Ep. 1394: Michael Melissinos Interview with Michael Covel on Trend Following Radio

My guest today is Michael Melissinos. He is the founder of Melissinos Trading and a trend following trader influenced by legendary traders Ed Seykota and Jerry Parker. A former college baseball player and Bear Stearns employee, he is known for his disciplined, rules-based approach to trading. The topic is Trend Following. In this episode of Trend Following Radio we discuss: AI automation, productivity, creativity and authenticity Trend following vs market prediction Lessons from Bear Stearns and financial market psychology Discipline, process, and long-term trading success 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 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

  My guest today is Michael Melissinos. Melissinos Trading. This is Michael's second appearance on my podcast. And it's been some time, I think, close to 10 years. Michael is the consummate, let's go make it happen. That kind of a guy. Former college baseball player turned trend following trader. He's the kind of trend following trader I really like because he goes to the best and gets the mentorship. Ed Sikota, Jerry Parker, to name a few. Without any further delay, let's jump right into a trend following conversation with Michael Melissinos.

• 0:51Speaker 00

  Where are you in terms of your AI usage? And I'm not talking about trading. I'm just talking about in general, where are you in terms of your AI usage, your understanding? What's going on?

• 1:02Speaker 01

  I am in utter shock using this thing every day now. So I've crossed through Rubicon and I have gone into Claude cowork and allowing it access to my computer, allowing it access to my Gmail. I'm using it every day. I've already done a lot of the work with setting it up where it's running automated for me.

• 1:23Speaker 00

  Are you more kind of in the coding automated tasks mindset? Or are you deploying it for any kind of creativity in anything yet?

• 1:32Speaker 01

  More so in the automation right now because those were, at least for me, I've been in toddler town for a few years now. So there's just always something to do. The do lists just never end in this phase. So I guess, I don't know if this is like with kids forever. I guess it is. So I wanted to get the brain sucking, bandwidth sucking tasks out of my brain super fast. And I wanted to handle those expenses and just organizing performance data for the performance reports, end of the month and attribution and blah, blah, blah, blah. All that stuff can be done. I just don't want to do it anymore. It's just very time consuming. So I've been handling that stuff first.

• 2:16Speaker 01

  Creativity, I don't believe in outsourcing my voice to AI. Hey, write this for me. Here's what I want to say. And that goes to all my investors as far as talking about this topic or that or whatever. I still like to do it. I still want to do it. I haven't gotten to the point where I'm comfortable with Claude writing for me. I don't know. I still just like to do it myself.

• 2:40Speaker 00

  I've got some observations about it. I think the most important thing from my perspective so far is if somebody doesn't have a brand and whatever they do, I don't give it, whatever it is, if you don't have a brand, you're out. It's over. So it's just a matter of holding on to some kind of a job because, and I don't know how well that's going to do for white collar especially, but like it seems the brand is the only creative moat. Creativity and brand, if you don't have these, it's over because everything can be done. I'll add this also too, for those people that are thinking as somebody who's authored eight books and I've played around with AI enough to know what its limitations are and it has severe limitations.

• 3:23Speaker 00

  But if someone's out there thinking, I'm going to write a book with AI and it's going to do well. Okay. If you write some novel that a bunch of ladies up in New York City think will do well with the female fiction group, you might sneak one by and they might like it. But there is not a male cohort that's going to buy this typical kind of nonfiction and autobiographical stuff that men gravitate towards. Can't be done with AI. So if you're listening and you want to doubt me, if you want to go spend years trying to do it, you won't be able to fool people with the authenticity.

• 3:57Speaker 01

  I think it's very obvious when you read something down and just the cadence of it, how they use punctuation, it's nah, they all kind of develop a similar sort of long sentence, short sentence, medium sentence, punchy. I don't know where it gets this style from, but it does.

• 4:14Speaker 00

  I think that'll eventually go away. I don't think within some short period of time not putting a prediction on it, but I don't really think we're going to be able to tell the difference between audio, video and text, AI generated by somebody versus me or you doing it. I don't think it's going to be possible. I mean, look, some of my assistants created some AI headshots of me. I showed them the family and they had no freaking idea they were AI. Okay? No idea that they were AI. And close friends, they look at the picture and they're like, "Hey Mike, you're showing me a picture. That's great. What's the point?" I'm like, "It's AI, man."

• 4:47Speaker 01

  It's not me. Have you experimented at all with your voice with doing a monologue and, "Hey AI Mike, go do it."

• 4:54Speaker 00

  I had one of my assistants in Asia. She lives in a different country. I think it's 11 labs. I said, "Create me a short passage with me talking." And she created it and it has some of that kind of up and down inflection. Again, I played it for friends and family and they're like, "Okay, great. Why are you playing an audio clip about trend following to me?" I'm like, "It's not me."

• 5:13Speaker 01

  Your audience is waiting for you to sneak one past them now. Maybe you gotta sneak one in, be like, "Hey," and then do another episode, be like, "You like the last one? Because that one was AI, Mike."

• 5:22Speaker 00

  I wanted to do it for one of my books that I've not done an audio book for and they flagged it. So they must be tagging it in some way.

• 5:29Speaker 01

  Ah, okay.

• 5:30Speaker 00

  Right now, everyone's having the arguments about whether it's AI or not. I don't think we're going to know in the not-too-distant future. But then it's going to come down to, and I talk about this with my assistants all the time, it's going to come down to ideas. And if you've got no ideas, you've got no creativity, you've got no brand, forget it. You've still got to create something to get it.

