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Interview With Jack Schwager: Masters in Business (Audio) · Masters in Business

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  Speaker 1: Brought to you by B A. S F. We create chemistry.
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  Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
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  Speaker 1: Welcome to the one addition of the Masters in Business
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  Speaker 1: podcast here on Bloomberg Radio. I am so thrilled and
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  Speaker 1: excited to have hit this milestone if you would have
• 0:25
  Speaker 1: told me when we began what really started as a
• 0:29
  Speaker 1: skunk works project on the down low. Quick digression as
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  Speaker 1: to how this podcast came about. Tim O'Brien, who runs
• 0:39
  Speaker 1: Bloomberg View and Bloomberg Gadfly, He's the one who set
• 0:42
  Speaker 1: it up. Uh was recruiting me to, uh come right
• 0:48
  Speaker 1: from Bloomberg and I said, listen, you guys have a website.
• 0:51
  Speaker 1: I have a website. Why do I wanna publish for
• 0:55
  Speaker 1: for you guys instead of on my own site? And
• 0:57
  Speaker 1: he said, well, look at this fantastic playground that we
• 1:01
  Speaker 1: have here at Bloomberg. Look at the technology, the facilities.
• 1:05
  Speaker 1: I have to tell you that was really a very
• 1:07
  Speaker 1: persuasive argument. The Bloomberg Building, if you've never been, is
• 1:12
  Speaker 1: it's mind blowing. It is a purpose built technology and
• 1:17
  Speaker 1: media high rise in the middle of midtown. It's really
• 1:21
  Speaker 1: an amazing, amazing place. And if there's any way you
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  Speaker 1: could find uh, the opportunity to come here professionally, you should.
• 1:28
  Speaker 1: It's pretty awesome. And when Tim was showing me around
• 1:33
  Speaker 1: the facilities, I noticed all these super cool um radio
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  Speaker 1: booths and studios. Now I've been to the Bloomberg Building
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  Speaker 1: numerous times before. I've been on the radio here, I've
• 1:44
  Speaker 1: been on the Bloomberg TV set, I've been here for conferences,
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  Speaker 1: so I'm somewhat familiar with the space. But when you're
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  Speaker 1: looking at it not as just a guest who's blowing
• 1:56
  Speaker 1: in and out in order to do a television show,
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  Speaker 1: but as a facility. The if that someone says, hey,
• 2:01
  Speaker 1: you have access to all all of these really cool toys,
• 2:05
  Speaker 1: you see it from a slightly different perspective. And so
• 2:08
  Speaker 1: when we started chit chatting about what we could actually
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  Speaker 1: do with these facilities, I started to get all sorts
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  Speaker 1: of interesting, interesting ideas, the first of which was I
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  Speaker 1: would love to do a podcast and actually talk to
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  Speaker 1: some of the most intelligent and influential and important people
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  Speaker 1: in the industry in business and finance on Wall Street. Uh.
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  Speaker 1: We kicked a few ideas around. Someone had suggested, how
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  Speaker 1: about a television show I said, no, go get Joe.
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  Speaker 1: Reason thought to do that. I don't want to do TV.
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  Speaker 1: I I don't want to wear a suit and tie
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  Speaker 1: every day, and I want to shave. I don't want
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  Speaker 1: to have to go on a diet. Um. I've dropped
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  Speaker 1: about twenty pounds, but to do TV I would have
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  Speaker 1: to drop another twenty and that would be a lot
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  Speaker 1: of work. So when they said what do you want
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  Speaker 1: to do? My answer was I'm want to sit with
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  Speaker 1: these people and have an adult conversation about important things. Well, podcast,
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  Speaker 1: what do you mean? And the elevator pitch was Mark
• 3:10
  Speaker 1: Marin's WTF meets Charlie Rose. But I went back and
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  Speaker 1: looked at my notes, and my notes said a podcast
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  Speaker 1: version of Jack Schweger's Market Wizards. And that was really
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  Speaker 1: the motivation for this show. And so who better to
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  Speaker 1: do our hundred podcast? Then the man the legend himself,
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  Speaker 1: Jack Schweger. He is the author of numerous market wizards books.
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  Speaker 1: The first one is Market Wizards, the second one is
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  Speaker 1: New Market Wizards, the third one is Hedge Fund Wizards. Uh,
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  Speaker 1: plus a number of of different books on options and
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  Speaker 1: trading and futures. And you know he he has been
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  Speaker 1: a trader his whole career, and and the writing and
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  Speaker 1: editing started as a sort of side project, but obviously
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  Speaker 1: it blew up on its own. Um A quick another
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  Speaker 1: digression about Jack and I. So, I don't know. I'm
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  Speaker 1: a new being in the industry. I'm around for less
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  Speaker 1: than ten years. The first book anybody gives me UM
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  Speaker 1: to read when I'm studying for my series seven a
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  Speaker 1: hundred years ago, uh was Market Wizards, and I just
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  Speaker 1: devoured it. And I wasn't fascinated by the fact that
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  Speaker 1: all these different traders and fund managers in all these
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  Speaker 1: different fields somewhere commodities, somewhere where equities, somewhere, bonds, somewhere,
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  Speaker 1: more complex products, somewhere really simple strategies. There was a
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  Speaker 1: theme that ran through all of these interviews. And so
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  Speaker 1: not only did I devour the first book, but I
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  Speaker 1: reread it every five years. I find it to be
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  Speaker 1: absolutely fascinating. And the second time I read it, I
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  Speaker 1: want to say that was nine or two thousand or
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  Speaker 1: something like that, I decided to do something I almost
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  Speaker 1: never do, which is write a review on Amazon dot
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  Speaker 1: Com for the book, and you'll see, other than whining
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  Speaker 1: about you know, a poorly made product. I almost never
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  Speaker 1: do book reviews. Uh, I got stuff to do. I
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  Speaker 1: would rather read books than write book reviews. So I
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  Speaker 1: happened to be so moved by market Wizards that I
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  Speaker 1: wrote a review of it. This was I don't know
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  Speaker 1: one oh three something like that and posting on Amazon
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  Speaker 1: completely forget about it. Fast forward to episode I don't
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  Speaker 1: know fift something like that, and Jack Schwager is one
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  Speaker 1: of our early guests. He was nice enough to come on,
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  Speaker 1: and he not only reminds me that I wrote a
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  Speaker 1: review of market Wizards for Amazon, but yeah, Amazon does
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  Speaker 1: this sort of crowdsourcing thing where you could thumbs up
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  Speaker 1: or thumbs down a review, And it turned out that
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  Speaker 1: the readers of the Amazon page on market Wizards had
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  Speaker 1: made that at the top review of market Wizards. Go
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  Speaker 1: to Amazon click positive reviews. It's the first one, Jack says,
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  Speaker 1: it's it's been the first one for over a decade.
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  Speaker 1: Who knew. Just one of those funny little ironies. Fifteen
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  Speaker 1: years ago, I wrote a review of a book that
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  Speaker 1: I thought was really really interesting and important, and now
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  Speaker 1: in it turns out that our one guests on Bloomberg
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  Speaker 1: Radio's Masters in Business show and podcast is the same
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  Speaker 1: gentleman Jack Schweger. So with tremendous amount of excitement, I
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  Speaker 1: am thrilled to present our podcast here. He is author
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  Speaker 1: and trader Jack Schweger. This is Masters in Business with
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  Speaker 1: Barry Ridholts on Bloomberg Radio. I have a special guest
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  Speaker 1: today who is should be very well known if you
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  Speaker 1: are an investor or trader and like to read books
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  Speaker 1: about the craft. His name is Jack Schwager, and I
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  Speaker 1: have to tell you the first book I have received
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  Speaker 1: in the industry when I began was Market Wizards. I
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  Speaker 1: make it a point to reread it every five years
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  Speaker 1: or so. There are now three versions. There's Market Wizards,
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  Speaker 1: New Market Wizards, and Hedge Fund Wizards, as well as
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  Speaker 1: an audio book of actually all of them are three
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  Speaker 1: are now Jack Schweger. Welcome to bloom Thank you very
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  Speaker 1: good to be here again. So so I really didn't
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  Speaker 1: give your your background and introduction enough of a play up.
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  Speaker 1: You're you're in addition to being an author, you're a trader.
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  Speaker 1: You've written a number of books on technical trading and
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  Speaker 1: future trading along those lines as well as an entrepreneur.
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  Speaker 1: I cannot under estimate I cannot under emphasize how influential
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  Speaker 1: Market Wizards was. When when did the first book, first
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  Speaker 1: Market Wizars came out, and how many copies has that,
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  Speaker 1: you know, printings? It first of all, has been translated
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  Speaker 1: in so many language I mean weird language, I mean
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  Speaker 1: languages I wouldn't all expect, like Turkish and Croatian and
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  Speaker 1: the Vietnamese and whatever. You know. So, and you have
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  Speaker 1: no idea they sell these books. They make it a
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  Speaker 1: contract and you have no idea what it sells. So
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  Speaker 1: and the China and China is like there's two official
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  Speaker 1: language versions, not to count the bootleg versions. But that's
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  Speaker 1: true of everything. But absolutely, when whenever someone talks about China,
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  Speaker 1: there should be implied in parentheses not to count the
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  Speaker 1: bootlet that's that's that's a given. So in other words,
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  Speaker 1: but I would guess, I would guess between all the
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  Speaker 1: you know, all the books I've written globally, i'd say
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  Speaker 1: probably a couple of million sold. That's huge. And for
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  Speaker 1: those people who may not be familiar with Market Wizards,
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  Speaker 1: the premise of the book is essentially, let's speak to
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  Speaker 1: some some very six sucessful investors and traders and see
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  Speaker 1: how they do and what their secret sources and what's
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  Speaker 1: fascinating In the book, you spoke to people who are
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  Speaker 1: commodities traders, bond traders, equity traders, currency traders, and there
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  Speaker 1: were some really consistent themes. No matter what these people
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  Speaker 1: were doing, whether whether they were long term investors or
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  Speaker 1: or the shortest of short term traders, certain themes came
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  Speaker 1: out in the book over and over again, right, And
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  Speaker 1: and that was what I was trying to do. I
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  Speaker 1: was write, what is the secret source, what separates this
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  Speaker 1: group of extremely successful successful and just off the child
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  Speaker 1: and some of them, I mean just extraordinary and and
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  Speaker 1: and the people I've interviewed included sort of the most
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  Speaker 1: famous traders. We're gonna go into the specifics about some
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  Speaker 1: of them, Okay a few minutes. So so as far
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  Speaker 1: as the the lessons, and there are tons of them.
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  Speaker 1: And I probably in the later books when I did summaries,
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  Speaker 1: I might have had, like, you know, forty points forty points,
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  Speaker 1: and you had all or if you had ad all
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  Speaker 1: the like all the common denominators, I wouldn't be surprised
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  Speaker 1: if it got close to a hundred. So it's kind
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  Speaker 1: of hard to just say which ones, but what the
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  Speaker 1: fact that they were radically different from each other was
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  Speaker 1: maybe one of the most important common denominators, because what
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  Speaker 1: it spoke to is they each found their own way.
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  Speaker 1: I can't tell you how many times people, uh, you know,
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  Speaker 1: we'll ask me or write me, what traders should I follow?
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  Speaker 1: That's right, what trader should I follow? Or who's the
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  Speaker 1: best trader you know? And and you know to me
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  Speaker 1: that that's it has no that question has no answer,
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  Speaker 1: And the question actually makes no sense. It makes no
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  Speaker 1: more sense than somebody calling me and asking me, I've
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  Speaker 1: got to go buy a suit, what side should I get?
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  Speaker 1: And I've never seen the person. I mean, it's as
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  Speaker 1: relevant to question as that. So these people found would
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  Speaker 1: work for them, and it was always different. So let's
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  Speaker 1: talk about a couple of themes though that run through
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  Speaker 1: all the traders. Let's let's start with discipline, probably the
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  Speaker 1: single most important lesson at least that I took. What
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  Speaker 1: was the general take on being a disciplined persson when
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  Speaker 1: I asked? I asked that question to a lot, you know,
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  Speaker 1: some questions I I tried to count the interviews and
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  Speaker 1: conversational format. You know what you're like? You you do right?
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  Speaker 1: So we'll discuss. You are the inspiration, so and you know,
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  Speaker 1: don't start. I would have like questions sort of back up,
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  Speaker 1: you know, but I'd like talk and talk, you know,
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  Speaker 1: and sometimes going at two days of conversation sometimes and
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  Speaker 1: only the end would I like, look, did I miss anything?
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  Speaker 1: And usually nothing, you know, usually picked up everything. So, um,
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  Speaker 1: I got off a tangent to it. I was kind
• 11:32
  Speaker 1: on The original question was on discipline. Discipline, right, So
• 11:36
  Speaker 1: one question I asked, did ask everybody or just about
• 11:40
  Speaker 1: is what what separates you know? What differentiate too? What? What?
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  Speaker 1: Why are you different? And and discipline was the single
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  Speaker 1: most answered, you know, answer to that. That was the
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  Speaker 1: most common answer to that question was discipline. Now, when
• 11:54
  Speaker 1: let's let's dig in a little bit. When they say
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  Speaker 1: their disciplines, are they referring to keeping them most in check?
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  Speaker 1: Are they referring to I have a methodology and I
• 12:03
  Speaker 1: find it follow it no matter what? What did they mean?
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  Speaker 1: And and those two are not separate? Um? Yeah, but
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  Speaker 1: they mean primarily I've got a methronology and I'm not
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  Speaker 1: gonna straight from it. And I know you at your
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  Speaker 1: trader and I'm I'm a trader. And but anybody's trade
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  Speaker 1: and knows this that if you if you've got an
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  Speaker 1: approach that sort of work. And to be clear, no
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  Speaker 1: approach work, no, no approach works any great amount of time.
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  Speaker 1: Everything falls into that affairs just just a question of probabilities.
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  Speaker 1: But if you've got an approach that over time probabilities
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  Speaker 1: are in your favor and you make more money than
• 12:35
  Speaker 1: you lose and you keep control. If you've got that
• 12:38
  Speaker 1: approach and you've got rules or trades that you do, uh,
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  Speaker 1: and you're losing some of them, that's fine because you're
• 12:45
  Speaker 1: gonna lose on a certain percentage. But when you do
• 12:47
  Speaker 1: stuff that is counter to what you're supposed to do,
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  Speaker 1: like well, I got, I got. This is how I
• 12:51
  Speaker 1: get into a trade. And then you look at the market. Gee,
• 12:53
  Speaker 1: you know, let's take it. We got Brexit going on here,
• 12:55
  Speaker 1: you know, and you've got this market crashing. Boy, this
• 12:57
  Speaker 1: must be really over sold. It's not really part of
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  Speaker 1: my trade. But I'll take a flyer the pounds down
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  Speaker 1: eighteen cents, you know, that's probably good for a balance.
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  Speaker 1: I'll buy it. Those type of trade. So that's breaking discipline.
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  Speaker 1: That's not part of your plan, that's not part of
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  Speaker 1: your approach. Unless your plan is unless randomly file the
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  Speaker 1: headline and the news and chase everything, well, those people
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  Speaker 1: don't stay in business that well, or that this is
• 13:18
  Speaker 1: this is actually going. My my example wasn't just the
• 13:20
  Speaker 1: opposite sort of like you're gonna you're gonna try to
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  Speaker 1: pick the bottom and you know you're gonna try to
• 13:24
  Speaker 1: catch the falling knife, so to speak. Um and and
• 13:27
  Speaker 1: some people could that could be, that could be in
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  Speaker 1: a strategy in fact, catching a following knife. I've been
• 13:32
  Speaker 1: through traders who do trade like that. But you have
• 13:34
  Speaker 1: to have um. But then you know what you're getting out.
