1
00:00:00,080 --> 00:00:03,400
Speaker 1: Brought to you by B A. S F. We create chemistry.

2
00:00:07,280 --> 00:00:11,559
Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.

3
00:00:11,760 --> 00:00:16,920
Speaker 1: Welcome to the one addition of the Masters in Business

4
00:00:16,960 --> 00:00:20,680
Speaker 1: podcast here on Bloomberg Radio. I am so thrilled and

5
00:00:20,720 --> 00:00:25,599
Speaker 1: excited to have hit this milestone if you would have

6
00:00:25,760 --> 00:00:29,520
Speaker 1: told me when we began what really started as a

7
00:00:29,600 --> 00:00:35,639
Speaker 1: skunk works project on the down low. Quick digression as

8
00:00:35,680 --> 00:00:39,360
Speaker 1: to how this podcast came about. Tim O'Brien, who runs

9
00:00:39,360 --> 00:00:42,040
Speaker 1: Bloomberg View and Bloomberg Gadfly, He's the one who set

10
00:00:42,040 --> 00:00:47,959
Speaker 1: it up. Uh was recruiting me to, uh come right

11
00:00:48,000 --> 00:00:51,280
Speaker 1: from Bloomberg and I said, listen, you guys have a website.

12
00:00:51,440 --> 00:00:55,000
Speaker 1: I have a website. Why do I wanna publish for

13
00:00:55,000 --> 00:00:57,760
Speaker 1: for you guys instead of on my own site? And

14
00:00:57,840 --> 00:01:01,280
Speaker 1: he said, well, look at this fantastic playground that we

15
00:01:01,360 --> 00:01:04,800
Speaker 1: have here at Bloomberg. Look at the technology, the facilities.

16
00:01:05,120 --> 00:01:07,080
Speaker 1: I have to tell you that was really a very

17
00:01:07,160 --> 00:01:11,960
Speaker 1: persuasive argument. The Bloomberg Building, if you've never been, is

18
00:01:12,600 --> 00:01:17,080
Speaker 1: it's mind blowing. It is a purpose built technology and

19
00:01:17,200 --> 00:01:21,600
Speaker 1: media high rise in the middle of midtown. It's really

20
00:01:21,600 --> 00:01:23,959
Speaker 1: an amazing, amazing place. And if there's any way you

21
00:01:24,000 --> 00:01:28,640
Speaker 1: could find uh, the opportunity to come here professionally, you should.

22
00:01:28,959 --> 00:01:32,679
Speaker 1: It's pretty awesome. And when Tim was showing me around

23
00:01:33,160 --> 00:01:38,000
Speaker 1: the facilities, I noticed all these super cool um radio

24
00:01:38,720 --> 00:01:41,560
Speaker 1: booths and studios. Now I've been to the Bloomberg Building

25
00:01:42,040 --> 00:01:44,479
Speaker 1: numerous times before. I've been on the radio here, I've

26
00:01:44,520 --> 00:01:48,520
Speaker 1: been on the Bloomberg TV set, I've been here for conferences,

27
00:01:48,960 --> 00:01:52,520
Speaker 1: so I'm somewhat familiar with the space. But when you're

28
00:01:52,640 --> 00:01:56,080
Speaker 1: looking at it not as just a guest who's blowing

29
00:01:56,080 --> 00:01:58,200
Speaker 1: in and out in order to do a television show,

30
00:01:58,800 --> 00:02:01,400
Speaker 1: but as a facility. The if that someone says, hey,

31
00:02:01,400 --> 00:02:04,680
Speaker 1: you have access to all all of these really cool toys,

32
00:02:05,360 --> 00:02:07,920
Speaker 1: you see it from a slightly different perspective. And so

33
00:02:08,560 --> 00:02:12,480
Speaker 1: when we started chit chatting about what we could actually

34
00:02:12,680 --> 00:02:16,919
Speaker 1: do with these facilities, I started to get all sorts

35
00:02:16,960 --> 00:02:22,080
Speaker 1: of interesting, interesting ideas, the first of which was I

36
00:02:22,120 --> 00:02:25,880
Speaker 1: would love to do a podcast and actually talk to

37
00:02:26,600 --> 00:02:30,720
Speaker 1: some of the most intelligent and influential and important people

38
00:02:31,639 --> 00:02:35,800
Speaker 1: in the industry in business and finance on Wall Street. Uh.

