Ep. 1381: Integrity with Michael Covel on Trend Following Radio

Please enjoy my monologue Integrity with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive. --- 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 https://twitter.com/covel Facebook: @trendfollowing https://www.facebook.com/trendfollowing/ LinkedIn: @covel https://linkedin.com/in/covel/ Instagram: @mikecovel https://www.instagram.com/mikecovel/ Hope you enjoy my never-ending podcast conversation!

• 0:00Speaker 00

  I want to share some thoughts about life, the markets, the players, about integrity. And of course, I'll bring it all back to trend following. This big files release in the last week from this deviant guy Epstein. Pretty shocking stuff. Not necessarily for me, because when you're in the Wall Street world and you meet people, there's a lot of weird shit out there. A lot of not so good people. And don't get me wrong, there's a lot of great people and I have them on this podcast. They're in my books, they're my friends. Great individuals, high quality, the best.

• 0:44Speaker 00

  But there is a dark side. When you have greed and fear and you have money rolling around, some really degenerate people will get involved. And this files release, when you start to see some of the headlines, what's going on behind the scenes. Unfortunately, we all do have to consider the risk at some time in the future that things stop working, or things don't work well, or a major war arrives, or the markets somehow or another break. That could happen. I mean, if there's an elite group of people behind the scenes, controlling things in such

• 1:25Speaker 00

  a dishonest and sick way, that could potentially affect us all. Now here's the positive part of that. Until it does, we have something on our side, and that's the price. Because no matter what happens, the price is telling us what is happening. So the news can be saying this, and the price is doing that, then what do we believe? We believe the price. Because there's too many bullshitters out there. Too many people with too many stories, too many narratives, too many manipulations. And if you find yourself listening to these people, trusting these people, you get what

• 2:10Speaker 00

  you deserve. Oh, you could have a big run up. But you could have a big rundown. Think about all the people with no plan that were buying silver and gold at all time highs, and then having their face ripped off a few days later. They didn't have a plan. And that's the key with price. Price itself is a plan. Look at the price. You know where the market is. You essentially know where the world is. If things are going to hell in a handbasket, the price is going to show you. Now, if the world is going to hell in a handbasket and the price is not showing you, well, you still have to believe the price.

• 2:52Speaker 00

  You can instinctively, you can intuitively, you can be really smart to know that things are a disaster. But if the price tells you something else, what are you supposed to do? I would argue, follow the price. Use the price. That is your truth. Let me bring it back to the top with this big scandal, this files release, this twisted character, who obviously was just a point person and there was a lot of people behind him. And maybe we'll find that out. But there was a side story that came out of it that got me thinking about something that I've been thinking about for almost 25 years, over 25 years. And that's Michael Saylor and MicroStrategy, which became Strategy, symbol MSTR.

• 3:38Speaker 00

  Now, plenty of people don't realize, but the Michael Saylor of today, this is his second act. If you go all the way back to March of 2000, his share price for Strategy was $313. It might have actually gone even higher. Today, it's currently at $134. But after that high in March of 2000, it basically went sideways at about a price somewhere $5 to $15 from essentially 2001 all the way to 2020. Like 19 years of no movement at all.

• 4:20Speaker 00

  Now, if you were a trend following trader for those 19 years, you were not in that stock. You might have been tracking it. It could have been in your tracking portfolio doubtful, but essentially 19 years flat. So we got this really young guy back in the late 90s, early 2000s, dot com era. He becomes a billionaire, a lot of it on paper. I remember he went on 60 Minutes, told everybody he was going to take over and essentially manage, run, however he phrased it, the healthcare system of America. And MicroStrategy, the very first company to essentially collapse during the dot com bubble. And then many others followed after it. And so then

• 5:04Speaker 00

  again, we get 19 years of sideways action, nothing to do. Until we get into late 2020, early 2021, and MicroStrategy breaks out to the upside. A new company strategy was started, Bitcoin related, owning Bitcoin. I'm not telling you anything new. Everyone knows this story. And from there, strategy ran back up to over 400 a share. I don't know the exact amount, 457 I think. And then in the last six months, it's collapsed to 134. Now that is one crazy chart, ladies and gentlemen. One insane chart. Over almost