• 5:48Speaker 01

  I believe that and I believe the internet got us hooked and I think AI is going to get us unhooked.

• 5:54Speaker 00

  I saw that line. I wrote it down. So you brought it up. So I wouldn't have to ask the question. I'll let you explain it.

• 5:59Speaker 01

  Because of all this to do, all this automation, it's so powerful. It never makes a fucking mistake twice. It's insane how good it is at learning. And I've caught some mistakes using it before. Okay, all right. Well, you gotta fix that. Thank you for the spreadsheet, but provide the formulas. You got your formula wrong. Redo it and it doesn't do it wrong again, ever. Bigger picture, I believe that it's helping with a lot of this mundane, a lot of this time suck, these repetitive tasks that are not very valuable. When you get the machine, great, it's over. Now we've got to think up of something else to do. So I've already been noticing it.

• 6:41Speaker 01

  I look, I'm sitting less at the computer, I look less at it. I have to remember to do that thing or two again, it's less and less. And I feel like we mentioned about the brand and just about people. I think people are burned out with this internet stuff.

• 7:01Speaker 00

  People are burned out by a lot of stuff.

• 7:04Speaker 01

  A lot of stuff, yeah, yeah, we can keep going on that. I think people are just tired and they just want to like get back together in person again. And that's what I feel. It's my limited experience, limited bias. You know, I have friends, a lot of people have a lot of young kids now. And they're all kind of toast. They're tired and they just want to hang out. But I feel like in general, those are the vibes I get.

• 7:25Speaker 00

  Staying at AI, speak to the audience out there, someone listening, okay, they're listening to you. You're running your own firm, trading firm, trend following focus. So far, I've not heard from you about how it's going to help your performance. You know, you've not said, oh yeah, I'm Michael, I'm, you know, I'm going to use AI, it's going to help my trend following performance. Why don't you speak to AI and performance increases, which invariably are going to lead people to thinking this is the magical prediction tool. What are you thinking?

• 7:55Speaker 01

  I haven't discovered any magic at all as far as that goes. There's no, maybe someone has, but no. It's only a matter of time before someone has, another person will, and then there goes that edge. People have run some of these predictive models, but they don't work until you incorporate trend rules in it. So it's kind of silly, like, that's important, right?

• 8:15Speaker 00

  There was something I saw on X recently and somebody had created this graphic about that. They took 50 hedge fund strategies and condensed them all down. And I was thinking to myself, to price?

• 8:26Speaker 01

  I think that a lot of people will just have fun with themselves, playing with themselves, figuring out this AI, farting around, coming up with stuff. And they're going to discover a lot of the things that have already been discovered that, oh, you can't predict the markets and going with the trend, riding winners, cutting loss is a pretty good idea. It's just tough to do, right? Yeah, it's still tough to do, even with this fancy new tool. But as far as coming up with some magic, no. I think, at least for me, being a one-person firm, I have some third-party help and things like that. But it helps for me with just another round of checks, the same system code in a couple of different languages and AI can help me with that and speed it up. And all right, model, eh, we're all in agreement? Thank you. Great. Okay.

• 9:10Speaker 00

  That's automation of your ideas.

• 9:12Speaker 01

  Yeah, that's what I'm talking about. But how valuable that is, they don't have to worry about this.

• 9:17Speaker 00

  Let me keep you at strategy for a second. Okay, you and I both, if we're being honest, there is a part of our life that is based on prediction. And the part of that is that trends will continue. But if trends don't continue, then we're all flatlining. And then you just think logically, fundamentally about it. If people understand the futures markets and they understand the stock market, I mean, it's pretty hard to imagine we're going to find a situation where there's a lack of trend. Now, I don't know what's going to be next, no clue, but a lack of trend, that would be the only prediction that I guess you live under. But if we don't have trend, we probably don't have civilization.

• 9:53Speaker 01

  Yes, things are going to supply and demand, like every factor, every variable under the sun moves things. People ain't going away. Oh, I don't think, I think maybe some people want people to go away these days. But all the different variables that are always interacting, it's way too difficult to predict how any of it's going to turn out. But I know, at least I have a high degree of confidence that trends will continue for whatever reason, wherever, in all sorts of directions and different degrees and sizes and magnitudes and cadence. And all these things. And that's the part you leave up to trust that our systems will be able to handle it. An adaptive way of handling will do just fine.

• 10:33Speaker 01

  Optimizing for one particular market or environment or scenario, things like that is where you can. Most people do, they try to, right? Take another step, you get into that greedy, really picky perfectionist ego's part of the cycle. And I think that's where most people will falter, but just kind of comfortable sitting back. Lucy goosey, not too finely tuned.

• 10:57Speaker 00

  Look, from a trend following perspective, the start of the year is just an artificial date, but it's useful for discussion. And I'm not sure I still have this exactly explained right. But I think for most people, even people that say they understand trend following. The idea that you could start a year and not have an understanding or focus of what the markets might be that, you know, you might have a losing year. Let's say you have a winning year. What the markets might be for that winning year that at the start of the year that a trend following trader has absolutely no idea that cocoa might go to the moon.

• 11:36Speaker 00

  That's something that I think is still across the industry. That part of it right there is not necessarily explained well. Maybe there's a zillion in one metaphors, but it's awesomely fascinating.

• 11:48Speaker 01

  I think people just don't like that. They just don't like to believe that.

• 11:52Speaker 00

  They don't like the feeling of it?