39
00:02:35,840 --> 00:02:38,400
Speaker 1: We kicked a few ideas around. Someone had suggested, how

40
00:02:38,440 --> 00:02:41,160
Speaker 1: about a television show I said, no, go get Joe.

41
00:02:41,200 --> 00:02:43,320
Speaker 1: Reason thought to do that. I don't want to do TV.

42
00:02:43,480 --> 00:02:46,239
Speaker 1: I I don't want to wear a suit and tie

43
00:02:46,240 --> 00:02:47,799
Speaker 1: every day, and I want to shave. I don't want

44
00:02:47,800 --> 00:02:50,560
Speaker 1: to have to go on a diet. Um. I've dropped

45
00:02:50,560 --> 00:02:52,600
Speaker 1: about twenty pounds, but to do TV I would have

46
00:02:52,600 --> 00:02:54,520
Speaker 1: to drop another twenty and that would be a lot

47
00:02:54,560 --> 00:02:57,000
Speaker 1: of work. So when they said what do you want

48
00:02:57,000 --> 00:03:00,680
Speaker 1: to do? My answer was I'm want to sit with

49
00:03:00,720 --> 00:03:06,240
Speaker 1: these people and have an adult conversation about important things. Well, podcast,

50
00:03:06,280 --> 00:03:10,360
Speaker 1: what do you mean? And the elevator pitch was Mark

51
00:03:10,400 --> 00:03:14,200
Speaker 1: Marin's WTF meets Charlie Rose. But I went back and

52
00:03:14,200 --> 00:03:18,519
Speaker 1: looked at my notes, and my notes said a podcast

53
00:03:18,680 --> 00:03:24,079
Speaker 1: version of Jack Schweger's Market Wizards. And that was really

54
00:03:24,120 --> 00:03:29,880
Speaker 1: the motivation for this show. And so who better to

55
00:03:30,080 --> 00:03:35,480
Speaker 1: do our hundred podcast? Then the man the legend himself,

56
00:03:35,600 --> 00:03:40,720
Speaker 1: Jack Schweger. He is the author of numerous market wizards books.

57
00:03:40,760 --> 00:03:43,480
Speaker 1: The first one is Market Wizards, the second one is

58
00:03:43,600 --> 00:03:47,280
Speaker 1: New Market Wizards, the third one is Hedge Fund Wizards. Uh,

59
00:03:47,320 --> 00:03:50,080
Speaker 1: plus a number of of different books on options and

60
00:03:50,120 --> 00:03:53,120
Speaker 1: trading and futures. And you know he he has been

61
00:03:53,160 --> 00:03:56,320
Speaker 1: a trader his whole career, and and the writing and

62
00:03:56,560 --> 00:03:59,760
Speaker 1: editing started as a sort of side project, but obviously

63
00:04:00,120 --> 00:04:03,600
Speaker 1: it blew up on its own. Um A quick another

64
00:04:03,680 --> 00:04:08,480
Speaker 1: digression about Jack and I. So, I don't know. I'm

65
00:04:08,520 --> 00:04:10,640
Speaker 1: a new being in the industry. I'm around for less

66
00:04:10,640 --> 00:04:16,040
Speaker 1: than ten years. The first book anybody gives me UM

67
00:04:16,080 --> 00:04:19,039
Speaker 1: to read when I'm studying for my series seven a

68
00:04:19,120 --> 00:04:22,479
Speaker 1: hundred years ago, uh was Market Wizards, and I just

69
00:04:22,560 --> 00:04:26,080
Speaker 1: devoured it. And I wasn't fascinated by the fact that

70
00:04:26,200 --> 00:04:29,360
Speaker 1: all these different traders and fund managers in all these