• 5:45Speaker 00

  30 years, 19 years of sideways action, and then a big run up and a big rundown as a proxy for Bitcoin. Now we know there's all kinds of stories behind it. We can see Michael Saylor on TV. We can listen to what he has to say. Some things I like, some things I don't. But at the end of the day, go look at the chart. The chart tells you all you need to know. Again, as I said, 19 years flat, not a lot of action there. But there's no doubt, from 2021 until today, a lot of money has been made on MicroStrategy. And the best

• 6:27Speaker 00

  way to have made that money, following price as a trend follower. Because you don't have to know a damn thing about Bitcoin. You don't have to know a damn thing about Michael Saylor, or strategy, or the history that I'm talking about today. Not relevant. I mean, it's interesting. It's Trivial Pursuit. It's fascinating, frankly. But what's the point? There are so many stories out there about so many companies, and so many markets, and so many people. What do you do with it all? We don't have the ability to keep track of all that shit. And honestly, who wants to? I wish Michael Saylor the best. Now, you might be saying to yourself, "Hold on, Mike, you've said some negative things about Saylor over the years."

• 7:12Speaker 00

  Yeah, I'm getting to that. But ultimately, I wish him the best. I wish you the best. As far as I could tell about Saylor, he doesn't do illegal anything. He has just had two crazy acts of his career. He's made himself easily a billion plus. It's a very interesting career, a very interesting-looking chart. One of a kind. But he's an opportunistic guy. Now, yes, I did criticize Saylor big time. And who would not criticize him? I mean, if you're an honest broker, you'd say, "Gosh, this is all over the map." But again, opportunistic. He changed the company focus. He went into Bitcoin.

• 7:54Speaker 00

  He saw the action. He took a big bet. He blew it out. He did extremely well. Let me bring it back to the top of this episode. One of the reasons that I've come to appreciate Saylor is because in this big file dump, there's an email or a text that says, and I paraphrase here, "We could not co-opt Saylor. We couldn't sway him. He had not very good social skills." And I'm thinking to myself, "Wow." This guy who I've criticized, this guy with the crazy chart for his company, this guy who's made himself a ton of money,

• 8:36Speaker 00

  was not able to be co-opted by this nefarious Virgin Islands, quote, financier associated with all these intelligence agencies around the world. Michael Saylor was not co-opted because, and this is essentially what they said, he had an autistic vibe. Perhaps he was on the spectrum. Now, I don't know that to be true. I can see him on TV and he seems extremely nerdy. It would not surprise me if he was. I mean, I've met brilliant people on the spectrum. For example, Vernon Smith, who won the Newell Prize and actually brags about his Asperger's being part of his success. But I gotta love that, right?

• 9:18Speaker 00

  This guy Saylor, who people will say one day is the god and next day is the devil, a crazy career, but when these sick fucks out there tried to co-opt him, they could not. They could not bring him under the spell. They could not sell him on young girls. Now, look, I don't know all the details. Maybe something will come out tomorrow and it changes the whole narrative for whatever. I don't know. But at this moment in time, it sure looks like Saylor's perhaps affinity with being on the spectrum, or being on it, I don't know, saved him from literal demons.

• 9:59Speaker 00

  That's just a cool story. Really. And I think there's a lot of men out there like that who are focused on whatever they're doing. They're focused on their show. They're focused on their thing. And they don't give a shit about some greasy motherfucker who shows up trying to sell them on something that feels easy or too good or a little sick. And back to my situation. Yeah, I've met some really bad people in the Wall Street world. And I go the other way when I meet them. But they're out there and they want to get their hooks in you.