• 13:37
  Speaker 1: You know you you think it's gonna hold here and
• 13:39
  Speaker 1: if it doesn't, your out. So that's but just to
• 13:41
  Speaker 1: blindly take a trade that's not part of your your approach,
• 13:44
  Speaker 1: that's where that would be breaking discipline or more more important,
• 13:47
  Speaker 1: even more important is is not getting in and we
• 13:50
  Speaker 1: we and I know I'm sort of preaching to the
• 13:52
  Speaker 1: choir when I talk to you, but you know all
• 13:53
  Speaker 1: of this stuff, and this is I know you've got
• 13:55
  Speaker 1: the exact same view. Getting in is the least important part.
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  Speaker 1: Getting out. That's what you gotta worry about. That's what
• 14:00
  Speaker 1: people don't worry about I used to jokingly sell there's
• 14:02
  Speaker 1: a million books on what to buy, but other than
• 14:05
  Speaker 1: justin mamos what to sell exactly. Hey, here's your exit
• 14:10
  Speaker 1: and that and that's when the discipline and that's where
• 14:13
  Speaker 1: the discipline comes in. Yeah, exactly. So let me back
• 14:16
  Speaker 1: up and talk a little bit about you, because people
• 14:18
  Speaker 1: may not be familiar with with your background. So how
• 14:22
  Speaker 1: did you find your way to finance? Oh? Purely accidentally,
• 14:26
  Speaker 1: I graduated, um, you know, from from an Ivy League
• 14:30
  Speaker 1: school for which to ground. I went to Brown with
• 14:33
  Speaker 1: a master's in economics, and I kind of expected sort
• 14:36
  Speaker 1: of day after graduation, i'd sort of stick my head
• 14:38
  Speaker 1: out and I'd have five offers, you know, and all that.
• 14:40
  Speaker 1: And I didn't know how to look for a job.
• 14:42
  Speaker 1: And my first maybe, I mean, I had the temporary point,
• 14:44
  Speaker 1: but the first real job is looking for So I
• 14:46
  Speaker 1: went to employment agencies and I get they probably haven't
• 14:50
  Speaker 1: chased since that they don't exist. Yeah all right, So
• 14:54
  Speaker 1: but they weren't very effective, and I like a two
• 14:56
  Speaker 1: weeks I think, you know, I didn't hair back anythings.
• 14:58
  Speaker 1: I got frustrated. So I just at the time New York,
• 15:01
  Speaker 1: the New York Times had a help not a help wanted,
• 15:04
  Speaker 1: but but position wanted a section and so for about
• 15:08
  Speaker 1: six job secret so like I think it costs me
• 15:12
  Speaker 1: like fourteen dollars or fifteen dollars. I put a two
• 15:16
  Speaker 1: line ad in and something along the line, uh, you know,
• 15:19
  Speaker 1: masters and an economics minor and math looking for an
• 15:22
  Speaker 1: analytical job pretty much. And I had about I don't
• 15:26
  Speaker 1: know the sixteen seventeen responses to that, uh all but one.
• 15:31
  Speaker 1: All but one were come ons. In other words, the
• 15:34
  Speaker 1: people they want you to say, they want you exactly
• 15:38
  Speaker 1: they want you to buy. It was like these chain
• 15:40
  Speaker 1: cell you know you they'll sell you, uh two thousand
• 15:42
  Speaker 1: dollars worth of soap bubbles and you go find double
• 15:44
  Speaker 1: people to sell at that type of thing. I went.
• 15:46
  Speaker 1: I went to one of these, uh thinking I was
• 15:49
  Speaker 1: going to a meeting of the company, and uh that
• 15:53
  Speaker 1: it was a manager. I said, well, I said, I
• 15:54
  Speaker 1: asked even the phone, this is not a sales we
• 15:56
  Speaker 1: have sales, but this is and I'm expecting to meet
• 15:59
  Speaker 1: this group of uh you know, at ah at the
• 16:01
  Speaker 1: quarterly meeting or whatever. And I walked in. It is
• 16:04
  Speaker 1: like this huge auditorium and it's like a display in
• 16:07
  Speaker 1: the front. And then and they have her on a
• 16:09
  Speaker 1: film with I think of Sebastian Cabital telling you, telling
• 16:12
  Speaker 1: how great this product. And then they have a guy
• 16:13
  Speaker 1: who has some sort of chemist who fell off a
• 16:16
  Speaker 1: roof supposedly, and while he was in the hospital to
• 16:18
  Speaker 1: think how he can make his life his wife's job easier,
• 16:21
  Speaker 1: and sort of came up with this miracle cleaning product
• 16:24
  Speaker 1: and anyway, and and then they have a guy come
• 16:26
  Speaker 1: out and tell you how he drives a portion uh
• 16:29
  Speaker 1: makes uh you know, how you can make ten dollars
• 16:31
  Speaker 1: spare time. Really literally, this was it. Uh. I went
• 16:34
  Speaker 1: to one of these obviously, and then any calls I
• 16:36
  Speaker 1: got there after. But there was one legitimate call, and
• 16:40
  Speaker 1: that legitimate call, as fate would have it, was a
• 16:43
  Speaker 1: research analyst position that was being vacated by Michael Marcus.
• 16:48
  Speaker 1: Michael Marcus who ultimately who was leaving to become a trader,
• 16:53
  Speaker 1: and um, he ultimately became an incredible trader. We can
• 16:57
  Speaker 1: talk more about him later if you want. But he
• 17:01
  Speaker 1: and I met as he was leaving and I was
• 17:03
  Speaker 1: going in and sort of he still was in New
• 17:05
  Speaker 1: York for a while and he would get together for lunches,
• 17:08
  Speaker 1: you know, because this uh well, this was a firm
• 17:11
  Speaker 1: called at the times called the Rentals Securities, which then
• 17:14
  Speaker 1: mergeds the Dean Withino Reynolds and went into you know,
• 17:17
  Speaker 1: multiple ultimately it became well yes or who, I don't
• 17:22
  Speaker 1: know where they ultimately ended up. I didn't stay. I
• 17:24
  Speaker 1: I stayed for two years, and you know I was
• 17:26
  Speaker 1: I started out like making two thousands less than my secretary. Um,
• 17:31
  Speaker 1: why shared with the research director. And I was doing
• 17:34
  Speaker 1: I and enough analyst, we're doing really almost all the work. Um.
• 17:38
  Speaker 1: And then after two years, I just stuck and I
• 17:40
  Speaker 1: was writing for for the Predecessor. Now it's called Modern Trading,
• 17:44
  Speaker 1: and then before that was called Futures, and before that
• 17:45
  Speaker 1: it was originally called Commodities Magazine. And that's why I
• 17:49
  Speaker 1: started writing. As I started writing, and you know, column
• 17:52
  Speaker 1: I came. So so two years I had a little
• 17:54
  Speaker 1: bit of a reputation. I went and stuck my head out,
• 17:56
  Speaker 1: you know, instantaneously got a job, uh you know as
• 18:00
  Speaker 1: research director. Triple my salary, triple that salary, and so
• 18:03
  Speaker 1: so I left it that so, I you know, I
• 18:05
  Speaker 1: didn't stay at Reynolds too long. I'm Barry Rihults. You're
• 18:08
  Speaker 1: listening to Masters in Business on Bloomberg Radio. My special
• 18:11
  Speaker 1: guest today is Jack Schweger. He is the author of
• 18:15
  Speaker 1: the famous Market Wizard series of books, as well as
• 18:19
  Speaker 1: being a trader and entrepreneur. UM, let's talk a little
• 18:23
  Speaker 1: bit about the role of luck and skill with traders.
• 18:27
  Speaker 1: And I want to ask, what is a deceptively simple question,
• 18:32
  Speaker 1: how difficult is trading as a profession, as a as
• 18:37
  Speaker 1: to a profession when you can actually earn a living,
• 18:40
  Speaker 1: extremely extremely difficult than I don't think most people are
• 18:43
  Speaker 1: cut out for it. In fact, I don't think I'm
• 18:45
  Speaker 1: cut out for it. I know I've never wanted to. Uh.
• 18:49
  Speaker 1: If I were really good, then I maybe would have
• 18:52
  Speaker 1: entertained the idea of being a full time trader. But
• 18:54
  Speaker 1: I never was good enough, you know. UH, Being good
• 18:57
  Speaker 1: enough to be net profitable in the markets as very
• 19:00
  Speaker 1: very different from being good enough to your living, coming
• 19:03
  Speaker 1: from that you're you know, you're you're you're paying for
• 19:05
  Speaker 1: your expenses. So I never had that particular confidence that
• 19:10
  Speaker 1: I was I was good enough. And the only reason
• 19:12
  Speaker 1: I'm even profitable as a trader, uh is just because
• 19:16
  Speaker 1: I've I've just spoken his own e people, and I've
• 19:18
  Speaker 1: had so much experience. I actually as my my natural instincts,
• 19:23
  Speaker 1: uh are pretty poorly attuned for trading. I think most people. Yeah,
• 19:27
  Speaker 1: well actually most people's are, and I'm no exception. And
• 19:29
  Speaker 1: in fact, some of the traits that are important for
• 19:32
  Speaker 1: good trading. Which something you asked before, what one? That
• 19:35
  Speaker 1: one that comes up all the time is patients. Um,
• 19:38
  Speaker 1: you know, somebody like Jim Rogers has a great line.
• 19:40
  Speaker 1: He says, I don't do anything until there's there's money
• 19:43
  Speaker 1: lying in a corner on the floor, and all I
• 19:45
  Speaker 1: have to do is to go and pick it up.
• 19:46
  Speaker 1: So yeah, yeah, patients, just to wait for something that's
• 19:48
  Speaker 1: like a real setup, you know, a real fat pitch um.
• 19:51
  Speaker 1: And and similarly to stay with a position. You know
• 19:54
  Speaker 1: that the famous line from Reminiscences of a Stock Operator,
• 19:57
  Speaker 1: which I like the girl paraphrase, but I think it
• 20:00
  Speaker 1: was it might be the exact quote he said. It
• 20:03
  Speaker 1: was never uh. And for those listeners who don't know
• 20:06
  Speaker 1: the book, it's it's a book with the father's book
• 20:09
  Speaker 1: about Jesse Livermore. The Livermore is never identified. Everybody knows
• 20:13
  Speaker 1: it's Livermore and where the protagonist says. Uh. Talking about
• 20:17
  Speaker 1: what his success was due to, he says, it was
• 20:19
  Speaker 1: never my thinking that made the money. It was my sitting.
• 20:23
  Speaker 1: Got that my sitting. So he said, hey, I'm not
• 20:25
  Speaker 1: so smart. It's just I was able to stay and
• 20:27
  Speaker 1: stay and stay with a position I was working out.
• 20:30
  Speaker 1: So those that all speaks to patients. And it's a
• 20:33
  Speaker 1: trait that I my wife is listening to this recording
• 20:36
  Speaker 1: in the next room and actually probably would not ahead
• 20:38
  Speaker 1: when I say, you don't want to be with me
• 20:40
  Speaker 1: in the same car during a traffic jam. I am
• 20:42
  Speaker 1: not a patient person. That's that's that's interesting that there's
• 20:45
  Speaker 1: a wonderful book, you know, given all the wonderful books
• 20:49
  Speaker 1: on behavioral economics and and how people's cognitive issues are
• 20:56
  Speaker 1: are so very suspect. Frank Portnoy, who's probably best known
• 21:00
  Speaker 1: and for writing the book Infectious Greed, wrote a book
• 21:02
  Speaker 1: a few years ago called weight Um and it's a
• 21:06
  Speaker 1: fascinating look at the psychology behind that exact thing behind patients.
• 21:12
  Speaker 1: And it really is a trait that can be learned.
• 21:15
  Speaker 1: It's so important for for both traders and investors. Uh,
• 21:20
  Speaker 1: just look, you mentioned Brexit in the crazy market. You know,
• 21:23
  Speaker 1: I'm pretty confident that twenty years from now, when we
• 21:25
  Speaker 1: look back, this is gonna be a blip that we
• 21:28
  Speaker 1: will have forgotten, just like Abola was forgotten. Just like
• 21:33
  Speaker 1: you know, zekea I suspect is the next one that
• 21:36
  Speaker 1: makes huge headlines and then two years later it's like, oh,
• 21:39
  Speaker 1: whatever happened to you know, whatever happened to the chicken flu?
• 21:42
  Speaker 1: Wasn't that a big thing that was coming along? And
• 21:44
  Speaker 1: so anyway, um, let's so let's talk a little bit
• 21:47
  Speaker 1: about Look, how can somebody who's had a good run
• 21:52
  Speaker 1: of trades identify the difference between trades that are based
• 21:57
  Speaker 1: on skill and just getting lucky in there? Right? You
• 22:01
  Speaker 1: can never identify any particularly group of trades whether you're
• 22:03
  Speaker 1: just lucky your skill and it's always luck involved. But
• 22:07
  Speaker 1: luck is is the longer you go, the less luck
• 22:11
  Speaker 1: will win out. In other words, you can you can
• 22:13
  Speaker 1: have a streak, have a hot streak for a while,
• 22:15
  Speaker 1: and that could last for days, weeks, maybe even months,
• 22:18
  Speaker 1: but that's not gonna go on for you, right, So um,
• 22:21
  Speaker 1: eventually skill wins. Yeah. And and so if you're kind
• 22:24
  Speaker 1: of almost most years a year in, year out, you're
• 22:27
  Speaker 1: you're kind of that profitable. You never put your account
• 22:29
  Speaker 1: into real danger by allowing a deep draw down. And
• 22:34
  Speaker 1: so if if you're doing that, that's probably skilled then
• 22:37
  Speaker 1: because luck alone, unless unless I should make a provis
• 22:41
  Speaker 1: so you can have more bull markets go on for
• 22:44
  Speaker 1: multiple years. So if your approach is just to to
• 22:47
  Speaker 1: just go long, uh and stay long, and it's and
• 22:51
  Speaker 1: you're making you're doing well, and it's in a bull market,
• 22:53
  Speaker 1: all you can assume is you've been long during a
• 22:56
  Speaker 1: bull market. You have no idea what's gonna happen when
• 22:58
  Speaker 1: you have a bear market. So well, but there is
• 23:00
  Speaker 1: some skill to being on the right side. Well it's fine,
• 23:03
  Speaker 1: but if you've only been on one side in your trading.
• 23:06
  Speaker 1: You know, people saw trading, they saw trading. How many
• 23:08
  Speaker 1: people thought they were genius as they saw the trading
• 23:10
  Speaker 1: in the right so uh, and they you know, but
• 23:14
  Speaker 1: they continue trading through two thousand and two thousand and
• 23:16
  Speaker 1: one thinking it was gonna be the same thing. And
• 23:18
  Speaker 1: so yeah, they may have doubled their money, tripled their money,
• 23:21
  Speaker 1: but then draw down takes care of all of that.
• 23:24
  Speaker 1: That that's the famous Buffett quote is when the tide
• 23:27
  Speaker 1: goes out, we find out who's been swimming naked. And
• 23:30
  Speaker 1: so that that that no doubt about that. You go
• 23:33
  Speaker 1: through a full cycle, you find out if you actually yeah,
• 23:36
  Speaker 1: so that's that's only you can't tell if anybody is
• 23:38
  Speaker 1: good or not, uh without you know, out really seeing
• 23:42
  Speaker 1: them through through a bare phase. And actually just to
• 23:45
  Speaker 1: criticize myself here, um, there was one I have another
• 23:48
  Speaker 1: have A fourth market was a book called stock Market Wizards,
• 23:52
  Speaker 1: which I wrote right at the tail it was right
• 23:55
  Speaker 1: to turn you know, night late, so really at the
• 23:57
  Speaker 1: end of the bull market. Um. And and I was
• 24:01
  Speaker 1: specific to make the book different from the other market
• 24:03
  Speaker 1: was the books. I took the theme just stock marks.
• 24:05
  Speaker 1: I was interviewed only stock traders. So by by definition,
• 24:08
  Speaker 1: when I was doing the book, I was doing a
• 24:10
  Speaker 1: book of only stock traders right after a long long act.
• 24:12
  Speaker 1: Bullmarket was eighty two, right, we both know that. So
• 24:18
  Speaker 1: and but I tried. I thought I was taking people
• 24:20
  Speaker 1: who you know, also had the control, you know, who
• 24:23
  Speaker 1: would who would do okay uh in a bear market?