71
00:04:29,400 --> 00:04:33,880
Speaker 1: different fields somewhere commodities, somewhere where equities, somewhere, bonds, somewhere,

72
00:04:34,800 --> 00:04:39,080
Speaker 1: more complex products, somewhere really simple strategies. There was a

73
00:04:39,240 --> 00:04:43,360
Speaker 1: theme that ran through all of these interviews. And so

74
00:04:43,440 --> 00:04:45,600
Speaker 1: not only did I devour the first book, but I

75
00:04:46,040 --> 00:04:48,520
Speaker 1: reread it every five years. I find it to be

76
00:04:49,320 --> 00:04:52,880
Speaker 1: absolutely fascinating. And the second time I read it, I

77
00:04:53,000 --> 00:04:55,760
Speaker 1: want to say that was nine or two thousand or

78
00:04:55,800 --> 00:04:59,880
Speaker 1: something like that, I decided to do something I almost

79
00:05:00,080 --> 00:05:04,599
Speaker 1: never do, which is write a review on Amazon dot

80
00:05:04,640 --> 00:05:08,120
Speaker 1: Com for the book, and you'll see, other than whining

81
00:05:08,160 --> 00:05:11,359
Speaker 1: about you know, a poorly made product. I almost never

82
00:05:12,040 --> 00:05:15,520
Speaker 1: do book reviews. Uh, I got stuff to do. I

83
00:05:15,520 --> 00:05:19,039
Speaker 1: would rather read books than write book reviews. So I

84
00:05:19,160 --> 00:05:21,919
Speaker 1: happened to be so moved by market Wizards that I

85
00:05:21,960 --> 00:05:24,240
Speaker 1: wrote a review of it. This was I don't know

86
00:05:24,720 --> 00:05:28,440
Speaker 1: one oh three something like that and posting on Amazon

87
00:05:28,640 --> 00:05:32,599
Speaker 1: completely forget about it. Fast forward to episode I don't

88
00:05:32,600 --> 00:05:36,440
Speaker 1: know fift something like that, and Jack Schwager is one

89
00:05:36,440 --> 00:05:38,599
Speaker 1: of our early guests. He was nice enough to come on,

90
00:05:39,160 --> 00:05:43,000
Speaker 1: and he not only reminds me that I wrote a

91
00:05:43,120 --> 00:05:48,360
Speaker 1: review of market Wizards for Amazon, but yeah, Amazon does

92
00:05:48,400 --> 00:05:51,160
Speaker 1: this sort of crowdsourcing thing where you could thumbs up

93
00:05:51,200 --> 00:05:54,479
Speaker 1: or thumbs down a review, And it turned out that

94
00:05:55,000 --> 00:05:59,320
Speaker 1: the readers of the Amazon page on market Wizards had

95
00:05:59,400 --> 00:06:03,200
Speaker 1: made that at the top review of market Wizards. Go

96
00:06:03,320 --> 00:06:07,919
Speaker 1: to Amazon click positive reviews. It's the first one, Jack says,

97
00:06:08,000 --> 00:06:11,000
Speaker 1: it's it's been the first one for over a decade.

98
00:06:11,680 --> 00:06:15,320
Speaker 1: Who knew. Just one of those funny little ironies. Fifteen

99
00:06:15,400 --> 00:06:18,279
Speaker 1: years ago, I wrote a review of a book that

100
00:06:18,360 --> 00:06:22,120
Speaker 1: I thought was really really interesting and important, and now

101
00:06:23,000 --> 00:06:28,320
Speaker 1: in it turns out that our one guests on Bloomberg

102
00:06:28,400 --> 00:06:34,040
Speaker 1: Radio's Masters in Business show and podcast is the same

103
00:06:34,120 --> 00:06:40,120
Speaker 1: gentleman Jack Schweger. So with tremendous amount of excitement, I

104
00:06:40,160 --> 00:06:47,200
Speaker 1: am thrilled to present our podcast here. He is author

