Michael Covel on Trend Following Radio Page updated November 6, 2026 · transcript and summary are machine-generated