• 24:26
  Speaker 1: And oh would survive? But it turned out that yeah,
• 24:29
  Speaker 1: some of them did, but but quite a few didn't.
• 24:32
  Speaker 1: And so no, the book is out. The book is out,
• 24:37
  Speaker 1: and some of the guy you know, there are some
• 24:39
  Speaker 1: there are some famous people in there, like the Shaw
• 24:41
  Speaker 1: and and well controversial on Stevie Combe. But regardless of
• 24:45
  Speaker 1: what a yeah, regardless of you know, my my thing
• 24:49
  Speaker 1: about Steve coolee I I don't know anything more than
• 24:51
  Speaker 1: anybody else knows how to reading the press and all
• 24:53
  Speaker 1: of that. Uh. I know if that if there was
• 24:55
  Speaker 1: anything really obvious, they would have certainly have loved to
• 24:58
  Speaker 1: nail him, and they never did. Um. But if people
• 25:01
  Speaker 1: want to argue that he made so you know he
• 25:03
  Speaker 1: made inside of trades, I don't. I don't know. I
• 25:06
  Speaker 1: don't know the question with him, But was there a
• 25:08
  Speaker 1: lack of supervision over the pel Well that's that's that's question,
• 25:11
  Speaker 1: right right. But so but even if you wanted what
• 25:14
  Speaker 1: I'm saying is evening people want to say, hey, you
• 25:15
  Speaker 1: know these people work for him. He would have known
• 25:17
  Speaker 1: he was, but he there's a guy who does, like god,
• 25:22
  Speaker 1: thirty thousand trades a year, who knows why he's half
• 25:24
  Speaker 1: the volume and you look at his record. You could
• 25:28
  Speaker 1: cut his record in half and you still have one
• 25:30
  Speaker 1: of the best records of all time. So you know,
• 25:32
  Speaker 1: so what if you if af you trades it doesn't
• 25:34
  Speaker 1: make it. It doesn't from him. He is an incredible trader,
• 25:38
  Speaker 1: didn't no matter what anybody says. So let me ask
• 25:41
  Speaker 1: you one question that I've always found fascinating. And this
• 25:44
  Speaker 1: has to be right in your in your sweet spot
• 25:48
  Speaker 1: when you talk about skill and luck and psychology. We
• 25:53
  Speaker 1: all know traders who are like this. They take credit
• 25:56
  Speaker 1: for all the winning trades, but there's always an excuse.
• 25:59
  Speaker 1: They're always casting blame on any of the losses. Why
• 26:04
  Speaker 1: what's that about. That's well, actually the trader. If trader
• 26:07
  Speaker 1: does that, I'll take I'll give you better than even
• 26:09
  Speaker 1: I'll give you two to one odds. They're gonna they're
• 26:11
  Speaker 1: gonna they're gonna fail. They're gonna blow up, They're gonna
• 26:13
  Speaker 1: blow there. They're gonna fail anybody. And that's when I
• 26:16
  Speaker 1: talk about trades. I mean, any decent trader will admit
• 26:20
  Speaker 1: that it's his, you know, or hard fault, who pull
• 26:23
  Speaker 1: the trigger, whose fingers were right? And and and the
• 26:26
  Speaker 1: bad luck comes into it all the time. I can't
• 26:28
  Speaker 1: tell you how many times I get, oh, the other thing,
• 26:31
  Speaker 1: the one for the last week, I uh, it was
• 26:33
  Speaker 1: like a coco trade, and uh, I kind of picked
• 26:36
  Speaker 1: my and one of my one of my types of
• 26:37
  Speaker 1: trade is I'd like to buy markets um counter trend
• 26:42
  Speaker 1: uh at spots where I think that they'll they'll be
• 26:46
  Speaker 1: sold sold out, aboard out or whatever risk reward and
• 26:51
  Speaker 1: or you get a bounced dealing exactly. And so my
• 26:54
  Speaker 1: my er, my order rests there, and I have a
• 26:56
  Speaker 1: stop that dress there. So one morning, well you know,
• 26:59
  Speaker 1: I like up and I look at the trades, and boy,
• 27:01
  Speaker 1: I'm in and out of the coco trade um. And
• 27:04
  Speaker 1: this was the one day was like bizarre. It was like,
• 27:08
  Speaker 1: you know, the market that day, don't even know if
• 27:10
  Speaker 1: there was any news, but it traded like about twenty
• 27:12
  Speaker 1: times the range of normally trades. And I remember that
• 27:14
  Speaker 1: one day and its spiked down in one minute. I
• 27:16
  Speaker 1: don't even know if there was any news. It spiked
• 27:18
  Speaker 1: down a few under points in one minute. My so
• 27:20
  Speaker 1: here I get in, which would have been I think
• 27:22
  Speaker 1: a great entry. But then like and within one minute's time,
• 27:26
  Speaker 1: I think, you know, within seconds, it's like ticks down
• 27:29
  Speaker 1: sort of like three ticks. You know, I had two
• 27:31
  Speaker 1: stops when you know one is it like right almost
• 27:33
  Speaker 1: at a low one thing but like a second apart
• 27:35
  Speaker 1: or whatever. And then it goes right back up again.
• 27:37
  Speaker 1: So sure you could say that's bad luck. And maybe
• 27:40
  Speaker 1: you know that trade I think was bad luck. But
• 27:43
  Speaker 1: that does make a difference. The point is, over time, Uh,
• 27:45
  Speaker 1: it should make any difference, because I'll have good luck
• 27:47
  Speaker 1: to you know, just the bad ones. You really notice
• 27:50
  Speaker 1: the good ones, you figure the good ones. You're small
• 27:52
  Speaker 1: on on the bad ones of bad luck. Right, So
• 27:54
  Speaker 1: in the old days I would have blamed the specialist
• 27:56
  Speaker 1: for I don't know if we could do that. I'm
• 27:59
  Speaker 1: very hults. You're listening to Masters in Business on Bloomberg Radio.
• 28:04
  Speaker 1: My special guest today is Jack Schweger. He is the
• 28:07
  Speaker 1: author of the Market Wizards series of books, as well
• 28:11
  Speaker 1: as a number of books on futures trading and technical training. Uh.
• 28:15
  Speaker 1: He's also has been a trader for for several decades.
• 28:20
  Speaker 1: You know, the last time you were visiting us, you
• 28:22
  Speaker 1: were just in the process of launching a company called
• 28:26
  Speaker 1: fund Seeder, and you're using some technology to try to
• 28:30
  Speaker 1: identify the new emerging traders that are coming up through
• 28:36
  Speaker 1: the ranks. Tell us a little bit about about how
• 28:39
  Speaker 1: this works. Sure, so the concept of fund Seeder is
• 28:42
  Speaker 1: globally now, not just the US or industrialized nations. There
• 28:46
  Speaker 1: are there are just who knows how many hundreds of
• 28:49
  Speaker 1: thousands of millions of traders. Now most of them are
• 28:52
  Speaker 1: not gonna be any good, but you don't need You
• 28:54
  Speaker 1: only need a tiny fraction of one percent that are good.
• 28:57
  Speaker 1: And that's a realistic expectation. But don't have it. They'll
• 29:00
  Speaker 1: never be discovered. They might be in countries where there's
• 29:02
  Speaker 1: no no real place for no institutional infrastructure exactly. Yeah,
• 29:07
  Speaker 1: you've got people. Let's say you got a mathematician in
• 29:09
  Speaker 1: East and Europe. Let's say right comes up with a
• 29:11
  Speaker 1: great algorithm and making money on markets. It doesn't have
• 29:13
  Speaker 1: much money to trade. Nobody will discover them, nobody will
• 29:16
  Speaker 1: speak to him. So you know, our idea was create
• 29:20
  Speaker 1: a central spot on the web where traders could go
• 29:23
  Speaker 1: get their track records verified on daily data and by verified,
• 29:28
  Speaker 1: verified by because the track records and the numbers come
• 29:31
  Speaker 1: not from the traders, but they come directly by linking
• 29:34
  Speaker 1: their account from their custodians. Yeah, it's from the broker.
• 29:37
  Speaker 1: So so we're getting downloads direct of course with the
• 29:39
  Speaker 1: traders or for rization, we're getting downloads of the daily results.
• 29:42
  Speaker 1: So so let me, let me stop you right there.
• 29:44
  Speaker 1: I know that when guys are launching hedge funds or
• 29:46
  Speaker 1: any sort of proprietary trading operation, the first question that
• 29:50
  Speaker 1: gets asked is show me your ordered returns. This really
• 29:55
  Speaker 1: is a way to say without spending tens of thousand
• 29:58
  Speaker 1: dollars on audits and with out going through the whole
• 30:02
  Speaker 1: process which could be thirty or fifty or a hundred
• 30:05
  Speaker 1: thousand dollars to tee up a fund, this at least
• 30:08
  Speaker 1: gives you a way to rank different traders on their
• 30:12
  Speaker 1: at least recent performance. Yeah, or actually as depending on
• 30:16
  Speaker 1: what broker, could be their entire performance. Uh. But it's
• 30:19
  Speaker 1: not mentor as replacement for a lot, but it is
• 30:21
  Speaker 1: meant as getting really numbers we believe are probably quite true.
• 30:25
  Speaker 1: It's an initial screens initial screening, right, So before this,
• 30:28
  Speaker 1: how would any of these people ever be found? They
• 30:32
  Speaker 1: were seen? They wouldn't. I mean they wouldn't. And that's
• 30:34
  Speaker 1: why I mean, I think, what is like something like
• 30:37
  Speaker 1: six or eighty um plus billion dollar funds controls sort
• 30:42
  Speaker 1: of of the I think the numbers like any it's
• 30:47
  Speaker 1: a very I mean, it's just super and it gets
• 30:52
  Speaker 1: more and more concentrated seams over the years. So we
• 30:54
  Speaker 1: live in a world where big money, all the instance,
• 30:57
  Speaker 1: tuial money goes to the same big traders, and everybody
• 31:00
  Speaker 1: else has sort of left out of it. Robert Frankl's
• 31:02
  Speaker 1: this the winner take All society, And uh, it's true
• 31:06
  Speaker 1: about movies. It's true about you know, there's a handful
• 31:09
  Speaker 1: of superstar musicians and then everybody and we're trying to
• 31:11
  Speaker 1: swim in the other direction. Our our though, it is
• 31:13
  Speaker 1: is a lot of talent out there that just has
• 31:15
  Speaker 1: no way of getting found. If we provide a venue
• 31:17
  Speaker 1: where they can be found discovered, then we can utilize
• 31:21
  Speaker 1: that database to uh even introduce them to invest So
• 31:25
  Speaker 1: that on one side is fun suitor technology. So this
• 31:28
  Speaker 1: is how you you're screening for these people? Well yeah,
• 31:30
  Speaker 1: and what what what fun see? The technology The main
• 31:32
  Speaker 1: technology there is it's a platform for traders traders. First
• 31:35
  Speaker 1: of all, it's the link you know, traders can get
• 31:36
  Speaker 1: their track records linked through the broker and getting verified
• 31:39
  Speaker 1: daily record. But then it does nice neat stuff which
• 31:43
  Speaker 1: like a trader would love to see a daily equity curve,
• 31:45
  Speaker 1: it's let be very difficult to get. I don't know
• 31:47
  Speaker 1: if any brokers that have daily equity curves, and and
• 31:50
  Speaker 1: I find what that is because I'm when I think
• 31:51
  Speaker 1: here curve, I'm thinking yield curve. No, No, so your
• 31:54
  Speaker 1: equity day by day, you know, you think simply he's
• 31:57
  Speaker 1: trying to start off a hundred thousand, you make five thousand,
• 31:59
  Speaker 1: got a hundred five, you lose seven, you got ninety eight?
• 32:01
  Speaker 1: That track record over time? What does it look like?
• 32:04
  Speaker 1: You know? So HOPEFU up the right right, but when
• 32:09
  Speaker 1: are you starting to deviate comm you know on pattern?
• 32:11
  Speaker 1: What what does it look like over time? What are
• 32:13
  Speaker 1: the what are the average or what are the We
• 32:15
  Speaker 1: have all sorts of analytics on that. So but just
• 32:17
  Speaker 1: to saw the basic equicur of just to be able
• 32:19
  Speaker 1: to see how your equity is fluctuating over time itself
• 32:23
  Speaker 1: is a really good important thing to have. So that
• 32:25
  Speaker 1: that's the find these obscure and unknown that's what they get. Well,
• 32:30
  Speaker 1: that's what they create, and then they can do all
• 32:31
  Speaker 1: sorts e finality, they can create underwater curves. Also the stats,
• 32:34
  Speaker 1: all sorts of studies like what happens like you could
• 32:37
  Speaker 1: apply moving averages, let the cross over moving average your
• 32:40
  Speaker 1: equity curve and say what would have happened if every
• 32:42
  Speaker 1: time there's a tenant forty moving average cross down, I
• 32:45
  Speaker 1: stopped trading and I didn't start until the cross stop
• 32:47
  Speaker 1: questions like that. So that that stuff is there and
• 32:50
  Speaker 1: it's free. So let's take the flips oute of this.
• 32:52
  Speaker 1: What is okay? So we can't do any investment on
• 32:57
  Speaker 1: that for compliance reason and all that. You know. So
• 33:00
  Speaker 1: we have a separate company called fund Seeder Investments, which
• 33:03
  Speaker 1: will use the database created on fund seater Technologies, which
• 33:07
  Speaker 1: is the fund seater dot com side is fund Seater Technologies,
• 33:10
  Speaker 1: and we'll find the you know, by ranking, by searching.
• 33:14
  Speaker 1: We got search fielders and all that will find the
• 33:16
  Speaker 1: best traders. Those traders we that we leave have potential.
• 33:20
  Speaker 1: We may have investors who are looking for certain types
• 33:22
  Speaker 1: of traders. We can play the introductory role or one
• 33:25
  Speaker 1: of one. One of our plans is hopefully by next
• 33:27
  Speaker 1: year we'll have an emerging manager fund and so we'll
• 33:30
  Speaker 1: take a bunch of these guys and gals and put
• 33:32
  Speaker 1: them into one fund and UH and also create a
• 33:35
  Speaker 1: fund and this is important. Our our plan right now
• 33:38
  Speaker 1: is to create a fund that also is much fairer
• 33:40
  Speaker 1: to investors because as you're being part of this is
• 33:43
  Speaker 1: this industry. No, it's you know, it's heads head's eye win,
• 33:48
  Speaker 1: tails you lose, you know, I mean it's like you can't.
• 33:53
  Speaker 1: The trader, no matter what happens, always has a free call.
• 33:55
  Speaker 1: I'm Barry rid Hilts. You're listening to Masters in Business
• 33:59
  Speaker 1: on Bloomberg Radio. My special guest today is author and
• 34:03
  Speaker 1: trader Jack schweger Uh, author of the famous Market Wizards
• 34:08
  Speaker 1: series of books. So let's let's go back to those
• 34:12
  Speaker 1: three books or four books. And I wanted to ask
• 34:16
  Speaker 1: you mentioned the idea came to you because you really
• 34:19
  Speaker 1: just wanted to chat with some traders and maybe maybe
• 34:22
  Speaker 1: learn some stuff. Um. The response had to be really tremendous.
• 34:28
  Speaker 1: Were you surprised at how well received the books became? Yes? Yes,
• 34:33
  Speaker 1: And but it always sounds a little bit kind of
• 34:35
  Speaker 1: conceder what I did when I wrote the book I
• 34:38
  Speaker 1: mentioned like Reminiscences of a Stock Operator originally right, Um,
• 34:41
  Speaker 1: I did. I did have a goal of doing a
• 34:44
  Speaker 1: modern day version over my formats totally different, But I didn't.