• 11:53Speaker 01

  Yeah, I don't think they like it. I think, oh, no, there's something's gonna move and we gotta figure out what it's gonna be. Cause that's what the smart people do.

• 12:01Speaker 00

  We need more control.

• 12:03Speaker 01

  I think that's what they believe.

• 12:04Speaker 00

  Yeah.

• 12:05Speaker 01

  And leaving it up to, yeah, we don't know, but we'll be there, not necessarily at the bottom. But we'll get in, it's a good enough trend, we'll make a little bit money there. And yeah, if things don't work out, yeah, we'll get out. Well, what do you think? That's still a good company. You don't believe in this anymore? What are you talking about? What do you mean to believe in it? No, I don't believe in anything. I don't care. Thank you for your service. You're out. If you start to go against me, thank you for your service. You are out. And that is that. But most people just like, I think, want to believe in that whatever story model they come up with and. It's very comfortable for them because they believe they know what's happening. They know what's going on and they know what tomorrow's gonna be and hey, even though today's not good, we know tomorrow's gonna be fine because we know that, we believe that.

• 12:47Speaker 01

  I worked at Bear Stearns, man, and they believed the same shit. And then one day, out. And that was that. And what do you say? You know, you sit there telling you sit there as a 23 year old and I was, you know, a baseball player. And I'm going in, somehow I got into the door here as a baseball player who hated fucking school. And I'm sitting here with these really smart people. And you, oh, I'm learning trend while working inside the castle walls, castle's crumbling. So you have a lot of learning, but a lot of unlearning as well. And I'm seeing, oh, you guys just like to believe just like everyone else.

• 13:25Speaker 01

  It's not comfortable for you to accept that this is going down and we need to maybe change our behavior here. No one did that. No one, no, no one even talked like that either. And it was funny.

• 13:39Speaker 00

  It's easy to kind of draw parallels between things. And I knew even in the mid 90s into the late 90s, you're like, okay, this is a crazy ass bubble, but I don't know when it's gonna end. I have no idea when it's gonna end. But I also know that historically, things like this do end. And I think that's one of the interesting things about being in the trend following space. Is it, yeah, you can look at things historically and say, hey, this is what has happened when quote P ratios or Schiller or whatever gets to a certain level. But that's not part of trend following. That's interesting economic observations, but it's not part of when you buy and when you sell and how much you bet.

• 14:20Speaker 01

  It never answers, right? It's all the story. It's all trying to guess the future. It's just so cliche. After a while, you spend so much time in trend following, just sitting back, observing with no real opinion. You could have an opinion, but you're never gonna act on it, act on what the system says, not what your opinion.

• 14:39Speaker 00

  You're not acting on your inner analyst, as you use the phrase.

• 14:42Speaker 01

  You just sit back and watch. So you get to sit back and watch people. Too and then run around. Oh, now you see him running around trying to explain everything. I have not watched CNBC, I don't think, since maybe two thousand nine. But I remember during that time, too, like you got fifty screens on the trading floor. Everyone's just trying to explain everything, running around with their hair on fire. And it's just, just look around. Okay. You ain't at a party with a lot of drunk people. Just watch them. What do they like? Their real nature comes out. All right. They don't like to be rejected. All right. They don't like when they go up to the girl, start talking and she's like, gives an answer like, oh, yeah, people don't like that. And then they really get amped up and then they're like, oh, he's talking to her and oh, you know, then the embarrassment and then the confidence swings.

• 15:27Speaker 01

  You just get to watch. That's something I've always done.

• 15:30Speaker 00

  I don't know what year it was. I'm going to guess between two thousand eleven, I think, I can't recall. And CNBC invited me up. I didn't even really know for what reason and I showed up. And it was the woman that had produced Kramer's show. Her name was Susan Krakauer. She sat in a desk in front of me. Behind her was a huge poster of Kramer. On either side of her were two twenty-eight-year-old hard-charging female executives. So it was like a triangulation type thing. And they're like telling me to program an hour at CNBC and I think in my smart ass way, I looked at the poster, I'm like, it's not going to be that dude. You know, I can't program that. To see behind the scenes. I mean, now it seems silly and maybe people are well aware of it, probably not, because when you see it in person

• 16:13Speaker 00

  and you see all these people just lined up at their computers and they walk over and they walk to a soundstage, they put their gear on and they start broadcasting. And it just gives that sense of how fake fucking everything is. And when you see it up close, you're just like, like you, you saw it behind the scenes at Bear Stearns. Things that are fake and it affects you for the rest of your life.

• 16:32Speaker 01

  It must have been around probably post JP Morgan buying Bear Stearns. And it was around that time where people there didn't really know what their next move was going to be. They're getting laid off, people that are certain that they were, but lower level like me, I was twenty-three, twenty-four. I don't know. I didn't really have those thoughts. And I remember like talking to people as it was kind of like last day of. Schools feel like, what's everyone supposed to be doing now? As we go over to the new school, when they come in and integrate with us, what are we supposed to be doing? I remember just, again, being immersed, following a bunch of the trend traders at the time. Jerry and Dunn and David Drews and Salem and all those guys. And I was starting talking to people around the office like, you know about this?

