26 “The Most Repeatable Method of Trading Ever Invented” with Scot Billington of Covenant Capital – 2of2
Summary: "Trend following is the most repeatable method of trading ever invented." - Scot Billington (Tweet)<br> Welcome back to the second part of our interview with Scot Billington of Covenant Capital Management.<br> <br> In this episode, Scot delves into the practice of trend following and why it is a great model to follow. He also discusses tips for beginning traders and investors, and advice for those who wants to start a firm. Thank you for listening to Part 2 of our conversation with Scot Billington.<br> <br> <br> <br> Subscribe on iTunes, Stitcher Radio or TuneIn<br> In This Episode, You'll Learn:<br> <br> The story of Scot's childhood obsession with mathematically based, but unknown future outcomes.<br> The discipline required to follow a mathematical model.<br> The advantages of trend-following and why the media reports that "Trend Following is Dead" every few years.<br> <br> "Your largest drawdown is always in front of you. But there will always be a winning period bigger than we've seen because it is over a longer period" - Scot Billington (Tweet)<br> <br> Scot's philosophy on position sizing.<br> <br> “I would rather have a small edge with proper position sizing then vice versa” - Scot Billington (Tweet)<br> <br> How every sector in the market is highly correlated.<br> Getting comfortable with taking risks: they exist and it is impossible to avoid them.<br> The Barbell strategy: have very little money at risk, but the money that is at risk is in the most aggressive things that it can be.<br> The biggest mistake that allocators make.<br> <br> "I'm a big believer that the handling of the large moves is sort of all that matters." - Scot Billington (Tweet)<br> <br> How Scot conducts research for Covenant Capital.<br> Why he is based in Nashville and how he overcomes the challenge of asking investors to buy into the long time-frame.<br> Finding your niche as a boutique firm.<br> <br> "As a boutique firm you are going to attract some people and some people will never be attracted to you." - Scot Billington (Tweet)<br> <br> Advice for managers wanting to start firms today.<br> <br> Resources & Links Mentioned in this Episode:<br> <br> Scot mentions how the media often announces the death of trend following. Here’s an article on the subject from Futures Magazine.<br> Learn about the Barbell Trading Strategy.<br> See 10 Fallacies when Selecting CTAs.<br> <br> This episode was sponsored by Saxo Bank:<br> <br> Connect with Covenant Capital Management:<br> Visit the Website: www.CovenantCap.com<br> <br> Call Covenant Capital: +1 (615) 678-6742<br> <br> E-Mail Covenant Capital: info@covenantcap.com<br> <br> Follow Scot Billington on Twitter.<br> "Any new business is like a small tree: it cannot take a tire swing yet” - Scot Billington (Tweet)