• 34:49
  Speaker 1: The thing I had in mind is I was reading Reminiscences,
• 34:51
  Speaker 1: which I've always the best book on trading that I
• 34:54
  Speaker 1: ever you know read. Um, I was reading at sixty
• 34:57
  Speaker 1: five years after his publication day, and it was still
• 34:59
  Speaker 1: totally reliant even though the market today, Yeah that is
• 35:02
  Speaker 1: today is too right. So my goal was to do
• 35:05
  Speaker 1: a book that hopefully in sixty five years from then,
• 35:08
  Speaker 1: you know, people would still be reading because it's still
• 35:10
  Speaker 1: totally relevant. So that was my goal. Uh, the fact that, yeah,
• 35:13
  Speaker 1: you had to feel like as you were working your
• 35:15
  Speaker 1: way through it and and re editing it and rereading it,
• 35:19
  Speaker 1: you know, you you had to be hey, this stuff
• 35:21
  Speaker 1: is pretty I thought, well yeah, and and and to
• 35:23
  Speaker 1: that the editing part is interesting and you maybe appreciate it. Um.
• 35:26
  Speaker 1: You know, people sometimes think, hey, one comment I get
• 35:29
  Speaker 1: is for you know, you're you're a great interview you know,
• 35:31
  Speaker 1: you're a great interviewer. You know you really ask great questions.
• 35:34
  Speaker 1: You're really you know, and I say, no, I'm not
• 35:36
  Speaker 1: a great interviewer. When I'm what I am is I'm
• 35:38
  Speaker 1: a really great editor because I because I got like,
• 35:43
  Speaker 1: you know, I have like ten or twenty times and
• 35:44
  Speaker 1: material I actually used for the book. And not only that, Um,
• 35:49
  Speaker 1: you know a lot of times you have these guys,
• 35:50
  Speaker 1: you know, you get conversations people go off from tangents,
• 35:52
  Speaker 1: and it works well in this type of format, right,
• 35:56
  Speaker 1: It's okay, you don't notice it because that's the way
• 35:58
  Speaker 1: we speak. But in a written in a written format,
• 36:00
  Speaker 1: if you if I did verbatim of what everybody said,
• 36:04
  Speaker 1: it would sound deliterate, confusing, boring, you know. So my goal,
• 36:10
  Speaker 1: and a journalist, I guess the journalist goal is, would
• 36:12
  Speaker 1: be exactly word for word accurate. My goal was to
• 36:15
  Speaker 1: be as accurate to the truth that I could. So
• 36:18
  Speaker 1: if I if a trader was like going somewhere, it
• 36:20
  Speaker 1: didn't finish the point. I knew what he was going
• 36:23
  Speaker 1: to make the point, I would finish the point. But
• 36:25
  Speaker 1: of course the traders I get. Let the traders read
• 36:27
  Speaker 1: the end of product, and they always so they actually
• 36:29
  Speaker 1: reviewed and said, well, the words, well, they never even
• 36:32
  Speaker 1: knew I changed I mean anything, you know. They what
• 36:35
  Speaker 1: I was trying to do was get as close to
• 36:37
  Speaker 1: what they were trying to say in a most readable form,
• 36:40
  Speaker 1: throwing out the stuff that was didn't have anything to say.
• 36:43
  Speaker 1: And I was boring and and keeping the best parts
• 36:46
  Speaker 1: and and reshuffling it so it's flowed so you don't
• 36:50
  Speaker 1: discuss the same thing in eighteen different spots. And but
• 36:53
  Speaker 1: it was all It was a combination of trying to
• 36:55
  Speaker 1: be as true as possible to what they were communicating
• 36:58
  Speaker 1: while making it as readable as possib so trying to
• 37:01
  Speaker 1: really serve both purposes. And that was that was what
• 37:03
  Speaker 1: I was trying to do. And nobody ever thought that
• 37:05
  Speaker 1: I had changed. I don't think they ever realized that.
• 37:07
  Speaker 1: They probably thought it was verbat him because that's what
• 37:10
  Speaker 1: I was just pretty close to. It was what they
• 37:13
  Speaker 1: hoped for being a Yeah. So, so, over the course
• 37:16
  Speaker 1: of the fore Market Wizards books, did you notice anything
• 37:19
  Speaker 1: that had changed in the world and in the markets
• 37:23
  Speaker 1: or was it the focus just simply in a different
• 37:25
  Speaker 1: aspect of of in the world. The world marks to change.
• 37:29
  Speaker 1: For one thing, I had like people who had floor
• 37:31
  Speaker 1: trading experience, and some of the most colorful stories, and
• 37:34
  Speaker 1: in Market Wizards come you know, like Paul tr To
• 37:37
  Speaker 1: Jones with the trade that almost blew them out of business.
• 37:39
  Speaker 1: You know where we he puts on a trade way
• 37:41
  Speaker 1: too large, and and it's in a cotton pit, and
• 37:44
  Speaker 1: and that the broker who almost kills himself trying to
• 37:47
  Speaker 1: get to the the opposite side of the order. Has
• 37:50
  Speaker 1: they is they broken? For the merchant that owns all
• 37:53
  Speaker 1: of the Liberals supply, and Paul knows he's dead in
• 37:55
  Speaker 1: the water and he really almost completely wiped out in
• 37:57
  Speaker 1: a trade. But stories like that, those couldn't not more
• 38:00
  Speaker 1: because the floors don't exist anymore. So those things change.
• 38:03
  Speaker 1: But but the realities and what what makes trading successful
• 38:07
  Speaker 1: and not successful, those things happened. So last question before
• 38:11
  Speaker 1: we get into some of the specific trades that are
• 38:14
  Speaker 1: so fascinating. Um it has to be just tremendously gratifying
• 38:19
  Speaker 1: to see how successful the books have comes you do
• 38:22
  Speaker 1: you ever stop and say, I never in a million
• 38:24
  Speaker 1: years expected this that. Yeah, I guess I didn't think
• 38:27
  Speaker 1: that far. I like, I say, the fact that the
• 38:30
  Speaker 1: visual market was is now is going on, I don't
• 38:32
  Speaker 1: know twenty Uh, well it was past. It's well eight
• 38:38
  Speaker 1: and two years we will be eight now, something like
• 38:40
  Speaker 1: twenty eight years since I wrote it. So um, so
• 38:44
  Speaker 1: that is really was like the goal I was trying
• 38:46
  Speaker 1: to reach, and my surprise, I don't know, maybe I was.
• 38:50
  Speaker 1: Maybe I was didn't realize how difficult, how difficult that
• 38:52
  Speaker 1: should be, but it, uh, it was what I was
• 38:55
  Speaker 1: trying to achieve. So let's talk about a few specific
• 38:58
  Speaker 1: traders who I find to be uh fascinating. Um ed,
• 39:03
  Speaker 1: I want to pronounce his name Dakota. Dakota. So he
• 39:06
  Speaker 1: says he doesn't trust publish his track record, but he
• 39:09
  Speaker 1: was rumored to have started with five thousand dollars and
• 39:13
  Speaker 1: turned it into tens of millions of dollars. Yeah. So,
• 39:16
  Speaker 1: so here's the thing with Sakoda. Um And this is
• 39:18
  Speaker 1: the thing. I try to verify people as much as
• 39:20
  Speaker 1: I can in any ways you can, but sometimes you're
• 39:22
  Speaker 1: you're dealing with people that are just probably not managing
• 39:25
  Speaker 1: people's money that you're lucky to get them to interview. Now, Sakoda,
• 39:29
  Speaker 1: his name came up because I didn't know who he was.
• 39:32
  Speaker 1: I had interviewed Michael Marcus, who I knew personally mentioned
• 39:36
  Speaker 1: and just so people have context, Michael Mark, we're talking
• 39:38
  Speaker 1: about a guy that Commodity Scope, which used to be
• 39:41
  Speaker 1: a different type of firm, but they were like a
• 39:43
  Speaker 1: prop trading firm, future traders. Uh. They gave Michael thirty
• 39:47
  Speaker 1: thou dollar account and about a dozen years later that
• 39:50
  Speaker 1: that account was worth eighty million, and that was with
• 39:52
  Speaker 1: them taking out like a year for expenses. Uh. So
• 39:56
  Speaker 1: I just the normally that track. He had a string
• 39:59
  Speaker 1: of year Marcus. Yeah, Michael Mark said triple digit returns
• 40:02
  Speaker 1: for you know, he might have had a quadruple digit
• 40:05
  Speaker 1: I mean he had he had just astounding, He did astounding.
• 40:09
  Speaker 1: That was all all. This was all futures, and this
• 40:12
  Speaker 1: was in the seventies and early eighties and these markets
• 40:14
  Speaker 1: were just but he he knew how to He just
• 40:17
  Speaker 1: knew how to exploit that type of market and so
• 40:19
  Speaker 1: he built a fortune in that period. But when I
• 40:22
  Speaker 1: interviewed him, he said, you know, he should speak, and
• 40:25
  Speaker 1: he didn't. He didn't want to do the interview because
• 40:27
  Speaker 1: he's a very very private person. He's never done another
• 40:29
  Speaker 1: interview as far as I know. Uh yeah, he nobody
• 40:33
  Speaker 1: would have known who he is. He's very shy, very quiet,
• 40:35
  Speaker 1: very photos Uh yeah, that doesn't give any talks, doesn't Yeah.
• 40:39
  Speaker 1: I don't think you'll find a photo of him. Uh
• 40:41
  Speaker 1: So that's Michael Marcus. And he agreed reluctantly and only
• 40:44
  Speaker 1: through the intervention of a mutual friend to do the interview,
• 40:47
  Speaker 1: and I flew out the Malibudha interview him, spent the day,
• 40:50
  Speaker 1: spent two days at his house, and the day we
• 40:52
  Speaker 1: did the full interviews all over the on the beach
• 40:54
  Speaker 1: and walking and sitting and whatever. You recording it, are
• 40:58
  Speaker 1: recording it? Yeah, oh yeah, yeah, you know every mean
• 41:00
  Speaker 1: I had two recorders. I didn't take any chances. And uh, anyway,
• 41:04
  Speaker 1: at the end of dinner, which cooked by his ship,
• 41:07
  Speaker 1: you know, his his in house chef, and and uh
• 41:10
  Speaker 1: he puts pull push us back the chair, and he says,
• 41:12
  Speaker 1: you know, you know this wasn't half bad. This was
• 41:15
  Speaker 1: kind of a cathodic experience. You know, I kind of
• 41:17
  Speaker 1: find the found that much of that strong praise from
• 41:20
  Speaker 1: not half bad. So he was the one who said,
• 41:25
  Speaker 1: then you too, you know you should didn't the view,
• 41:27
  Speaker 1: you shouldn't use Sakoda be courts. Dakota is the best
• 41:30
  Speaker 1: trader I know. Really, so this is a guy that turns.
• 41:32
  Speaker 1: Coming from a rock star, he turns so so I
• 41:36
  Speaker 1: know sa Coda is the real thing, because I know
• 41:38
  Speaker 1: this guy I worked to come out in his corps.
• 41:40
  Speaker 1: I know he's real. I know he did this amazing sting.
• 41:43
  Speaker 1: And and Michael Marcus not only that, he Michael Marcus
• 41:46
  Speaker 1: hired Covenor and was you know Covernor worked with you
• 41:50
  Speaker 1: know that was that was Marcus protege Covenan had his
• 41:53
  Speaker 1: own style. And and Caxton, you know, getting one of
• 41:57
  Speaker 1: the greatest traders of modern times. You know he can
• 42:00
  Speaker 1: that that and and so just to give you an idea,
• 42:03
  Speaker 1: so so Mark, So somebody like Marcus is telling you
• 42:05
  Speaker 1: about the best trading he knows. Um, you know, means
• 42:09
  Speaker 1: that's real, that's real. Yeah. And was it like with Sakoda?
• 42:12
  Speaker 1: How Sakoda is a very odd character, very very kind
• 42:16
  Speaker 1: of galactic. If you could use that as a colorful.
• 42:20
  Speaker 1: He'd like to free He had all he had a
• 42:22
  Speaker 1: phrase for everything, you know. So I noticed, like I
• 42:25
  Speaker 1: was there and I said, you know, hey, I noticed
• 42:27
  Speaker 1: you don't have a quote machine on your desk. And
• 42:30
  Speaker 1: he said, he said, having a coute machine in your
• 42:33
  Speaker 1: desk is like having a slot machine on your desk
• 42:35
  Speaker 1: and the feeding ofod quarters all day. So his idea
• 42:39
  Speaker 1: was he picks his trades. You know, he did a
• 42:40
  Speaker 1: sustematically he put it in, he doesn't want to watch it,
• 42:43
  Speaker 1: doesn't want to be he doesn't want to be enticed
• 42:44
  Speaker 1: by the market to do stuff that's outside of what
• 42:46
  Speaker 1: the approaches. So the noise uh in the background is
• 42:50
  Speaker 1: can be compelling and attractive and he basically, so I'm
• 42:54
  Speaker 1: gonna assume no TVs in his office? Well no, and
• 42:56
  Speaker 1: then this is back into this is what we did
• 42:58
  Speaker 1: this in the eighties he off to TVs and stuff,
• 43:00
  Speaker 1: but it was it wasn't as prevalent to have the
• 43:02
  Speaker 1: big screens and all that. How about Marty Schwartz, Schwartz was, Yeah,
• 43:06
  Speaker 1: he was very intense. Schwartz is a very intense guy. Schwartz,
• 43:09
  Speaker 1: by the way, also had this when I and people,
• 43:12
  Speaker 1: these people can't keep up records like this, but Schwartz, Uh,
• 43:15
  Speaker 1: like a ten year record, which he had ordered. This
• 43:18
  Speaker 1: is one of the times he was very proudly showing
• 43:21
  Speaker 1: me his numbers because I know it. I want you. Yeah, okay,
• 43:24
  Speaker 1: it is nobody's gonna believe this. It's twenty five percent
• 43:27
  Speaker 1: a year, a month, a month for ten years, for
• 43:36
  Speaker 1: ten ten years. Uh stock only stock index futures, stocking.
• 43:41
  Speaker 1: He just traded stock index futures and and he had
• 43:45
  Speaker 1: only he only had I think two or three losing
• 43:48
  Speaker 1: months in the entire period. And I think his worse
• 43:50
  Speaker 1: than losing Hi ups like a three percent loss. And
• 43:52
  Speaker 1: he went out and it was two and he went
• 43:53
  Speaker 1: out of his way to tell me that those were
• 43:55
  Speaker 1: the months his kids were born, so he had distractions.
• 43:59
  Speaker 1: That's fair enough that those are some astonishing numbers and
• 44:02
  Speaker 1: and let's do uh Stanley Drucon Miller. Yeah, so you know,
• 44:06
  Speaker 1: Stanley Druccon Miller again one of the incredible traders of
• 44:09
  Speaker 1: all time. I think people don't know how great he
• 44:12
  Speaker 1: he was. I mean, first of all, he ran his
• 44:13
  Speaker 1: own Docane fund for close to forty years and probably
• 44:17
  Speaker 1: average around compounded trading billions of dollars. Uh uh. People
• 44:22
  Speaker 1: also a lot unless they read my book, would not
• 44:24
  Speaker 1: necessarily know that druck and Miller ran the Sources Quantum
• 44:27
  Speaker 1: Fund for a long period the when Source was in
• 44:30
  Speaker 1: Eastern Europe kind of doing of his stuff that he
• 44:32
  Speaker 1: was interested in doing, and so uh, really an extraordinary trader.
• 44:37
  Speaker 1: So if people want to find out more information about
• 44:40
  Speaker 1: either yourself for a fund seat or a market, wizards
• 44:42
  Speaker 1: with the best fund seater dot com. You know, just
• 44:46
  Speaker 1: a fun seater is like one word and what it
• 44:48
  Speaker 1: sounds like. And I have my own side which I
• 44:50
  Speaker 1: didn't do anything with. But you know, if you want
• 44:51
  Speaker 1: to get the books or any other links to any stuff.