• 17:17Speaker 01

  You know about this stuff? A- anything? And they're like, nah, nah. And it was, this was after Bear went down and they still didn't care. Like, now what do I say? I'm like, I didn't have the sales skills to be like, no, no, no. All right, I'm gonna figure this out, how to get this through to your head. I was just like, okay, I don't understand why you wouldn't want to know. Because aren't we supposed to, you know, this is the whole point, like, try to make money, try to win, try to survive? What am I not getting? So many light bulbs around that time, unlearning, learning new things. And then it was, all right, this ain't happening to me. I'm out of here. Cause I know what's gonna happen again, it's gonna happen again. It's too uncomfortable to change.

• 17:56Speaker 00

  You bring this up, so I've got a family question to ask you. If he's listening, and he might, I don't want to drop his name or his school. I'll drop where he interned, but top 20 school, 21 years old. Got an internship up in the city, I guess, earlier this year, I think? And was up at Wells Fargo. I don't know, at 21 years of age, if he's read any of my stuff or knows anything about the characters of my stuff. He knows about, of course, he knows about me, very small family. So anyways, I start hearing these stories from the family and it's, oh, yeah, this really interesting experience. And he met all these big players and blah, blah, blah, blah, blah. And I'm like, thinking to myself, no, he didn't. A bunch of salespeople or whatever, he didn't, he wasn't exposed to anything that was worth a shit.

• 18:41Speaker 00

  And you can't say anything because people see the buildings, they see the freaking money. And they're there and they think they're one step closer to getting a job. And some distant family member is like, well, you might want to investigate the total picture here. You might not just want to believe the hype of some dude in some suit who's 27 years old. But you know, you can't really say anything. Unless they were lucky enough like you to be in the experience where you saw that whole facade just go like that.

• 19:14Speaker 01

  A lot of luck there as well, yes. Now it's bull market, you know, macho feelings. Everyone's feeling good, man.

• 19:22Speaker 00

  But that's a good term, though. Macho feelings is kind of like a contradiction, right? But it's kind of true. It's macho feelings is kind of bullshit, but it's kind of true. That's what's going on.

• 19:32Speaker 01

  I see, you know, I live in downtown, check back in New York City. A lot of fancy people here.

• 19:37Speaker 00

  For a simple man like me who's somewhere in Asia at a remote location, hidden away, protected, what is a fancy person? I really don't even know what a fancy person is. You might not want to define this. Are you going to get in trouble if you define what a fancy person is?

• 19:51Speaker 01

  Ivy league, smart person that is out of the gate, making a ton of money, and you walked into a very, very good market as well. You could be smart and you can have the skills, but again, if you don't have the market with you, forget it.

• 20:06Speaker 00

  I'm not really sure I'm buying your definition of smart there. I think in the deep recesses of your mind, you're saying the politically correct diplomatic terminology, but I'm not sure I buy it.

• 20:18Speaker 01

  Ability to succeed at school, in the school environment, that's kind of what maybe what I mean. They have good degrees and they get good test scores and they're good at that stuff. I don't know.

• 20:29Speaker 00

  The fancy people like to talk about that stuff. If you're talking like that, they might not invite you. When they invite you, do you have to wear another hat and talk like one of the fancy people? Or can you be normal, Michael?

• 20:40Speaker 01

  No, I can be normal. I don't care. I'll make a scene if you want. Let's get into it. Let's talk for real. I'm not going to play around just because we're among the kids. I'm not going to sidestep truth and not say what I have to say. No. People are like, oh, yeah, you're edgy. Like, yeah, good. Because I don't care. I'm not going to get fired. I don't have to worry about that stuff. Let's get to what you really feel about this. Not just, let's have just pass the time at the park. No, no, I'm not going to do that. That's not fun to me. Don't be confused because I, you know, wear my Deftones shirt or Rage Against the Machine or something that I'm always looking Fight and be punk rock or something, but I don't know, I just like to have more authentic

• 21:20Speaker 01

  communication and conversations with people. I think a lot of people just like to talk and like to just pat each other on the back. Yeah, everything's great. And there's a lot of private equity, people in private equity, as you could might imagine around here at this time. And I just like, yeah, I don't know. I've got out this, I'm always worried. Not that I'm talking negatively, but I'm just always worried. You gotta be careful. And people like nah, everything's, you know, uh, business is good, these businesses are good, blah, blah, blah, blah, blah. Like, okay, all right, then you're good then. You're golden. Don't have to worry about anything. No stop loss, no nothing. Don't have to worry about it. Like, we'll see how it works out.

• 21:59Speaker 00

  That brings up another issue. I mean, in your situation, you're a man who has a firm, a trading firm. And as you described, I might want to ask about this term, highly committed investors. I like that phrase, highly committed. But you hang your shingle out and you say, hey, I'm going to do this. You're kind of on the line. And a lot of people don't realize, and perhaps my family member did not realize this, that a lot of people at these quote, big shops, they're just under some label, some big corporate label. It doesn't really matter if they fuck up. I mean, they'll get fired or whatever, but it's other people's money. It's OPM. I mean, it's like, they're like, ah, whatever, you know, like with you, here's your client money and here's you. It's pretty close, right? At a small shop.

• 22:40Speaker 01

  It's integrated. It's mixed together.

• 22:41Speaker 00

  If you're somebody that shows up to be an intern or first year at some Goldman Sachs, Wells Fargo, whatever. I mean, you're here and the other people's money is way over here. It's just you can't connect it to the fireman in Iowa, you know? It doesn't work that way. It's a terribly unfortunate part of this world where so many people that don't really have a good feel for what's going on in the markets or a strategy have just got their money in the hands of a very relatively small number of people. I mean, this is why the Black Rocks of the world are so damn big. I mean, it's just all retirement and pension assets and whatnot. And so it's a lot of people just trusting a very small number of people. It's a messy, weird system to me.