105
00:06:47,240 --> 00:06:54,480
Speaker 1: and trader Jack Schweger. This is Masters in Business with

106
00:06:54,520 --> 00:06:59,039
Speaker 1: Barry Ridholts on Bloomberg Radio. I have a special guest

107
00:06:59,080 --> 00:07:03,040
Speaker 1: today who is should be very well known if you

108
00:07:03,080 --> 00:07:06,640
Speaker 1: are an investor or trader and like to read books

109
00:07:06,800 --> 00:07:11,680
Speaker 1: about the craft. His name is Jack Schwager, and I

110
00:07:11,720 --> 00:07:13,920
Speaker 1: have to tell you the first book I have received

111
00:07:14,040 --> 00:07:17,280
Speaker 1: in the industry when I began was Market Wizards. I

112
00:07:17,320 --> 00:07:20,320
Speaker 1: make it a point to reread it every five years

113
00:07:20,400 --> 00:07:23,800
Speaker 1: or so. There are now three versions. There's Market Wizards,

114
00:07:24,240 --> 00:07:27,960
Speaker 1: New Market Wizards, and Hedge Fund Wizards, as well as

115
00:07:27,960 --> 00:07:31,440
Speaker 1: an audio book of actually all of them are three

116
00:07:31,440 --> 00:07:35,560
Speaker 1: are now Jack Schweger. Welcome to bloom Thank you very

117
00:07:35,560 --> 00:07:37,400
Speaker 1: good to be here again. So so I really didn't

118
00:07:37,480 --> 00:07:42,520
Speaker 1: give your your background and introduction enough of a play up.

119
00:07:42,960 --> 00:07:46,800
Speaker 1: You're you're in addition to being an author, you're a trader.

120
00:07:46,800 --> 00:07:49,200
Speaker 1: You've written a number of books on technical trading and

121
00:07:49,240 --> 00:07:53,720
Speaker 1: future trading along those lines as well as an entrepreneur.

122
00:07:54,600 --> 00:08:00,880
Speaker 1: I cannot under estimate I cannot under emphasize how influential

123
00:08:01,280 --> 00:08:04,680
Speaker 1: Market Wizards was. When when did the first book, first

124
00:08:04,680 --> 00:08:08,680
Speaker 1: Market Wizars came out, and how many copies has that,

125
00:08:09,200 --> 00:08:11,880
Speaker 1: you know, printings? It first of all, has been translated

126
00:08:11,960 --> 00:08:14,680
Speaker 1: in so many language I mean weird language, I mean

127
00:08:14,800 --> 00:08:17,800
Speaker 1: languages I wouldn't all expect, like Turkish and Croatian and

128
00:08:17,840 --> 00:08:20,800
Speaker 1: the Vietnamese and whatever. You know. So, and you have

129
00:08:20,840 --> 00:08:23,320
Speaker 1: no idea they sell these books. They make it a

130
00:08:23,360 --> 00:08:25,760
Speaker 1: contract and you have no idea what it sells. So

131
00:08:25,960 --> 00:08:28,560
Speaker 1: and the China and China is like there's two official

132
00:08:28,600 --> 00:08:31,720
Speaker 1: language versions, not to count the bootleg versions. But that's

133
00:08:31,720 --> 00:08:35,680
Speaker 1: true of everything. But absolutely, when whenever someone talks about China,

134
00:08:35,720 --> 00:08:39,520
Speaker 1: there should be implied in parentheses not to count the

135
00:08:39,520 --> 00:08:42,720
Speaker 1: bootlet that's that's that's a given. So in other words,

136
00:08:42,880 --> 00:08:44,839
Speaker 1: but I would guess, I would guess between all the

137
00:08:44,960 --> 00:08:47,439
Speaker 1: you know, all the books I've written globally, i'd say

138
00:08:47,440 --> 00:08:51,240
Speaker 1: probably a couple of million sold. That's huge. And for

139
00:08:51,280 --> 00:08:54,439
Speaker 1: those people who may not be familiar with Market Wizards,