• 44:54
  Speaker 1: Jack Schwegger dot com Jeff, thank you so much for
• 44:56
  Speaker 1: being say your time. We've in speaking with Jack Schwager,
• 45:01
  Speaker 1: author of Market Wizards. If you enjoy this conversation, be
• 45:05
  Speaker 1: sure and stick around for the podcast extras, where we
• 45:07
  Speaker 1: keep the tape rolling and continue chatting. Be sure to
• 45:10
  Speaker 1: check out my daily column on Bloomberg dot com or
• 45:14
  Speaker 1: follow me on Twitter at Rid Halts. I'm Barry Rit Halts.
• 45:19
  Speaker 1: You're listening to Masters in Business on Bloomberg Radio, brought
• 45:23
  Speaker 1: to you by B A s F. We Create Chemistry.
• 45:27
  Speaker 1: Welcome to the podcast. Thank you so much, Jack, Thank
• 45:30
  Speaker 1: you so much for doing this. You're you're one of
• 45:32
  Speaker 1: our few repeat guests. And I know I've said this before,
• 45:37
  Speaker 1: but I really have to reiterate. This show came about
• 45:45
  Speaker 1: because of because of Market Wizards. It came about because
• 45:49
  Speaker 1: I said, that looks like so much fun. When I
• 45:51
  Speaker 1: first started writing for Bloomberg, they said, hey, we have
• 45:54
  Speaker 1: these great facilities, it's a playground. What would you like
• 45:57
  Speaker 1: to do? And my answer was I want to find intelligent,
• 46:01
  Speaker 1: accomplished people, both from in investing and outside and sit
• 46:06
  Speaker 1: them down and have a Market Wizards like conversation. And
• 46:09
  Speaker 1: they were, okay, go do that that's really how this
• 46:13
  Speaker 1: came about. So the last time we spoke, I would
• 46:16
  Speaker 1: be I would be remiss if I did not point
• 46:18
  Speaker 1: this out. You reminded me of something fairly hilarious that
• 46:23
  Speaker 1: I had forgotten about, which was Amazon review of Market
• 46:28
  Speaker 1: Wizards from two thousand and three. So I actually went
• 46:32
  Speaker 1: out and pulled that review today and I just have
• 46:37
  Speaker 1: to share this with the audience because it's so funny.
• 46:40
  Speaker 1: Um the market strategist for New York City Investment Bank
• 46:42
  Speaker 1: bl blah blah blah. So when gave me this book
• 46:45
  Speaker 1: when I first got into the industry a decade ago.
• 46:48
  Speaker 1: So this is written in oh three, God, we are
• 46:51
  Speaker 1: getting old. I find myself rereading it every five years. Quote.
• 46:55
  Speaker 1: I highly recommended to anyone who was involved in the markets,
• 46:59
  Speaker 1: say we stated, this is the book for anyone who
• 47:03
  Speaker 1: wants to learn about trading or investing. It is simply
• 47:06
  Speaker 1: a must read. What's so utterly compelling about the interviews
• 47:10
  Speaker 1: is how consistent the themes are that arise from so
• 47:13
  Speaker 1: many different traders. This is true regardless of the markets
• 47:17
  Speaker 1: they work in, commodities, equities, currencies, bonds, or the style
• 47:21
  Speaker 1: they employ technical macro economic, fundamental quantitative the basic concepts
• 47:27
  Speaker 1: revealed by the Wizards or these discipline, capital, preservation, risk management,
• 47:34
  Speaker 1: individual responsibility, flexibility, intellectual honesty, and consistency. Now that's pretty fascinating.
• 47:42
  Speaker 1: And and that is a in the mouth the words
• 47:45
  Speaker 1: you use. You couldn't capture the book better. I mean
• 47:48
  Speaker 1: that really is what the what the book had said
• 47:51
  Speaker 1: to me. And I completely forgot about that. And that
• 47:55
  Speaker 1: is that. Yeah. But the thing is your review. You
• 47:58
  Speaker 1: know how Amazon has, uh, if you like a review,
• 48:00
  Speaker 1: you know it was helpful. Yeah, And so that review,
• 48:03
  Speaker 1: like I I don't know what it was like in
• 48:05
  Speaker 1: you know, ninety eight out of nine and nine people
• 48:06
  Speaker 1: found it helpful or something like it shows up as
• 48:09
  Speaker 1: the top reviewed review. And I completely so it's the
• 48:13
  Speaker 1: top ranked review of market Wizards. If you go to
• 48:16
  Speaker 1: the people, it will be always be the first one.
• 48:18
  Speaker 1: And nobody's ever going to replace that. Because so you
• 48:20
  Speaker 1: reminded me of that, and I hadn't a I had
• 48:23
  Speaker 1: no idea that was of all the little of all
• 48:26
  Speaker 1: the little ego things to go out and google yourself
• 48:30
  Speaker 1: or whatever. I just and by the way, I almost
• 48:34
  Speaker 1: never never write reviews of stuff. Usually it's because something
• 48:39
  Speaker 1: is this is not how it's advertised. This was advertised
• 48:43
  Speaker 1: as a twelve pack and only one showed up or
• 48:46
  Speaker 1: whatever it was. And and I was moved enough by
• 48:51
  Speaker 1: the book to write that review, and then I never
• 48:54
  Speaker 1: thought a second And I'm sure it was very helpful.
• 48:56
  Speaker 1: I mean that because when people go to that and
• 48:58
  Speaker 1: then the first thing I see is your you. It's
• 49:00
  Speaker 1: it's it's sincere. It's honest, it's sincere. So so let's
• 49:03
  Speaker 1: talk a little bit about about some of the other wizards,
• 49:07
  Speaker 1: because I think people are are genuinely interested. During the
• 49:11
  Speaker 1: broadcast portion, we didn't get to Richard Dennis. Uh. Tell
• 49:16
  Speaker 1: us a little bit about Richard Dennis. All right, Richard
• 49:19
  Speaker 1: Dennis h started out as a floor trader. Uh. He
• 49:22
  Speaker 1: started on the Mid America Exchange. Of course, we don't
• 49:25
  Speaker 1: have any floors altogether, but the midor Erica for people
• 49:28
  Speaker 1: who were unless their old time is like us. Uh.
• 49:31
  Speaker 1: Mid America's change was exchange for people small conquered mini contracts,
• 49:35
  Speaker 1: so people who couldn't afford the trade to regular grain contracts,
• 49:37
  Speaker 1: which weren't that big really, they would trade the Mid American.
• 49:40
  Speaker 1: That's what he started out. And he started out literally,
• 49:42
  Speaker 1: I think we're about the two hundred dollars and uh
• 49:44
  Speaker 1: uh you know, eventually got it up a few thousand.
• 49:46
  Speaker 1: But he that that that the little steak got multiplied
• 49:51
  Speaker 1: ultimately a couple hundred million dollars a couple hundred yeah,
• 49:55
  Speaker 1: two hundred million plus whatever I mean to two hundred
• 49:59
  Speaker 1: ye yeah, yeah yeah, Uh. It could be the greatest
• 50:03
  Speaker 1: compounded return of Yeah, there's uh, there's quite a few.
• 50:06
  Speaker 1: I mean that would certainly if you want of them,
• 50:08
  Speaker 1: for sure. Yeah. Uh. And and now Dennis ultimately went
• 50:13
  Speaker 1: on to manage money that didn't work out so well. Uh,
• 50:16
  Speaker 1: he did much better for his own money, and he
• 50:18
  Speaker 1: he started he started blew up, you know, back he
• 50:21
  Speaker 1: got stuck in the big thing that that hurt Dennis
• 50:24
  Speaker 1: was And that was also a bit of bad luck,
• 50:26
  Speaker 1: I would say, uh was the eighties seven crash. Uh.
• 50:30
  Speaker 1: And everybody thinks that the eighty seven crash. Of course,
• 50:32
  Speaker 1: it was like the the immense decline to stock market.
• 50:35
  Speaker 1: But what also happened in eight seven crash was this
• 50:37
  Speaker 1: amazing rally in in the interest rate markets and your
• 50:42
  Speaker 1: dollars which nowadays you think of your dollars, we'll trade
• 50:45
  Speaker 1: a cup, you know, they go five or ten points
• 50:47
  Speaker 1: right there, there was an overnight move of two hundred
• 50:51
  Speaker 1: and fifty points. I mean, think about that. That's like
• 50:53
  Speaker 1: in that that's per contract, you know. So uh it
• 50:58
  Speaker 1: was like a seven thousand dollar move roughly. I think
• 51:00
  Speaker 1: it was per contract, and we're talking a guy who's trading,
• 51:03
  Speaker 1: you know, thousands of contracts. Uh so, but that and
• 51:06
  Speaker 1: he couldn't do anything. It was like, oh, it was instantaneous.
• 51:08
  Speaker 1: It's just like it was the gap. You couldn't do anything.
• 51:13
  Speaker 1: So that that trade I think pretty much wipe. You
• 51:15
  Speaker 1: know that. That that killed his first advent or one
• 51:17
  Speaker 1: of it would adventures and so but he never again
• 51:21
  Speaker 1: reached that. Uh but what was he especially famous for?
• 51:24
  Speaker 1: He was a trend follower, and part of it I
• 51:27
  Speaker 1: think maybe was like he when he operated when the
• 51:30
  Speaker 1: markets were conducive to that. Now, trend following, we can
• 51:34
  Speaker 1: get into this if you want. I mean, there's a
• 51:35
  Speaker 1: reason why trend following works to some extent all the time.
• 51:40
  Speaker 1: Over time, there are elements of momentum and persistency that
• 51:44
  Speaker 1: exists in all markets because people's mood tend to not
• 51:48
  Speaker 1: flip flop from day to day. If there's an expansionary period.
• 51:51
  Speaker 1: It has a tendency that that's one. It's more it's
• 51:54
  Speaker 1: more that it's more fundamental than that is because the
• 51:56
  Speaker 1: things that really drive the big moves are things that blasts.
• 52:00
  Speaker 1: So it's it's a central bank decides to secular. So yeah,
• 52:04
  Speaker 1: they decide, well, we're gonna weekend the dollar or strengthen
• 52:06
  Speaker 1: the euro, whatever they're gonna do. Uh And they're not
• 52:09
  Speaker 1: gonna just do it for two days or two weeks
• 52:11
  Speaker 1: and these day or or there's a move to say, okay,
• 52:14
  Speaker 1: we're gonna start lowering interest rates, and usually when that
• 52:17
  Speaker 1: happens or raised interests, once that trend begins, it usually
• 52:20
  Speaker 1: goes on. So trends have a way of persisting. And
• 52:22
  Speaker 1: even if it's something like commodities or whatever, if there's
• 52:26
  Speaker 1: a shortage of metals, it takes kiars to open new
• 52:28
  Speaker 1: minds and stuff. So these trends can go on for
• 52:30
  Speaker 1: a while. Uh. So that's why it works, But it's
• 52:33
  Speaker 1: gotten much more difficult to exploit because the markets there's
• 52:36
  Speaker 1: so many people who try to do this. When we
• 52:38
  Speaker 1: were starting this early on or why should say we
• 52:41
  Speaker 1: but the trade aside, somebody Dresy interviewed you know, they
• 52:43
  Speaker 1: were the early ones doing this stuff, and they were
• 52:45
  Speaker 1: doing trend following techniques, and but now there's so many
• 52:48
  Speaker 1: people doing it that you've got a lot of a
• 52:50
  Speaker 1: lot of false breakouts, and it's much more difficult to
• 52:52
  Speaker 1: make money that way. That's that's fascinating. So not only
• 52:56
  Speaker 1: was he a big trend follower, but there's a famous
• 52:59
  Speaker 1: total story with him with the turtles. Well yeah, I mean,
• 53:02
  Speaker 1: well there's a group of traders called the Turtles, uh,
• 53:05
  Speaker 1: which where the name comes from the story is that
• 53:08
  Speaker 1: he was in Singapore and he went he saw a
• 53:11
  Speaker 1: farm where they were raising turtles as Vada turtles. By
• 53:14
  Speaker 1: the tens of that. His thought was, Gee, wouldn't be
• 53:17
  Speaker 1: being interesting if we could if I could trace traders
• 53:20
  Speaker 1: like their raising turtles. Here you trying to do with
• 53:22
  Speaker 1: which is why we're trying front seat or except we're
• 53:24
  Speaker 1: not trying to train them or anything. We're yeah, and
• 53:27
  Speaker 1: and and Dennis and another trader we talked about an intermission.
• 53:31
  Speaker 1: Neck Cart who was his partner, trained a group of
• 53:34
  Speaker 1: traders called the Turtles, and some of them went on
• 53:36
  Speaker 1: to do quite well. Uh. And so that's kind of
• 53:39
  Speaker 1: a famous story. And they put an Times and yeah,
• 53:44
  Speaker 1: or not think we actually was the Wall Street Journal, right,
• 53:46
  Speaker 1: the Wall Street Journal. They did two years, uh, and
• 53:48
  Speaker 1: they picked about twenty people each time, and they had
• 53:51
  Speaker 1: no previous way. They were not looking for training. They
• 53:53
  Speaker 1: were looking for people like game inventors, they were looking
• 53:56
  Speaker 1: for chess players, they were looking they were looking at
• 53:58
  Speaker 1: people who kind of had create to an analytical and thing.
• 54:01
  Speaker 1: But they didn't want people who actually know anything about
• 54:03
  Speaker 1: market any want they want. They don't want to be
• 54:06
  Speaker 1: sullied by the wrong approach. You know. So Renaissance Technology
• 54:09
  Speaker 1: out out in Umsa talking near Stony Brook, Jim Simon's
• 54:14
  Speaker 1: he doesn't hire Wall Street people, you know, well that
• 54:16
  Speaker 1: but that's a that's a pure that's how that's a
• 54:19
  Speaker 1: really pure deep quantitative really you know, really deep quantitative stuff.
• 54:24
  Speaker 1: So people like Simon's yeah, and and and Shore is similar,
• 54:27
  Speaker 1: you know, uh, they basically very highly quantitative approaches. So
• 54:33
  Speaker 1: so those are some of the uh, those are some
• 54:37
  Speaker 1: of the people you mentioned. Druck and Mill. We talked
• 54:38
  Speaker 1: about Marty Schwartz and any Trader in particular. You think, uh,
• 54:43
  Speaker 1: we're worth mentioning that. Yeah, the one trader we didn't
• 54:46
  Speaker 1: talk about who I I just think is a phenomenal,
• 54:49
  Speaker 1: phenomenal individual is and and probably in in some ways,
• 54:53
  Speaker 1: of all the great people that I interviewed, is probably
• 54:55
  Speaker 1: the most amazing. And that would be that would be
• 54:58
  Speaker 1: Ed Thorpe. Sure be Eat the Dealer, his first book,
• 55:01
  Speaker 1: and then beat the market, Beat the markets. Right, he
• 55:04
  Speaker 1: was out in Stanford or yeah, yeah, he's out in
• 55:07
  Speaker 1: California around. He's still around. He's now when I interviewed him,
• 55:11
  Speaker 1: he think he was like interviewed two thousand and twelve.
• 55:14
  Speaker 1: I think he was seventy eight or so or seventy nine,
• 55:18
  Speaker 1: so he's low low eighties. Now this is you know,
• 55:21
  Speaker 1: he's a just he's a mathematician, PhD mathematician. He actually
• 55:26
  Speaker 1: the way he became a PhD athetician, which tells you
• 55:29
  Speaker 1: a lot about the man, is he was doing his PhD.
• 55:31
  Speaker 1: And this is a kid who grew up in the
• 55:33
  Speaker 1: Depression um in a poor school district, very bad education
• 55:37
  Speaker 1: toward himself physics at at a young age, got you know,
• 55:41
  Speaker 1: got accepted into uh, you know, top universities in California,
• 55:45
  Speaker 1: and was getting his PhD, was working on his thesis
• 55:47
  Speaker 1: and PhD in physics. Decided he didn't he decided he
• 55:50
  Speaker 1: didn't have enough math knowledge, started the order thing courses
• 55:54
  Speaker 1: in the graduate math courses, ended up with the PhD.