• 23:24Speaker 01

  It can be risky. I think I can't speak to all the fragilities of the system and things, but I do believe that when you start out doing anything and you have to actually go and talk and look someone in the eye, like it's your nephew or someone in your family who just, you know, he doesn't interface with any one of the customers. What do we do here? We're servicing our investors' money in this way and, you know, we have respect, you know, we've developed respect, a trust and rapport and all those things. We're a good fit and hey, they're in because they're on board with what we do here. This is why we do it. If it's the recent performance, that's not anything. He's hot, she's hot. Well, one day,

• 24:06Speaker 01

  you know, the looks are gonna go. And then what? Is that it? It can't just be that level, surface level stuff. There's gotta be a deeper connection here where you develop a teamwork aspect of your business and, you know, you have respect and you have trust and you're like, you do your job, I do mine. And that's that. And I feel like, yeah, when you start out, you walk into a big successful, you're so separated from the guy, the people who started the business where it took 20 years to get going or something. And then now it's off to the races. And now it just seems like they don't even know what the origin story of Wells Fargo is. So they're kind of disconnected. They're just in the money-making train, runaway train, you know, I'm here to improve my career. And okay, that's all good. But I think if you lose

• 24:51Speaker 01

  sight of the values that were instilled in the beginning from one person or two people, that small team that started it out, that could be risky because when it gets tough, like what do you do here? And that's where you can stick to it, stick to the system when you get kicked in the mouth. And yeah, well, we're in a jam, but so what? I don't care if we missed a quarterly report. We're not gonna fucking lie about anything. We're not gonna do anything to ensure our own survival over above those values, above that moral code. And I feel like, yeah, you could lose that when you're young, walking into a big, successful place, or you get off to a great start and you make a ton of money and people think it's, oh, I did that. I did that. Oh, yeah. You did that? Yeah. Again, you're disconnected from all the other machinations here.

• 25:35Speaker 00

  You bring up another interesting issue. Back in the day, when I first met Bill Don, it was so fascinating to try to go down his path and understand him and how he started. Just one of the great entrepreneurs in the history of America, frankly, even though he's not as big as someone like Ken Griffith or whatever, but still just a fascinating story. And I went and found the two-story split level home he was living at in the 1970s, 10 minutes from my house in Virginia, just to see. Because it was the same house, it was the same house he was living in the 70s, and that was where he started Dunk Capital.

• 26:07Speaker 01

  Yeah, it's amazing. Just incredible.

• 26:09Speaker 00

  And you see that kind of stuff, and even you brought up Jerry Parker too. It's seeing Jerry's office for the first time, I just sat in the parking lot and I was like, "Okay, I don't understand." Because I had just been at Solomon Brothers' office for an interview. And literally, I'm in Jerry Parker's office, or outside his office, I didn't meet him for another 18 months, but seeing his office, and there's a cornfield across the street, and he's managing over a billion dollars. This is in the mid 90s. Your brain just starts collapsing because you're like, "Okay, whatever they've talked about how the world exists, all those buildings in New York City, and even though you happen to be in New York City, you could be anywhere. You can be in Canadian, Texas if you wanted to be. You choose to be there. Respect."

• 26:51Speaker 00

  It is just fascinating, once the distance and the pretense of trend following goes away, you're left with the man that's doing it, you're left with the strategy. Pretty damn cool, even though I'm not a fund manager, it's pretty damn cool.

• 27:04Speaker 01

  You played baseball forever. You see at the lower levels, the kid with the fancy gear, and he stinks. He's got all the gear, he's got the top bat, he's got the brand-new glove, the Wilson, the Rawlings, whatever. 82000, it's a $200. You're eight years old, you don't need a $200 glove. And then you're like, "All right, yeah, well, that doesn't matter." And then you can go back 100 years, and like, those guys were playing with, whatever they were playing with, they barely had equipment, and they're swinging 40-ounce bats.

• 27:33Speaker 00

  Yeah, but those balls weren't going 100 miles an hour back then, though.

• 27:37Speaker 01

  Sure, but it's still hard to hit the ball out, I think, no matter what. Not 100 miles an hour, but those bats, I mean, there are some good YouTubes that they test these bats out over time.

• 27:46Speaker 00

  I know the guy you're talking about.

• 27:47Speaker 01

  Yeah, he just takes BP, just destroys the ball.

• 27:49Speaker 00

  Yeah, he was like Honus Wagner's bat and shit like that, Babe Ruth. I'll share one with you. So I've got a buddy of mine who I grew up with. He is the high school coach of Madison High School in Vienna, Virginia. He's won like four state titles in the last 25 years. Several of his guys have gone pro, but one of his guys, they just won the last state title three years ago. He is now the starting first baseman for the Giants. A guy named Bryce Eldridge. It's been a rocket through the minors. He was a first round pick, like 15th pick a couple of years ago, three years ago, four years ago. Anyways, I was not in the States at the time, but I saw a clip and he was a sophomore in high school and the kid's six foot seven. He's a left-handed hitter. He's a sophomore in high school and the way he swung the bat and I was just like, and you know, the ball went 430 feet or something crazy over the right field wall.

• 28:35Speaker 00

  And I'm just like, okay, I remember seeing Eric Metcalf play football in high school and I, okay, I don't know what a professional football player is. Eric Metcalf will play professionally when I saw him for the first time, junior in high school. So this kid for my friend's high school, as a sophomore, he cranks this home run and all I see is a video clip and I'm like, three years later, first round pick. You know this, you've seen it too. You could see some of these guys are just like, oh my, it's going.