• 10:42Speaker 00

  They want to use you. They want a part of you. They want to ride you. They want to ride your success. And this is especially tough for young people to understand. Because when you're young, the big system comes at you. What I mean is a big corporation, maybe they want to hire you. The Goldman Sachs, the Morgan Stanleys. The companies that would no longer exist if not bailed out during the Great Recession. Plenty of other companies. But at the end of the day, they own your ass. You have to toe the line. You have to say yes sir to an asshole. And yes, big companies are essentially assholes.

• 11:26Speaker 00

  Because they don't deal with honesty anymore. There is no integrity. They blow in the fucking wind. So when you're a young person out there, you can look at the Michael Saylor story and you can say, wow. Over 30 years, look at that price action, that chart, that's crazy. Or you can say, this guy kept trying. He kept going. He kept trying to make something happen. And at the same time, when the evil showed up and wanted to twist his arm and manipulate him and pull him in, pull him in closer. Maybe get him into something compromising. He said, no. That's awesome.

• 12:10Speaker 00

  They could not co-opt him. But here's where it's tough. How do you know who's co-opted and who's not? How do you know who is a free man and not? It's not easy. It takes time. Back to those young people getting out of college. I got a job, I'm going to New York, I'm going to Hong Kong, I'm going to London. Oh, they put their golden handcuffs on you, huh? You gotta toe the line. You gotta say what they say to say. Now you're making a lot of money. You got enough money to buy a house. You got enough money to pay the bills. Next thing you know, five or 10 years goes by. And now they've got you. Now you're stuck.

• 12:54Speaker 00

  You can't be Michael Saylor taking shots. You can't be Michael Covel taking shots. Cause now you got the handcuffs on. And this is what I ultimately love about the trend following mindset. Again, listen to the Bill Dreis episode here on my podcast. If you have not, the trend following surfer that did it his own way. And so many trend following traders did it their own way. But that's the part that I love about it. With trend following, it's you. You sit down with your rules and these great markets out there that I hope can stay as great markets. I hope the evil doesn't cause too many problems, doesn't fuck up our markets in the future. But with trend following, you're the guy.

• 13:39Speaker 00

  You're the boss. I'm not saying it's easy, but is the other way easy? Is the other way of being co-opted in your twenties to toe the line? To say yes, sir, to an asshole, to never have an opinion? To always do what you're supposed to do by your overlord? Is that easy? That's my point today. Step back, look at the big picture. We don't have life extension yet. Maybe we will get it soon, but we don't have it yet. So you have limited time and it's a competitive world out there. How do you want to navigate that competitive world? To find your targets of opportunity? To keep your sanity? To keep your wits about you?

• 14:24Speaker 00

  To keep your integrity? To be lucky enough? That when the next scammer comes along? They can say they could not co-opt you because you're on the spectrum. Maybe that's what we all want, right? We all want to be that person. When the report comes out and the news comes out? Well, we couldn't co-opt him. We couldn't turn him. He didn't give a shit. He was just focused on his thing. He didn't care that we threw girls and money at him. He was focused on his thing. What a great place to be. It's where I've tried to be for a very long time. I will continue to be in that place. But I get it. Lots of people, they go down different paths. Big picture though, no matter what?

• 15:10Speaker 00

  Trend following is the way that you can navigate. And ultimately, I think for the big lesson that people want to know, when you look at a chart like MicroStrategy, now Strategy, over almost 30 years, there was no other way to trade that chart than trend following. And when I say trade that chart, don't come at me. I mean, looking historically at the price action represented in that chart, there was only one way you could do it. Now, you were not trading a chart with candles, or flags, or pennants, or some kind of pattern bullshit. You weren't doing that. But the price action of the chart, that's what you're trading.

• 15:53Speaker 00

  The chart is just a representation of the price action historically. It doesn't predict a damn thing for the future. I hope I've given you some perspective today that you might not have thought about. Because when it comes down to it, it's what we all want is some peace, we want some perspective on life, we want to be outside of evil. And doing your own thing and following the price action, that might be the best way that you can get there. See you again next week.

• 16:28Speaker 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.