• 55:56
  Speaker 1: Math never rots thesis, so he you know, in in physics,
• 56:00
  Speaker 1: technically speaking, he's not a PhD in physics. They never
• 56:02
  Speaker 1: bore writing the but some some stuff he did. He
• 56:05
  Speaker 1: actually and he has this amazing track record. Uh his
• 56:08
  Speaker 1: first fund nineteen years, um, nineteen years, he only had
• 56:13
  Speaker 1: uh like two or three losing months in all those
• 56:16
  Speaker 1: nineteen years one percent losses. The largest loss ninete cent compounded.
• 56:21
  Speaker 1: But that's the that's that's that's a track record. He
• 56:24
  Speaker 1: also did stuff like the reason he did so well.
• 56:27
  Speaker 1: He he came up with the Black a mathematical equivalent
• 56:31
  Speaker 1: formulation of the Black Shows model about five years before then,
• 56:35
  Speaker 1: famous paper that want the nob prize. And he didn't
• 56:38
  Speaker 1: publish it because why I asked him, why he was
• 56:40
  Speaker 1: too busy. Yeah, think of it for five years. He's
• 56:43
  Speaker 1: he may be the world the only person in world
• 56:45
  Speaker 1: who knows how the price options correctly at and and
• 56:48
  Speaker 1: and that's what he made it. And he he was.
• 56:52
  Speaker 1: He had the first the first war you know type
• 56:55
  Speaker 1: option fund. He had the first convertible bond fund. He
• 56:57
  Speaker 1: had the first statop fund. He came up with all
• 57:00
  Speaker 1: of these things on his own. He and when he
• 57:02
  Speaker 1: was before his trading career, then he was doing stuff
• 57:04
  Speaker 1: like UH. He was the first person to h with
• 57:07
  Speaker 1: with UH. With an MT Professor Shannon, who was the
• 57:11
  Speaker 1: father farther information theory, they did the first miniature computer.
• 57:14
  Speaker 1: This is back in the sixties when god, you know,
• 57:17
  Speaker 1: we had we had IBM IBM mainframes as large as
• 57:20
  Speaker 1: the room to do simple calculations. They created their own
• 57:23
  Speaker 1: own mini ministure computer and did the studies to use
• 57:27
  Speaker 1: Newtonian physics to beat Roulette wheel, just to show that
• 57:30
  Speaker 1: it could be done. And they got like a forty
• 57:32
  Speaker 1: four percent edge on the Roulette um. And and so
• 57:35
  Speaker 1: he did all these amazing things. That's fascinating. Why do
• 57:38
  Speaker 1: you say he's the most interesting character. Well, because he
• 57:41
  Speaker 1: has all that those elements. You know, he figured out
• 57:43
  Speaker 1: how to beat you know, the casinos at their own game.
• 57:46
  Speaker 1: They changed. In fact, they had meetings about what to
• 57:49
  Speaker 1: do about Thorpe, you know about this man, professor. Yeah,
• 57:51
  Speaker 1: and and there's a story and they were they thinking
• 57:54
  Speaker 1: about banning him from the worst band. Let's put it
• 57:57
  Speaker 1: this way. One of those stories in hedge fund markt
• 57:58
  Speaker 1: Wizards tell us about and this is like out of
• 58:01
  Speaker 1: a movie with his brakes not working, you know, going
• 58:05
  Speaker 1: downhead car on the car and just throwing the corn
• 58:08
  Speaker 1: reverse and and finding out that the car has been
• 58:11
  Speaker 1: you know, tampered with, you know really Yeah, yeah, so
• 58:14
  Speaker 1: we had the vegas. We had so But anyway, So
• 58:18
  Speaker 1: had that side of his life and then he did
• 58:19
  Speaker 1: all these He was the creator of so many catch
• 58:22
  Speaker 1: fund strategy He's the first guy to do it. Um
• 58:25
  Speaker 1: and uh uh and there all sorts. The thing that
• 58:28
  Speaker 1: I can't even think he was a made off. He
• 58:30
  Speaker 1: he kind of he he knew made off. He figured
• 58:33
  Speaker 1: out what made off was up to like a dozen
• 58:36
  Speaker 1: years before. Uh. And he had he investors because investor,
• 58:40
  Speaker 1: one of his investors said hey, what do you think
• 58:41
  Speaker 1: of this? He said, give me the trades. And he
• 58:43
  Speaker 1: he's a mathematician. He he gave mateen reasons why it
• 58:48
  Speaker 1: was why he was out. That's fascinating. It's a shame
• 58:52
  Speaker 1: he didn't go public with that. Yeah, I think he
• 58:54
  Speaker 1: I think I think I might have discussed that in
• 58:57
  Speaker 1: the book. And there were reasons why. You know, he
• 58:58
  Speaker 1: just felt that you know he couldn't get and of
• 59:01
  Speaker 1: course that you know, Actually, uh, I should know the
• 59:05
  Speaker 1: name the fellow went public um uh mark uh Greek
• 59:09
  Speaker 1: name uh Marcot pop Harry, Marco, Marco Polos, Marco Polos, right, Uh,
• 59:15
  Speaker 1: I mean he wrote this great paper which beautifully beautiful analysis,
• 59:21
  Speaker 1: and they ignored it. I thought from Marco Polos's paper
• 59:25
  Speaker 1: the most compelling thing was if he's doing this by
• 59:28
  Speaker 1: right strategy, there aren't enough options in the world that
• 59:32
  Speaker 1: this isn't complicated. He's got to be like he's doing
• 59:36
  Speaker 1: trades and markets that had no volume on that day,
• 59:38
  Speaker 1: and he's doing what he's doing tens of thousillions of
• 59:40
  Speaker 1: dollars right, and tens of thousands of trades and a
• 59:43
  Speaker 1: market that didn't even have any option trades. It's it's hindsight.
• 59:46
  Speaker 1: Bias is always present. But that was foresight of market
• 59:50
  Speaker 1: Polosis party he was. It was foresight that that's quite
• 59:54
  Speaker 1: that's quite fascinating. So let's talk a little bit about
• 59:57
  Speaker 1: technical Since you've written a book about trend following and
• 1:00:01
  Speaker 1: market trading in futures, I shouldn't really call it trend following. Yeah,
• 1:00:04
  Speaker 1: it's not yet. It's really more technically answered. The book
• 1:00:08
  Speaker 1: that got me into this whole thing writing was was
• 1:00:11
  Speaker 1: was an analygical book called Complete Guide to the Futures Market,
• 1:00:15
  Speaker 1: which was the catalyst for the Market Wizard books. Because
• 1:00:18
  Speaker 1: that book, I told you had the idea of years before.
• 1:00:21
  Speaker 1: That book did well for an analytical book. I had
• 1:00:22
  Speaker 1: some publishers say, hey, why don't you do want you
• 1:00:24
  Speaker 1: to do a whole bunch of analygal books. I said, no,
• 1:00:26
  Speaker 1: thank you, I've done that once. It was a lot
• 1:00:27
  Speaker 1: of work, and so I did the Market Wizards. But
• 1:00:30
  Speaker 1: that book is now getting redone. I have a co
• 1:00:32
  Speaker 1: Aufered Markets going and doing a great job, doing great
• 1:00:35
  Speaker 1: legwork getting it updated. And UH so that the updated
• 1:00:39
  Speaker 1: version the new the new version of the Complete Guide
• 1:00:42
  Speaker 1: of the Market. Uh, Complete Guide to the Futures of markets,
• 1:00:45
  Speaker 1: like guid the Future market is fundamentals, technical options, etcetera, etcetera, etcetera. Trading.
• 1:00:49
  Speaker 1: Uh that comes out this fall sometimes that's that's interesting.
• 1:00:53
  Speaker 1: So so how did you find your way to technicals?
• 1:00:56
  Speaker 1: What made you like? Ah? Yeah, so I said, you're
• 1:00:59
  Speaker 1: looking at somebody who started out as a fundamental analysts.
• 1:01:02
  Speaker 1: I hear this on a regular basis, starts out as
• 1:01:06
  Speaker 1: a c f A or or a macro economist. And
• 1:01:09
  Speaker 1: then because I come, you know, I come from an
• 1:01:11
  Speaker 1: account what's my education, I'm I'm I've got a degree
• 1:01:15
  Speaker 1: in economic so so, uh, you know you're to be
• 1:01:18
  Speaker 1: inclined to look for a statistical analysts, you know, that
• 1:01:21
  Speaker 1: type of analysis approach. Um. But I found that the
• 1:01:25
  Speaker 1: fundamental analysis was very poorly attuned to trading, because fundamentals
• 1:01:29
  Speaker 1: don't give you timing, uh, And it's worse than Actually,
• 1:01:33
  Speaker 1: I say, the only way that fundamentals are useful for
• 1:01:37
  Speaker 1: timing is in a contrarian way. So in other words,
• 1:01:40
  Speaker 1: if you have something that's supposed to be bullish for
• 1:01:42
  Speaker 1: the market and it doesn't cause the market to go
• 1:01:45
  Speaker 1: up much or as much as you think, or cause
• 1:01:47
  Speaker 1: the market goes down, that might be very useful bearish information,
• 1:01:50
  Speaker 1: but used as the way it's intended, fundamentals do not
• 1:01:54
  Speaker 1: work for timing because they're just too broad, much too broad.
• 1:01:57
  Speaker 1: Ralph Acampora, I think had the greatest explanation on the
• 1:02:02
  Speaker 1: tension between fundamentals and technicals. I actually have a quote
• 1:02:06
  Speaker 1: of his Fundamentals tell you what to buy, technicals tell
• 1:02:10
  Speaker 1: you when. Yeah, that's a good way to do it
• 1:02:12
  Speaker 1: and you could use fundamentals of that you can't say
• 1:02:13
  Speaker 1: you can say well yeah, and if you're a good
• 1:02:16
  Speaker 1: fundamental analyst, you can get say well this market should
• 1:02:19
  Speaker 1: go up over time. I wanted to look for only
• 1:02:21
  Speaker 1: by trade. That's that's a that's a good use of fundamentals.
• 1:02:25
  Speaker 1: And the way I got into technicals because I was
• 1:02:26
  Speaker 1: a research director and uh, one of my analysts was
• 1:02:29
  Speaker 1: a technical anals. So I didn't do anything, but I
• 1:02:32
  Speaker 1: noticed that of all the analysts, he was the only
• 1:02:34
  Speaker 1: one who was doing well, right, And so I didn't
• 1:02:38
  Speaker 1: want I like to think I was a little bit
• 1:02:40
  Speaker 1: open minded. So I said, Steve, you tell me what
• 1:02:42
  Speaker 1: you do and he started, you know and Steve who
• 1:02:45
  Speaker 1: which okay, So I showed that absolutely Steve Kronowits And
• 1:02:48
  Speaker 1: unfortunately Steve Proms was I know, he was a very
• 1:02:51
  Speaker 1: close friend and he unfortunately died just a couple of
• 1:02:54
  Speaker 1: months ago. So I was, you know, probably the big
• 1:02:56
  Speaker 1: the worst loss I had as a friend in my life. Yeah, yeah,
• 1:03:00
  Speaker 1: just like he was a great person. Um, but Steve
• 1:03:03
  Speaker 1: was the one who talked me techno analysis. When when
• 1:03:05
  Speaker 1: you said tell me what you do, how does he
• 1:03:08
  Speaker 1: So he said you know, well, he made me understand
• 1:03:11
  Speaker 1: why these things work. You know, so I came in
• 1:03:13
  Speaker 1: with the well, this is the pocket of stuff work,
• 1:03:15
  Speaker 1: and they appreciate that it works because it reflects everything
• 1:03:18
  Speaker 1: going to market. It's reflecting the psychology of what you're seeing.
• 1:03:21
  Speaker 1: You're seeing fundamentals in the charts. It's just you're seeing
• 1:03:24
  Speaker 1: him through the price action. And that's what the people
• 1:03:26
  Speaker 1: don't understand that. People say, oh, it's a bunch of
• 1:03:29
  Speaker 1: mambo jumbo and all that. Well, no, because anything that's fundamental,
• 1:03:33
  Speaker 1: people who were moving the markets for fundamentals, you they
• 1:03:36
  Speaker 1: can't hide what they're doing. It shows up in the supply,
• 1:03:39
  Speaker 1: it shows up in the price. So so that leads
• 1:03:41
  Speaker 1: to a question I had written down to ask you,
• 1:03:43
  Speaker 1: what do you think people misunderstand about technicals? That that
• 1:03:48
  Speaker 1: that's that's the key thing, that that the technicals aren't
• 1:03:50
  Speaker 1: some mysterious thing. They are the reflection of all the
• 1:03:53
  Speaker 1: participants in the market. So they do reflect fundamentals. Another thing,
• 1:03:57
  Speaker 1: and this is one of the main one of the
• 1:03:58
  Speaker 1: main things, like my complete guard the futures market, one
• 1:04:01
  Speaker 1: of my main points is you don't when you and
• 1:04:04
  Speaker 1: I go through lots of charged analysis, techno analysis all
• 1:04:06
  Speaker 1: that I say, it's not so much interpreting when these
• 1:04:10
  Speaker 1: patterns and it's a lot of subjectivity. What's even more
• 1:04:13
  Speaker 1: important is when things that should work one way based
• 1:04:16
  Speaker 1: upon the techno analysis don't work. So what I call
• 1:04:20
  Speaker 1: a sort of a failed signal is more important than
• 1:04:22
  Speaker 1: than a classical signal tells you something is happened. So
• 1:04:25
  Speaker 1: if you get a you get a market. Hey, this
• 1:04:28
  Speaker 1: is actually my favorite example is this is really terrible
• 1:04:32
  Speaker 1: news and and the stock actually rallied on. That's right,
• 1:04:35
  Speaker 1: that's that's the type of thing. And but I'll give
• 1:04:37
  Speaker 1: you like one example that the personally, Uh, it was
• 1:04:40
  Speaker 1: a week or two ago. It was along the bonds
• 1:04:43
  Speaker 1: of the market was going up, and then one morning
• 1:04:45
  Speaker 1: gaps into highs. I'm I'm doing great, right, and it's
• 1:04:49
  Speaker 1: sort of and then during the day just goes down
• 1:04:51
  Speaker 1: and starts going down and down and down and down,
• 1:04:54
  Speaker 1: and I say, hey, that is just not the right
• 1:04:56
  Speaker 1: type of action. And I had stops in so if
• 1:04:57
  Speaker 1: it got close to unchanged, I'd be out. I got out.
• 1:05:00
  Speaker 1: And yeah, now with Brexit is going back up again,
• 1:05:02
  Speaker 1: but it had a good size reaction, and that's that's
• 1:05:05
  Speaker 1: a good example of you had a gap breakout, it
• 1:05:07
  Speaker 1: should have been strong, and it failed. It came back
• 1:05:10
  Speaker 1: into you know, so that's again so to me, that's
• 1:05:13
  Speaker 1: a that's a much better signal than the breakout. So
• 1:05:17
  Speaker 1: today we're sitting in this room with one to three, four,
• 1:05:20
  Speaker 1: five like ten monitors and you know, five computers hooked
• 1:05:25
  Speaker 1: up to a network of industrial military grade computing technology.
• 1:05:31
  Speaker 1: What has all of this computing horsepower and and all
• 1:05:37
  Speaker 1: of this charting software done to the world of technicals?
• 1:05:41
  Speaker 1: And I say that with with the admission that I
• 1:05:46
  Speaker 1: came up with guys who would do charts by hands
• 1:05:49
  Speaker 1: every night. And and the traders there, traders who are
• 1:05:52
  Speaker 1: interviewed who still in system. You know, it's a little
• 1:05:54
  Speaker 1: insistem to or met you know, that was a little
• 1:05:56
  Speaker 1: system doing it by hand. Uh. And as far as
• 1:05:58
  Speaker 1: I go for exam call, I don't use any of
• 1:06:01
  Speaker 1: the indicatorsn't I just look at charts. I mean, I'm
• 1:06:04
  Speaker 1: more comfortable of that. And my attitude is I think
• 1:06:07
  Speaker 1: all these indicators are just vivetives or price anyway. Yeah,
• 1:06:10
  Speaker 1: so and my eneving averages and oscillators and all the Yeah,
• 1:06:15
  Speaker 1: they're just they're just formulations of price, so you're really
• 1:06:17
  Speaker 1: not getting anything more and price, you're just getting it
• 1:06:19
  Speaker 1: in a different type of picture. And my analogy for
• 1:06:22
  Speaker 1: that is it's, you know, you take something like sunglasses,
• 1:06:25
  Speaker 1: and some people are like an amber collar better. So
• 1:06:27
  Speaker 1: I'm like, you know, bluish callar better. You know, it's
• 1:06:29
  Speaker 1: a personal taste. And and some people who work one
• 1:06:32
  Speaker 1: call it work better. For some people who one call
• 1:06:33
  Speaker 1: it work better. For other people, it's amount of personal taste.