• 28:59Speaker 01

  Licks the bat probably. Just watching Judge, I've been to a few Yankee games and he's just so big, can't even believe it. I've played baseball 20 years and I've never seen anyone that big ever play. And mostly those guys, it was football or basketball. And then the bat looks like a twig in his hand, one of my son's bats, one of his plastic bats. I think the bat's big enough for this guy. Cause have you ever swung like a little league bat where it's like, you can't swing it very well because it's too small, right? Your arms are too big for the bat. It's weird. You need some like weight at the end of it to help you. Yeah, I played Zimmerman. He went to UVA, played against him early in my college career.

• 29:42Speaker 00

  Was it just obvious when you saw a guy like that?

• 29:45Speaker 01

  It wasn't obvious with him, but he had like a 15-year career. Yeah, he was good, really good. It was obvious when we played UNC and Daniel Bard was the first day and then Andrew Miller was second day. You know Bard and Miller?

• 30:03Speaker 00

  I remember the name Miller. Yeah, I don't remember Bard.

• 30:05Speaker 01

  He became like a lefty bullpen guy. He played for the Tigers. I think he pitched for the Yankees too, and maybe a couple other teams. But he was really good. He was 6'6", lefty, throwing 98. And then Bard was the same. He was 6'4", throwing 100. And it was literally mid-March, first weekend of the year, UNC night games. And these guys were so disrespectful. They would be second and third, one out, behind in the count, and they'd still throw breaking balls. They wouldn't give a shit. They'd play, "Yeah, I'll put you on first base because I'll strike out the next guy if I need to." They're working on stuff during the game.

• 30:43Speaker 00

  I'll give you one more crazy baseball trivia. Maybe you heard the name if you're still following stuff. But so when I was a senior in high school, they had a kid show up, play centerfield. He was a freshman. He wasn't very big, maybe 5'9" or something. He had no arm, but he was clearly just the best guy we could put out there for centerfield. And his brother had played at Wake Forest, and his brother had played a year or two in the minors. And so anyways, this guy, he ended up starting four years, whatever. His son just got called up by the Mets.

• 31:11Speaker 01

  And who was that guy? Is that the guy? Is that the question?

• 31:13Speaker 00

  Nick Morabito.

• 31:15Speaker 01

  Nick Morabito?

• 31:16Speaker 00

  Yeah, he just got called up by the Mets. He was in AAA. He only got up for like 11 at bats. They sent him back to AAA.

• 31:22Speaker 01

  It's hard to get up there. It's hard to hit a baseball against these guys.

• 31:25Speaker 00

  Do you still go to the cage at all?

• 31:27Speaker 01

  No, but I will be going with my son soon because he'll start Little League next year. He could play right now because he can play. I haven't had to teach him. I haven't had to motivate him. "Hey, let's go play." He just, he'd grab me. "Dada, come on. Dada, let's go. Dad, I want to play rough." And he wants to do football, he wants to do basketball, baseball, and he could hit. He only lets me have a catch with him with a hard ball now because he's moved on. He's moved on. I'm like, "Okay." Well, he still does like the clap catch sometimes. Like, "You can't do that because you're going to miss one. It's going to hit you right in the teeth." But we play every day. He's running me, running me down.

• 32:02Speaker 00

  I'm jealous because I had a father who was a dentist, and he would not let me play baseball till age 10.

• 32:08Speaker 01

  What? Oh, because of the teeth? He was worried about the teeth?

• 32:11Speaker 00

  He worried about the teeth. That's how I became a catcher.

• 32:13Speaker 01

  Wow. See? Wow.

• 32:14Speaker 00

  But here's the trade-off. I'm writing actually a fiction novel that includes this little tidbit. But the trade-off is, at my age now, I can do the full splits in the Asian squat still because my father was afraid my teeth were going to get knocked out at age 10.

• 32:27Speaker 01

  So you can do a split, huh? Like, all the way down? Wait, what's the Asian squat?

• 32:31Speaker 00

  Just the same thing a catcher does.

• 32:33Speaker 01

  Just ass to the floor?

• 32:34Speaker 00

  When people in Asia sit, that's how they sit.

• 32:36Speaker 01

  Yeah, okay. I think that's the number one reason why people go into nursing home, old age assistance homes, because they can't get on and off the toilet.

• 32:47Speaker 00

  Hey, I can still do a one-meter box jump, so there you go.

• 32:50Speaker 01

  That's pretty good, too.

• 32:51Speaker 00

  I'm fighting father time.

• 32:53Speaker 01

  You get many hills out there? The hill sprint's pretty good. Sometimes flak can be risky.

• 32:57Speaker 00

  It's harder in this city in particular.

• 33:00Speaker 01

  You could push some sleds, too.

• 33:01Speaker 00

  I do sled and tracks, stuff like that. Before we talk too much baseball and stuff, I want to bring it back to a couple big-picture trend-type things. And one that I saw you post was just that, the infamous silver chart of the last couple of years, when it was reaching its zenith. Explain to the audience in kind of like elevator terms, someone doesn't know what you're talking about, and it's like they see that chart that goes to the moon, and you're trying to explain how you, you know, you didn't pick the bottom, you didn't pick the top, you got a piece of it, but you had no idea it was going to happen. Look, I know in the trend-following world, people probably say, "Oh, everyone understands

• 33:41Speaker 00

  this," and they don't. They don't. They don't understand how you could have participated in that without some foreknowledge or deep silver understanding or something.