140
00:08:54,600 --> 00:08:58,920
Speaker 1: the premise of the book is essentially, let's speak to

141
00:08:59,000 --> 00:09:02,839
Speaker 1: some some very six sucessful investors and traders and see

142
00:09:02,880 --> 00:09:06,839
Speaker 1: how they do and what their secret sources and what's

143
00:09:06,880 --> 00:09:09,720
Speaker 1: fascinating In the book, you spoke to people who are

144
00:09:09,760 --> 00:09:14,000
Speaker 1: commodities traders, bond traders, equity traders, currency traders, and there

145
00:09:14,000 --> 00:09:18,280
Speaker 1: were some really consistent themes. No matter what these people

146
00:09:18,280 --> 00:09:21,439
Speaker 1: were doing, whether whether they were long term investors or

147
00:09:21,679 --> 00:09:24,959
Speaker 1: or the shortest of short term traders, certain themes came

148
00:09:24,960 --> 00:09:27,120
Speaker 1: out in the book over and over again, right, And

149
00:09:27,120 --> 00:09:28,720
Speaker 1: and that was what I was trying to do. I

150
00:09:28,720 --> 00:09:30,920
Speaker 1: was write, what is the secret source, what separates this

151
00:09:31,000 --> 00:09:35,720
Speaker 1: group of extremely successful successful and just off the child

152
00:09:35,920 --> 00:09:38,760
Speaker 1: and some of them, I mean just extraordinary and and

153
00:09:38,760 --> 00:09:40,960
Speaker 1: and the people I've interviewed included sort of the most

154
00:09:40,960 --> 00:09:44,920
Speaker 1: famous traders. We're gonna go into the specifics about some

155
00:09:45,000 --> 00:09:47,360
Speaker 1: of them, Okay a few minutes. So so as far

156
00:09:47,400 --> 00:09:50,880
Speaker 1: as the the lessons, and there are tons of them.

157
00:09:50,920 --> 00:09:53,200
Speaker 1: And I probably in the later books when I did summaries,

158
00:09:53,840 --> 00:09:57,240
Speaker 1: I might have had, like, you know, forty points forty points,

159
00:09:57,240 --> 00:09:59,719
Speaker 1: and you had all or if you had ad all

160
00:09:59,760 --> 00:10:02,840
Speaker 1: the like all the common denominators, I wouldn't be surprised

161
00:10:02,840 --> 00:10:04,440
Speaker 1: if it got close to a hundred. So it's kind

162
00:10:04,440 --> 00:10:07,240
Speaker 1: of hard to just say which ones, but what the

163
00:10:07,960 --> 00:10:11,440
Speaker 1: fact that they were radically different from each other was

164
00:10:11,520 --> 00:10:14,240
Speaker 1: maybe one of the most important common denominators, because what

165
00:10:14,280 --> 00:10:17,680
Speaker 1: it spoke to is they each found their own way.

166
00:10:17,280 --> 00:10:20,480
Speaker 1: I can't tell you how many times people, uh, you know,

167
00:10:20,600 --> 00:10:24,120
Speaker 1: we'll ask me or write me, what traders should I follow?

168
00:10:24,160 --> 00:10:26,720
Speaker 1: That's right, what trader should I follow? Or who's the

169
00:10:26,720 --> 00:10:29,320
Speaker 1: best trader you know? And and you know to me

170
00:10:29,520 --> 00:10:32,679
Speaker 1: that that's it has no that question has no answer,

171
00:10:32,880 --> 00:10:34,880
Speaker 1: And the question actually makes no sense. It makes no

172
00:10:34,920 --> 00:10:37,679
Speaker 1: more sense than somebody calling me and asking me, I've

173
00:10:37,720 --> 00:10:39,679
Speaker 1: got to go buy a suit, what side should I get?