• 1:06:36
  Speaker 1: So in my case, I just like the plain charts,
• 1:06:38
  Speaker 1: plain vanilla clear. But but not you're not an Elliott
• 1:06:41
  Speaker 1: wave guy, You're not a demark. I'm not out of again,
• 1:06:45
  Speaker 1: an analyst or Fibonacci or my approach, and again I'm
• 1:06:48
  Speaker 1: not a great trader, but my approach basically is just
• 1:06:51
  Speaker 1: look at the charts for an opinion. Could be trend,
• 1:06:54
  Speaker 1: could be trend following type, trade, could be counter trend.
• 1:06:57
  Speaker 1: But evil way, it's got some sort of reasonable of
• 1:06:59
  Speaker 1: the charts while I'm looking at it that way, And
• 1:07:02
  Speaker 1: in every case, I'm putting in a stop along with
• 1:07:05
  Speaker 1: the entry. So so does all let me ask you
• 1:07:08
  Speaker 1: a slightly different questions, does all this charting software that's
• 1:07:11
  Speaker 1: out there. Uh so anyone could have access to an
• 1:07:15
  Speaker 1: immense amount of technical analysis that really wasn't all that
• 1:07:20
  Speaker 1: available when I was starting. What has that done to
• 1:07:23
  Speaker 1: the world of trading? If anything? I don't know. Yeah.
• 1:07:26
  Speaker 1: I think for some people they learned to use some
• 1:07:30
  Speaker 1: of those indicators in certain ways that work for them,
• 1:07:32
  Speaker 1: and so it gives them there's like it's much more variety.
• 1:07:34
  Speaker 1: And then so far as people need to find a
• 1:07:36
  Speaker 1: way that works for them, it makes it possible. Just
• 1:07:39
  Speaker 1: multiplies tremendously the amount of ways people can trade the markets.
• 1:07:42
  Speaker 1: So I guess in that way it's probably useful. But
• 1:07:45
  Speaker 1: no matter back then and now there's only gonna be all,
• 1:07:48
  Speaker 1: you know, smaller number of people that will excel in
• 1:07:50
  Speaker 1: the markets. Alright, so I know I only have you
• 1:07:53
  Speaker 1: for a few minutes longer. Let me get to my
• 1:07:57
  Speaker 1: list of favorite questions and start plowing into this. Let's
• 1:08:01
  Speaker 1: let's jump right in with the mentors. So you mentioned
• 1:08:05
  Speaker 1: my mentors. Yeah, so the one mentor I really have
• 1:08:09
  Speaker 1: one mentor, and that mentor would be would be Steve
• 1:08:11
  Speaker 1: Chronowitz because he's he's a fellow. Taught me classical chart
• 1:08:14
  Speaker 1: analysis and uh yeah, and I didn't read actually never
• 1:08:18
  Speaker 1: even read and I never I had to ment this.
• 1:08:20
  Speaker 1: I never read the classical charge books and everything else
• 1:08:22
  Speaker 1: McGee and yeah, which was not. I just ended up
• 1:08:25
  Speaker 1: not because I learned. I learned the basic things from
• 1:08:29
  Speaker 1: from Steve and then from probably markets. I fund everybody,
• 1:08:31
  Speaker 1: if you look at charts, you get your own biases
• 1:08:34
  Speaker 1: certain things. And uh, I I'll mention another fellow who's
• 1:08:37
  Speaker 1: a close friend, Peter Brandt. And not that he's a friend,
• 1:08:42
  Speaker 1: although Pete is well known on Twitter and traders who
• 1:08:46
  Speaker 1: follow him. Yeah, so uh not that not that I
• 1:08:49
  Speaker 1: meant to say, not that he's a mentor um because
• 1:08:53
  Speaker 1: but but he is. He and I are very similar
• 1:08:56
  Speaker 1: in the type of approach. I mean we may not
• 1:08:58
  Speaker 1: look at the child and get the same opinion sometimes yes,
• 1:09:00
  Speaker 1: sometimes No, that's not what we're similar. But it's the
• 1:09:03
  Speaker 1: same type of thought that you know you're only gonna
• 1:09:05
  Speaker 1: win a certain sentences your time. You always know your
• 1:09:07
  Speaker 1: risk point is much more important. To keep your losses
• 1:09:10
  Speaker 1: controlled and uh, and be unemotional and just use just
• 1:09:14
  Speaker 1: use the information. Don't try to make the markets work,
• 1:09:17
  Speaker 1: you know, do what you wanted to do. Just follow
• 1:09:19
  Speaker 1: what the markets are telling you and it's a lot
• 1:09:21
  Speaker 1: of similar philosophy, so not not necessarily a mentor question,
• 1:09:27
  Speaker 1: but what other of all the traders and investors we mentioned,
• 1:09:30
  Speaker 1: who who influenced you philosophically? It sounds like Brandon you
• 1:09:36
  Speaker 1: are very sympatico. But in the formative days. But yeah,
• 1:09:39
  Speaker 1: in the formative days. Um well, I I would say,
• 1:09:42
  Speaker 1: of all, there are a number of people who made
• 1:09:44
  Speaker 1: the same point. But as a line that sticks in
• 1:09:46
  Speaker 1: my mind, U maybe the single most important sentence that
• 1:09:50
  Speaker 1: anybody uttered, you know, okay, that that's a that's something
• 1:09:54
  Speaker 1: to get people right right is Bruce Covernor's line is
• 1:09:58
  Speaker 1: always know where you're gonna get out before you get in.
• 1:10:01
  Speaker 1: You know, I started on a desk with the head
• 1:10:04
  Speaker 1: of the desk was a marine jungle combat instructor. This
• 1:10:09
  Speaker 1: is a big, badass guy, and you know, he had
• 1:10:13
  Speaker 1: the same exact line, but he would always couch it
• 1:10:16
  Speaker 1: in marine terms. He said, before you take you're gonna
• 1:10:20
  Speaker 1: take a village, You're gonna take a house, You're gonna
• 1:10:22
  Speaker 1: take a hell. You have to know we're getting in,
• 1:10:25
  Speaker 1: we're getting out, but we have to know what's our exit,
• 1:10:28
  Speaker 1: and if that exit is blocked, what's our plan B
• 1:10:30
  Speaker 1: and what's our plans? Say you always have if you
• 1:10:32
  Speaker 1: want to get out alive, you have to know what
• 1:10:35
  Speaker 1: your exit strategy is and what the alternatives are if
• 1:10:38
  Speaker 1: something MUCKs up that person. And that sounds very much
• 1:10:42
  Speaker 1: like what what Coke said, only only that's got a
• 1:10:46
  Speaker 1: little more mud and and and teeth in it. Well,
• 1:10:48
  Speaker 1: the one thing I would add to that is also
• 1:10:50
  Speaker 1: that the key about it is that what he's really
• 1:10:54
  Speaker 1: saying there is dude, before you get in, because that's
• 1:10:56
  Speaker 1: when used to have objectivity. You're your objective kind of
• 1:10:59
  Speaker 1: motion it. Don't do it, don't have bullets or your
• 1:11:01
  Speaker 1: analogy works. Don't do it in the heat of combat
• 1:11:04
  Speaker 1: when you're playing. That's exactly right that that's my analogy
• 1:11:08
  Speaker 1: is you know that that card in the seat back
• 1:11:11
  Speaker 1: in front of you, Well you're on the ground. That's
• 1:11:13
  Speaker 1: when you want to read it and see where where
• 1:11:15
  Speaker 1: the right, where the exits, where's the flotation devices? Not
• 1:11:20
  Speaker 1: oh look the wing is on fire, which was on
• 1:11:23
  Speaker 1: the news today at thirty feet probably not the time
• 1:11:26
  Speaker 1: where you're gonna have the presence of mind to learn
• 1:11:29
  Speaker 1: anything from that. So so let's talk a little bit
• 1:11:31
  Speaker 1: about books. We've been talking about your books? What other
• 1:11:35
  Speaker 1: books have you read fiction, nonfiction, investing, not what other
• 1:11:39
  Speaker 1: books have you found to be Hey, people should read this? Okay, well,
• 1:11:43
  Speaker 1: I I'd recommend as as authors um for for if no,
• 1:11:47
  Speaker 1: even for entertaining purposes. You know, anything Michael Lewis has
• 1:11:50
  Speaker 1: written is just I think Michael is one of great
• 1:11:53
  Speaker 1: authors of all time. I mean just surmendously entertaining any
• 1:11:56
  Speaker 1: but also a brilliant talent. You take a book like
• 1:11:59
  Speaker 1: The Big Ord, and I gonna appreciate this because I
• 1:12:01
  Speaker 1: wrote an ente for the market Wizards, I had to
• 1:12:03
  Speaker 1: cover some of the same territory. Uh To take the
• 1:12:05
  Speaker 1: complexity what went on there and to make it entertaining
• 1:12:08
  Speaker 1: and understandable is a talent. Uh So anything he consistently
• 1:12:13
  Speaker 1: finds these angles to to bring and these personalities to
• 1:12:17
  Speaker 1: tell the story just just wonderful. I will admit I
• 1:12:22
  Speaker 1: have never read one of his books. I've read all
• 1:12:25
  Speaker 1: of his books except one. It's eat Way to Say It.
• 1:12:27
  Speaker 1: And I'm saving The blind Side from my next vacation
• 1:12:31
  Speaker 1: because I always read his books and I will plas
• 1:12:34
  Speaker 1: him in a day, The Big Short a day, Flashboys
• 1:12:38
  Speaker 1: a day, money Ball a day, You sit on the beach,
• 1:12:42
  Speaker 1: it's like, wow, yeah it was. It's it's it's it's entertaining,
• 1:12:44
  Speaker 1: you learn stuff, it's insightful, it's creative. Yeah. So uh
• 1:12:49
  Speaker 1: another offer I would put you know, very high up
• 1:12:52
  Speaker 1: and and who influence I think will stay for a
• 1:12:55
  Speaker 1: long time does not seem to tell that. Uh So,
• 1:12:59
  Speaker 1: I guess Xwan is probably the most famous book. Personally
• 1:13:02
  Speaker 1: by randomness is more famous and more useful, well, personally
• 1:13:07
  Speaker 1: fooled by randomness and and tally would not agree with me.
• 1:13:10
  Speaker 1: But but because I think he thinks block Swan is
• 1:13:12
  Speaker 1: his best book, I think I'm not sure, but I
• 1:13:15
  Speaker 1: I think Fooled by Randomness he is not, just because
• 1:13:18
  Speaker 1: it was the first of those type of books, but
• 1:13:20
  Speaker 1: it really got all the key lessons and it's it's
• 1:13:23
  Speaker 1: so much captured how a lot of what people think
• 1:13:26
  Speaker 1: is skill is really luck and and confused two and
• 1:13:29
  Speaker 1: and also not appreciate the fact that there are the
• 1:13:34
  Speaker 1: tail nature of events in the markets as uh, and
• 1:13:38
  Speaker 1: that and and so all those themes really come out
• 1:13:40
  Speaker 1: very well. It's a shame that he's not going to
• 1:13:42
  Speaker 1: hear this interview because I tweeted, I retweeted something somebody
• 1:13:47
  Speaker 1: else had written and he was so angry at that
• 1:13:50
  Speaker 1: person that he not only did he block them on Twitter,
• 1:13:54
  Speaker 1: but he blocked me. Oh, I know it was. It
• 1:13:56
  Speaker 1: was Noah Smith, who writes for Who's and let me go?
• 1:14:01
  Speaker 1: So let me give Aroduce here. Noah Smith, who's a blogger, economist, blogger,
• 1:14:06
  Speaker 1: and tollaly By. Noah hates him. But Noah Smith is
• 1:14:10
  Speaker 1: for a guy who writes short, succinct articles on on
• 1:14:14
  Speaker 1: economics that are pertinent. They're they're just extremely well explained.
• 1:14:20
  Speaker 1: He's not He's not a liberal. He's not a conservative.
• 1:14:23
  Speaker 1: He's That's why I love about Let me let me
• 1:14:26
  Speaker 1: share a little inside baseball with you about Noah Smith.
• 1:14:29
  Speaker 1: So I'm the guy who brought Noah Smith to Bloomberg View.
• 1:14:32
  Speaker 1: How how do I know Noah Smith? So he comes.
• 1:14:35
  Speaker 1: Listen to his background. It's really fascinating. I think he
• 1:14:38
  Speaker 1: comes out of Berkeley with a degree in physics. Then
• 1:14:41
  Speaker 1: he goes to Michigan University of Michigan to to get
• 1:14:45
  Speaker 1: his PhD in economics. Then he's teaching at my alma
• 1:14:49
  Speaker 1: matera State University of New York at Stony Brook in
• 1:14:52
  Speaker 1: the economics department I've spoken to his class a couple
• 1:14:54
  Speaker 1: of times, and when Bloomberg View was coming together. Um
• 1:15:00
  Speaker 1: I every now and then would say, Hey, are you
• 1:15:02
  Speaker 1: looking for a guy to cover this or that? Yes,
• 1:15:05
  Speaker 1: send the name. So a number of people I referred
• 1:15:08
  Speaker 1: them to ultimately became writers here. I always loved for
• 1:15:13
  Speaker 1: the same reasons that you do Noah Smith's work. He's
• 1:15:16
  Speaker 1: a fascinating guy. Then add to that just absolutely brilliant,
• 1:15:21
  Speaker 1: smart as a whip. Add to that, PSC speaks fluent
• 1:15:25
  Speaker 1: Japanese and spends summers in Japan every year for the
• 1:15:28
  Speaker 1: past decade. This is really an interesting, unusual talk about
• 1:15:33
  Speaker 1: eclectic physics, economics Japanese. But he right, and he writes
• 1:15:38
  Speaker 1: very clearly, very very understandable, takes really complex issues and
• 1:15:43
  Speaker 1: makes it really accessible. From what I followed with him
• 1:15:47
  Speaker 1: and Teleb, he used the concept of a black swan,
• 1:15:52
  Speaker 1: apparently in a way that Teleb was not happy about. Now,
• 1:15:56
  Speaker 1: last I checked, TELEB doesn't have the trademark on a
• 1:15:59
  Speaker 1: black swan, meaning we were expecting this and we got
• 1:16:02
  Speaker 1: something else. Oh and by the way, it was a
• 1:16:04
  Speaker 1: tail event. It was a low probability but significant outcome event.
• 1:16:10
  Speaker 1: I think the two of them use the phrase slightly differently.