• 33:54Speaker 01

  It's just always tracking the market, one. You're never turning your back on it because you don't know. Turning your back means that, "I know I don't need this. I know I don't need to trade it. I don't even need to watch it because I know what's going to happen, and what's going to happen is nothing. So why bother? No, I don't know that. I want to watch it because I'm not sure what's going to happen here." And then, the very simple technique to identify when it's going up, according to my definition of what a trend is. Okay, I got my little definition. I could show you that on a chart. That's easy.

• 34:29Speaker 00

  Is it a trend at first, or is it just a reason to get in? Because you don't know how much it's going to trend at all.

• 34:36Speaker 01

  Semantics, okay, all right. Up trend, take a long position when this condition is met. That's it. I just saw Ed in October and he would yell at me and like, how to speak, you're not speaking correctly. You know, your sentence is wrong and on the fly, it's hard. When you write it down, I have time to edit it, it's easier. But yes, when the condition is met, that's when the long position is taken. And same for a flat or short. So when the condition was met in silver, that it is going up. Okay, we take the position and see, let's see. And if it doesn't work out, we're not going to get killed here, but okay, let's see. And then, oh, this was lovely. Thank you. This is a wonderful trend. Guess what?

• 35:18Speaker 01

  The condition is still met, so we're sticking with that. And yes, the chart, what does that do? Does that bring up feelings that like, oh, I've seen this before and this can't last? Well, you gotta be careful about that because you don't want to limit your opportunities to your own imagination and your own common sense, which a lot of people like to use. Well, you know, this is going to end. Yeah, but I don't know when, dude. That's the whole thing. You understand? I don't know when. And when you start to think you know what you're seeing, you tend to see it more often. And then you start to, oh, I bent my rules in silver. I got out a little earlier, I sensed something and then I start doing that with other things.

• 36:00Speaker 01

  And I was in early part of that new AI stock move and I cut it. Like another good one is SanDisk right now. It's insane. Like forty times over the last year, over 4,000% over the last one year. A thousand percent in the last six months. So a lot of opportunities for you to get out of that early because with the profit and you're satisfied. Yeah, I made money on it. Yeah, how much you made? And why aren't you still in it? Maybe I just take it for granted now.

• 36:28Speaker 00

  You mean the thought, you take for granted the thought process and not having to explain it necessarily?

• 36:33Speaker 01

  Yeah, what's so hard is just the jam rule to get in and out of things and you just have to believe. I think that's where it gets uncomfortable talking and people, if they do push back, they push back on that. They just want to believe that the way to succeed is to know what's going to happen. And that is just so hard. Most people are just not there. They're not there. I don't know if I'm the guy to help them because I just like don't have it. I don't know. It's just so hard for me to get through.

• 37:01Speaker 00

  I think for me, the only way it made sense was you have all the philosophy over here. You have the rules over here. But then it was like, okay, here is Dunn Capital's track record. Here is Jerry Parker's track record. Here's all these track records. Look, I'm just a regular guy, but I'm a regular guy that believes when you see the truth. So if you see, okay, here's a set of rules, here's a philosophy, and here's some track records from people that came well before me that have done really well, and their track records aren't necessarily exactly the same, but they they're correlated. They seem to smile together. If you take this mentality, it's like, I just think so few people, relatively speaking, are exposed to that kind of idea of approaching it that

• 37:45Speaker 00

  way. It's like a detective, almost investigative journalism, digging in. To me, it doesn't feel that novel, but I guess in many ways, it has been and is and was novel.

• 37:56Speaker 01

  And still in bull markets, forget it. People are like, I don't need to talk. I'm doing fine, pal. No, you're good then. Okay, see ya. We'll talk again, and you might have a different feeling.

• 38:05Speaker 00

  But that's not a prediction that you're making. That's just you being observant to like, hey, things change. The fall of 2002, the NASDAQ was down 77%. I don't think people can register that today.

• 38:18Speaker 01

  I wish there was more documentaries about that time, not necessarily with Enron or something, but people on the ground, like regular investors, how they're kind of getting the feel of the frenzy of the day. I think there's one I watched, but it's kind of like an at-home video feel. It's kind of grainy. It's not great production, but the company that started up and then they wiped. And I think it's a few episodes on. It's on YouTube somewhere. I would have to find it. I don't remember the name, but it was okay. But I want more of that. I want more of the capturing of the crowd psychology. That is awesome.

• 38:53Speaker 00

  The big short thing is interesting in that what people don't talk about how we got to the big short. Because the big short was a direct result of, okay, you get this dot com crash, you get the NASDAQ down so much. They jacked rates down so low to force any kind of bubble to build out of the prior bubble. I don't think the big short connected that particular movie and that story. They didn't connect it well to how it even got to where that big, you know? And that was a huge part of it.

• 39:23Speaker 01

  I think they will at some point. Things will start to happen. I don't know. Maybe this inflation kind of gets it where it hits more people more often and they're just like, what? This fucking Cheerios costs fucking $10. What the fuck's going on here? What is going on here? And then they're all, maybe they'll start. When you have someone to blame, like the rich Wall Street guys and it's, okay, yeah, well, it was their fault. We know what happened to you. It was there. So let's make fun of them in the movie. Let's get them. There's a few greedy people and okay. But now it seems like a cancer, like a spreading and it's just not going away. And this isn't some isolated incident where I think a lot of people believe, oh, it's some isolated incident.