• 1:16:15
  Speaker 1: And look, I have no beef with with to Leb,
• 1:16:17
  Speaker 1: and I love Noah Smith's work. He went so postal
• 1:16:20
  Speaker 1: at him. To Leb went so postal at Smith for
• 1:16:24
  Speaker 1: for writing this. He was so angry at me merely
• 1:16:27
  Speaker 1: for retweeting it. He goes, I just can't continent you
• 1:16:32
  Speaker 1: you retweeting this, and I have to block you so
• 1:16:34
  Speaker 1: and we should tell people for Noah Smith. His his
• 1:16:37
  Speaker 1: blog is called no No No opinion, with the word
• 1:16:41
  Speaker 1: Noah an opinion to combine sort of a uh, I
• 1:16:44
  Speaker 1: forgot the word of what what what that's called? When
• 1:16:47
  Speaker 1: you when you combine? Uh, it's on the tip of
• 1:16:49
  Speaker 1: my tongue. Um. I I don't have an issue with Teleb,
• 1:16:53
  Speaker 1: but I find his his work to be fascinating. I
• 1:16:57
  Speaker 1: don't think he what he does on Twitter is a
• 1:17:00
  Speaker 1: good look, crushing it, you know, getting into fights with
• 1:17:04
  Speaker 1: people at the time. But I understand it. Listen, we
• 1:17:07
  Speaker 1: all have a certain amount of road rage that doesn't
• 1:17:11
  Speaker 1: suffer that doesn't suffer fools, but exactly exactly. But I
• 1:17:17
  Speaker 1: think sometimes maybe he may confuse you know, uh, who
• 1:17:22
  Speaker 1: the fools are? You know? So yeah, no, that that's
• 1:17:24
  Speaker 1: exactly listen if when over the weekend following Brexit, I
• 1:17:30
  Speaker 1: saw a data point that said, um, you know, you
• 1:17:34
  Speaker 1: look at how the older folks voted, they voted overwhelmingly
• 1:17:38
  Speaker 1: to leave. And you look at how the younger folks vote,
• 1:17:41
  Speaker 1: and they voted overwhelming in these stay And I saw
• 1:17:44
  Speaker 1: I tweeted this data point out that had come from
• 1:17:47
  Speaker 1: one of the UK papers, and and someone tweeted tweeted
• 1:17:53
  Speaker 1: the line with there's a British soldier saluting in a
• 1:17:58
  Speaker 1: in a huge cemetery and they tweeted, yeah, what did
• 1:18:02
  Speaker 1: the old folks ever do for the UK? And I
• 1:18:05
  Speaker 1: had to call the guy out. I'm like, well, if
• 1:18:07
  Speaker 1: you're eighty and you voted for Brexit, that's fantastic. You
• 1:18:10
  Speaker 1: were three years old when World War two started, so
• 1:18:13
  Speaker 1: please do some basic math and stop lying about this.
• 1:18:19
  Speaker 1: You already won, but you don't have to. You could
• 1:18:21
  Speaker 1: stop lying now that you won. You don't have to.
• 1:18:24
  Speaker 1: And I just I felt myself wanting to go full
• 1:18:27
  Speaker 1: talent the guy. But there's a difference between calling out
• 1:18:32
  Speaker 1: someone who's intellectually dusanest someone who's a liar not suffering
• 1:18:36
  Speaker 1: fools glad, And I was very surprised when I saw
• 1:18:38
  Speaker 1: there was some you know, comments that he was inking.
• 1:18:40
  Speaker 1: I didn't really read the whole thing, not see him
• 1:18:41
  Speaker 1: come back on BlackBerry and and no, we we miss you,
• 1:18:45
  Speaker 1: we love you, and and be less of a By
• 1:18:47
  Speaker 1: the way, he's another guy that I would love to
• 1:18:49
  Speaker 1: have on the show, but I'm afraid he'll just chew
• 1:18:52
  Speaker 1: the furniture. He's you know, I've met him, I've had
• 1:18:55
  Speaker 1: lunch with him. I think he's an interesting guy. He's
• 1:18:57
  Speaker 1: certainly smart enough. I maybe it's a generational thing. I
• 1:19:02
  Speaker 1: got enough of a foot in the under fifty, asked him.
• 1:19:07
  Speaker 1: I'd ask him on Twitter, but I'm but I'm blocked.
• 1:19:09
  Speaker 1: But all right, let's let's not um have this. Let's
• 1:19:13
  Speaker 1: let's go back to what other books besides Michael Lewis
• 1:19:17
  Speaker 1: and Not seemed to like. Okay, what are the books
• 1:19:18
  Speaker 1: do you find? Well? I mentioned Reminiscence of the Stock Operators,
• 1:19:22
  Speaker 1: Beat the Deal or Beat the Market, and then my,
• 1:19:25
  Speaker 1: uh yeah, my favorite book, my personal favorite book of
• 1:19:28
  Speaker 1: all time. One of the only books I've read several
• 1:19:31
  Speaker 1: times is a book called Endurance about Shock Shackleton's uh
• 1:19:35
  Speaker 1: endurance Endurance, So it was original book there has been
• 1:19:38
  Speaker 1: several books about Shackleton that the Anton. Now, yeah, there's
• 1:19:43
  Speaker 1: a movies and stuff I think well have been. Uh,
• 1:19:45
  Speaker 1: but that first book, I think it was by Lansing,
• 1:19:49
  Speaker 1: which was written if I remember I remember, I think
• 1:19:51
  Speaker 1: it was written fifty five. But it is the most
• 1:19:54
  Speaker 1: compelling story. Uh. It is just just so tell quickly
• 1:19:58
  Speaker 1: tell the shaff So the shack the story an antontic
• 1:20:01
  Speaker 1: expedition bottom line gets stuck trapped in the ice. Uh
• 1:20:05
  Speaker 1: and in middle life is no, they just have nothing
• 1:20:08
  Speaker 1: and uh they by all means they should have been. Yeah,
• 1:20:12
  Speaker 1: they hunted to some extent, but they couldn't be rescued
• 1:20:16
  Speaker 1: for for years. But I almost don't want to say
• 1:20:19
  Speaker 1: what happened or what happened with survival because because it's
• 1:20:22
  Speaker 1: because you don't know. If you don't know, it makes
• 1:20:24
  Speaker 1: much more interesting. But as a tale of survival, it is.
• 1:20:29
  Speaker 1: If it's not the best tale of survival ever written,
• 1:20:33
  Speaker 1: it's um and you you know you an endurance, I
• 1:20:36
  Speaker 1: mean the endurance. Endurance is well titled and there are
• 1:20:41
  Speaker 1: so many images in there and so many, so many
• 1:20:43
  Speaker 1: it's the story itself is so compelling. Uh, it's just
• 1:20:47
  Speaker 1: a great reason I'll put that on my list. That
• 1:20:49
  Speaker 1: sounds fascinating. Um So since you joined the finance industry,
• 1:20:53
  Speaker 1: what what are some of the most significant changes that
• 1:20:56
  Speaker 1: you've you've witnessed. Well, we talked about the floors disappear ring,
• 1:21:00
  Speaker 1: you know, tremendousity, the computers, I mean, the whole why
• 1:21:04
  Speaker 1: I started out in the day or we we you know,
• 1:21:07
  Speaker 1: most people, we didn't have quotepaciet you know, on desk.
• 1:21:10
  Speaker 1: We had these giant wall boards where the click and
• 1:21:13
  Speaker 1: that was technology, the board wall boards which you know,
• 1:21:16
  Speaker 1: clicked every time the price changed. Technology has been a
• 1:21:19
  Speaker 1: tremendous change, and that's that's brought into uh into existence
• 1:21:22
  Speaker 1: a whole bunch of uh the approaches that would have
• 1:21:25
  Speaker 1: been impossible because of the calculations of all the just
• 1:21:28
  Speaker 1: two intends to do any other way. So you have
• 1:21:30
  Speaker 1: a change the nature of trading in that sense. Um,
• 1:21:35
  Speaker 1: I guess a lot more strategies. I mean, it used
• 1:21:37
  Speaker 1: to be much simpler and you got you got a
• 1:21:39
  Speaker 1: fifty eight different head fund strategies now all sorts of
• 1:21:42
  Speaker 1: arcane stuff. So those are some of that changes. But
• 1:21:45
  Speaker 1: human nature doesn't change. And that's where the similarity of
• 1:21:48
  Speaker 1: markets remains so given the technology changes in the past,
• 1:21:53
  Speaker 1: what what do you think might be some of the
• 1:21:55
  Speaker 1: next major shifts we see going forward? See, I'm not
• 1:21:58
  Speaker 1: a predictor. I don't know. You know that's the right answer, don't.
• 1:22:02
  Speaker 1: I always like that answer. If nobody if you don't know,
• 1:22:05
  Speaker 1: you're better off saying that then then guessing. And so
• 1:22:08
  Speaker 1: few people in this industry of willingness. I never I
• 1:22:10
  Speaker 1: never answer a question. You know, I don't think I
• 1:22:12
  Speaker 1: know the answer to right now. But by the way,
• 1:22:14
  Speaker 1: I've done enough TV in my career that when someone
• 1:22:17
  Speaker 1: asked you a question and you say I don't know,
• 1:22:19
  Speaker 1: it throws them off. They have no idea what I've
• 1:22:22
  Speaker 1: done that? So where's the down gonna be? Right right?
• 1:22:25
  Speaker 1: I don't know. They look at you like you have
• 1:22:27
  Speaker 1: two heads. Come on, give me a number seven I've
• 1:22:30
  Speaker 1: done in three I remember doing inenter you in Australia
• 1:22:32
  Speaker 1: and I said, look, you know, I can talk about
• 1:22:34
  Speaker 1: training and I can talk about this. I don't but
• 1:22:36
  Speaker 1: that because I don't ask me. I'm not. You don't
• 1:22:38
  Speaker 1: ask me, I'm not and I'm not fo First question,
• 1:22:41
  Speaker 1: what do you think the Australian stock Market's gonna do
• 1:22:43
  Speaker 1: you know, I have no idea and it's basically what
• 1:22:47
  Speaker 1: I answered. So, um, so let's get to our our
• 1:22:50
  Speaker 1: two are too, uh A two favorite questions that we
• 1:22:55
  Speaker 1: ask all of our guests. So a millennial or Reese
• 1:23:00
  Speaker 1: graduate comes to you and says, I'm thinking of getting
• 1:23:02
  Speaker 1: into finance as a career. What sort of advice would
• 1:23:05
  Speaker 1: you give them? Oh that's a tough one. Uh you're
• 1:23:10
  Speaker 1: talking about trading, You're talking just finances, anything and anything,
• 1:23:13
  Speaker 1: and uh, well, uh, first make sure it's what you
• 1:23:17
  Speaker 1: really want to do. I mean, it's not you're not
• 1:23:19
  Speaker 1: just looking to do for the money. Um, you know.
• 1:23:26
  Speaker 1: I guess in terms of finding a job, probably the
• 1:23:28
  Speaker 1: only effective way to do it these days is networking.
• 1:23:31
  Speaker 1: Umbo career itself. The treer has to be geared to
• 1:23:37
  Speaker 1: something that well, you want to go with your strength. So, uh,
• 1:23:41
  Speaker 1: if you can write, you want to try to find
• 1:23:43
  Speaker 1: an angle it and fanthasized writing. If you can do analytics,
• 1:23:46
  Speaker 1: he didn't do that. If you good in computers, you know,
• 1:23:49
  Speaker 1: so take advantage of your strength and try to break
• 1:23:51
  Speaker 1: into the career on your strong point. Basically, focus on
• 1:23:54
  Speaker 1: your strong point and and our last question, um, what
• 1:23:58
  Speaker 1: is it that you know about investing today you wish
• 1:24:01
  Speaker 1: you knew thirty plus years ago when you started. Well.
• 1:24:04
  Speaker 1: Uh that one of the themes of Marco Wizzards is
• 1:24:08
  Speaker 1: that the risk of management is more important than than
• 1:24:11
  Speaker 1: trading strategy. Uh. Oh you know what. Uh And this
• 1:24:15
  Speaker 1: is what I've made mistake I've made made made more recently,
• 1:24:18
  Speaker 1: and I wish I learned much quicker. And even if
• 1:24:20
  Speaker 1: I learned it, I kind of repeated it. Hopefully I'll
• 1:24:22
  Speaker 1: never repeat it again. But um, and maybe my my
• 1:24:26
  Speaker 1: biggest flaw as a trader is be careful of getting
• 1:24:30
  Speaker 1: too complacent when you're doing very well. Uh so all
• 1:24:34
  Speaker 1: my you know, for for years and years, every time
• 1:24:37
  Speaker 1: I've had any significant draw downs, that's always been after
• 1:24:41
  Speaker 1: I've done extremely well. Yeah, you know that I've witnessed
• 1:24:44
  Speaker 1: that and experienced it. So I'm I'm actually I'm actually
• 1:24:47
  Speaker 1: superb at not at coming in for a small steak
• 1:24:50
  Speaker 1: and even just controlling the lost tiny amount or not
• 1:24:53
  Speaker 1: losing anything and just getting ahead and never being behind.
• 1:24:55
  Speaker 1: I'm really really good at that. Um. But I'm really
• 1:24:59
  Speaker 1: been terror ball about once I get ahead, not a lot,
• 1:25:02
  Speaker 1: you know, than than giving back a chunk, which I would,
• 1:25:06
  Speaker 1: But because I do things or take more risk, or
• 1:25:10
  Speaker 1: do things differently than I would have done when I
• 1:25:12
  Speaker 1: was being so super cautious. So when i'm when I
• 1:25:14
  Speaker 1: thought out in the beginning, I'm every time I got
• 1:25:16
  Speaker 1: and I don't trade all the time, so it depends
• 1:25:18
  Speaker 1: on how busy i'm. But every time I saw trading,
• 1:25:20
  Speaker 1: I started very small and very cautious, and that's when
• 1:25:22
  Speaker 1: I'm best. So it's so funny you say that when
• 1:25:24
  Speaker 1: I when I began as a trader, I ended up
• 1:25:26
  Speaker 1: creating a number of rules, one of which was never
• 1:25:29
  Speaker 1: let a profit turn into a loss. But then mid nineties,
• 1:25:33
  Speaker 1: just like you talked, what happens when you have these
• 1:25:35
  Speaker 1: giant winners. So that's where the rule came from, which
• 1:25:39
  Speaker 1: is when you're up x percent and x has to
• 1:25:42
  Speaker 1: be substantial. If you give back, that's it cut cut
• 1:25:46
  Speaker 1: your losses, and I think, and there's something along there.
• 1:25:49
  Speaker 1: So in other words, you you're up a hundred up,
• 1:25:51
  Speaker 1: now I'm alling up seventy five. That's it. I'm out.
• 1:25:54
  Speaker 1: Otherwise we've all seen those round trips too many times. Jack.
• 1:25:58
  Speaker 1: This is absolutely fascinating. Thank you so much, Thank you
• 1:26:01
  Speaker 1: so much for doing this, for those of you who
• 1:26:04
  Speaker 1: are still with us almost two hours later. Um, we've
• 1:26:09
  Speaker 1: been speaking with Jack Squager. He is the author of
• 1:26:13
  Speaker 1: the Complete Guide to Futures Trading. Look for the new
• 1:26:15
  Speaker 1: edition coming out in the fall. Market Wizards, Stock Market Wizards,
• 1:26:20
  Speaker 1: New Market Wizards, and Hedge Fund Wizards, as well as
• 1:26:24
  Speaker 1: the Little Book of Market Wizards. Diday I got I
• 1:26:27
  Speaker 1: nailed them all. Uh, and be sure and check out
• 1:26:30
  Speaker 1: Jack's new entrepreneurial venture UH fund seater dot com, where
• 1:26:35
  Speaker 1: you could see how they are trying to find the
• 1:26:39
  Speaker 1: new uh, the new emerging managers. Perhaps, if you're an
• 1:26:42
  Speaker 1: active trader, you might want to register at fund seater
• 1:26:45
  Speaker 1: and see if eventually they find you as as one
• 1:26:49
  Speaker 1: of the outstanding performers. If you have enjoyed this conversation,
• 1:26:54
  Speaker 1: be sure and look Up an Inch or Down an
• 1:26:56
  Speaker 1: Inch on Apple iTunes and see any of the other
• 1:26:59
  Speaker 1: nineties seven or so such chats that we've had. Check
• 1:27:02
  Speaker 1: out my daily column on Bloomberg dot com, or you
• 1:27:05
  Speaker 1: can follow me on Twitter. Are you on Twitter these days? Jack? Yeah?
• 1:27:08
  Speaker 1: I am Jack Schweger Jack at Jack Schweger. Um, I
• 1:27:13
  Speaker 1: would be remiss if I did not think Taylor Riggs
• 1:27:16
  Speaker 1: my booker, Charlie Volmer our producer, and Reggie our recording engineer.
• 1:27:21
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• 1:27:28
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