• 40:03Speaker 01

  We're unraveled with the default swaps and things like that and over leverage and yada, yada, yada.

• 40:09Speaker 00

  But remind people, you are laying out a scenario of events that have happened, things that could happen. And that's one side of yourself here, but the other side of yourself is the system that doesn't give a shit about what you're saying over here.

• 40:25Speaker 01

  Correct. I could talk like a lunatic and get animated and get excited and tell jokes and say silly things and be like, well, I have my orders. I have my standing orders. I do what it tells me to do. I don't fight with it. I'm not like, ah, I don't think I should be buying this now. Or no, I'm totally gone. It's so easy. I had more of that in the early days. When you actually have to do it, you get out of your simulation, you get out of following Jerry and Dunn and John Henry and these guys. Okay, now I have to do it. But I remember early days like, oh, oh, this is what makes it tough. Ah, okay. This is what makes it tough.

• 41:01Speaker 00

  How long is your track record now?

• 41:03Speaker 01

  Fifteen and a half years. My point was gonna say was, and I still see it to this day. You go to the gym four days a week. If it's cold and it's rainy or it's something out, how many people are there? A lot less because they just don't wanna go. All right, they don't wanna feel that cold and come home wet and whatever. It's not comfortable. All these things really helped me from sports, really helped me. And then bear and then seeing the financial crisis and then starting trend following. And oh, yeah, this is what's tough about this. The concept, okay, everyone's smart to get that.

• 41:42Speaker 01

  But everyone's smart enough to get workout four days a week, eat healthy, sleep, no drugs, alcohol, blah, blah, blah. That's all. Oh, yeah, I know that. Yeah, why do it? Do it. That's where the work is. That's where I've had to call on the big guns, had to call on the trading tribe. I had to call Ed and things like that to have that technology to help me out when things get tough. That's to me where I think the work is like the personal, the growth. And when you really get good and can stay good and you're self sufficient. You're not like, yeah, well, people are just doing their system and it's lingering out there to when they break it. That does happen. I think that does happen. They go good for a while and they might get the wind at their back for a while. And they think they have a good product and a good strategy.

• 42:27Speaker 01

  And then the winds change and then they're like, oh, yeah. And I was really just aligned with the performance. I could do it when it's going good, but when it's not good, I can't do it. I wanna change something or wanna flip over here and I'm gonna turn on the TV and see what's going on. Watch these channels and try to find new ideas and talk to AI about what new strategy I could do here. Man, this is why it's difficult. It's harder to sit there and do it, especially when you're getting your ass kicked. And that was last year. We talked last year. I would have been a different mood. I would have had holes all over the walls and punching everything.

• 43:00Speaker 00

  I'll get the write ups that come from Mulvaney Capital. And every now and again, depending on whatever situation, I'll just send a simple. Like the other day, after his first four months of this year, I just replied to Paul, I was like, good job. I think that's all I said.

• 43:14Speaker 01

  Anything?

• 43:16Speaker 00

  Thanks, Mike.

• 43:17Speaker 01

  Thanks.

• 43:18Speaker 00

  That was the entire conversation. But yeah, there's a lot of really interesting people. And so, by the way, I'm working on a sixth edition of Trend Following. So you'll have to make sure I get something from you to get in there. I'm making an even bigger Bible.

• 43:30Speaker 01

  Yeah, I was happy I stuck in one line into the last one.

• 43:33Speaker 00

  You'll have to send along something that I'll get in there. It's interesting. Michael, where can we send people? People, you know, they got a feel for you in this conversation and they hear 15 plus years on the track record. Where can they go to find you? How can they reach you?

• 43:47Speaker 01

  Oh, I got a tough name, but you can go to melissinosetraing.com. That's my firm's website. It has all my work there. And then LinkedIn as well is another good spot. I'm kind of active, kind of not. I don't know. I don't know what to do with it. Just look up my name, MichaelMelissinos.com. On Twitter too, same thing. I don't really know what to do with it. I feel like the boat is, it's left. It's left the station there. A lot of these social media things, I think it's all dying because everyone just doesn't want to do it anymore. They want to get back outside and talk to people on the phone. And that's more fun anyway. Let's go have a beer and talk.

• 44:21Speaker 00

  I agree. I agree 100%. I forget, let's make sure we at least reconnect every once in a while here. And you're an easy chat.

• 44:26Speaker 01

  Yeah, I'm great. I'm a great guy. I'm very fun.

• 44:28Speaker 00

  Self promoter too. Wow. Amazing.

• 44:30Speaker 01

  I am. Wow. I've always thought myself as not that, but yeah, I just want to win, man. I just want to help people win. I don't want to see what happened to people at Bear that happened to my crew. And that's what made me start. This ain't happening to me. It's not happening to my people. So hopefully I could get the message across to them and then, you know, keep them safe and do it this way instead of that way.

• 44:52Speaker 00

  Melissinos Trading, again, that URL will be in the notes. Michael, I appreciate it.

• 44:57Speaker 01

  It's great talking. Thank you so much.

• 45:05Speaker 00

  I see a time when those awake will understand how to make money in up, down, and surprise markets. Whether new trader or experienced, college student or financial advisor, protecting against a crash or just trying to make a lot of money, TrendFOLLOWing offers everyone an answer in uncertain times. To get started immediately, send me an email, [email protected]. I will send you the right TrendFOLLOWing 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.