174
00:10:39,679 --> 00:10:41,679
Speaker 1: And I've never seen the person. I mean, it's as

175
00:10:41,679 --> 00:10:45,120
Speaker 1: relevant to question as that. So these people found would

176
00:10:45,120 --> 00:10:47,520
Speaker 1: work for them, and it was always different. So let's

177
00:10:47,520 --> 00:10:49,959
Speaker 1: talk about a couple of themes though that run through

178
00:10:50,000 --> 00:10:53,480
Speaker 1: all the traders. Let's let's start with discipline, probably the

179
00:10:53,559 --> 00:10:57,439
Speaker 1: single most important lesson at least that I took. What

180
00:10:58,000 --> 00:11:02,560
Speaker 1: was the general take on being a disciplined persson when

181
00:11:02,559 --> 00:11:04,480
Speaker 1: I asked? I asked that question to a lot, you know,

182
00:11:04,559 --> 00:11:07,360
Speaker 1: some questions I I tried to count the interviews and

183
00:11:07,440 --> 00:11:10,000
Speaker 1: conversational format. You know what you're like? You you do right?

184
00:11:10,080 --> 00:11:14,520
Speaker 1: So we'll discuss. You are the inspiration, so and you know,

185
00:11:14,640 --> 00:11:17,480
Speaker 1: don't start. I would have like questions sort of back up,

186
00:11:17,559 --> 00:11:19,760
Speaker 1: you know, but I'd like talk and talk, you know,

187
00:11:19,760 --> 00:11:22,600
Speaker 1: and sometimes going at two days of conversation sometimes and

188
00:11:22,600 --> 00:11:24,600
Speaker 1: only the end would I like, look, did I miss anything?

189
00:11:24,600 --> 00:11:29,400
Speaker 1: And usually nothing, you know, usually picked up everything. So, um,

190
00:11:30,280 --> 00:11:32,240
Speaker 1: I got off a tangent to it. I was kind

191
00:11:32,280 --> 00:11:35,800
Speaker 1: on The original question was on discipline. Discipline, right, So

192
00:11:36,600 --> 00:11:39,640
Speaker 1: one question I asked, did ask everybody or just about

193
00:11:40,200 --> 00:11:43,720
Speaker 1: is what what separates you know? What differentiate too? What? What?

194
00:11:43,760 --> 00:11:47,080
Speaker 1: Why are you different? And and discipline was the single

195
00:11:47,120 --> 00:11:51,960
Speaker 1: most answered, you know, answer to that. That was the

196
00:11:51,960 --> 00:11:54,680
Speaker 1: most common answer to that question was discipline. Now, when

197
00:11:54,800 --> 00:11:56,920
Speaker 1: let's let's dig in a little bit. When they say

198
00:11:56,960 --> 00:12:00,600
Speaker 1: their disciplines, are they referring to keeping them most in check?

199
00:12:00,640 --> 00:12:03,720
Speaker 1: Are they referring to I have a methodology and I

200
00:12:03,840 --> 00:12:06,560
Speaker 1: find it follow it no matter what? What did they mean?

201
00:12:06,679 --> 00:12:09,160
Speaker 1: And and those two are not separate? Um? Yeah, but

202
00:12:09,200 --> 00:12:12,400
Speaker 1: they mean primarily I've got a methronology and I'm not

203
00:12:12,480 --> 00:12:14,800
Speaker 1: gonna straight from it. And I know you at your

204
00:12:14,880 --> 00:12:17,800
Speaker 1: trader and I'm I'm a trader. And but anybody's trade

205
00:12:17,840 --> 00:12:19,640
Speaker 1: and knows this that if you if you've got an

206
00:12:19,640 --> 00:12:22,720
Speaker 1: approach that sort of work. And to be clear, no

207
00:12:22,840 --> 00:12:26,520
Speaker 1: approach work, no, no approach works any great amount of time.

208
00:12:27,040 --> 00:12:30,640
Speaker 1: Everything falls into that affairs just just a question of probabilities.

209
00:12:30,640 --> 00:12:33,680
Speaker 1: But if you've got an approach that over time probabilities

210
00:12:33,720 --> 00:12:35,400
Speaker 1: are in your favor and you make more money than

211
00:12:35,440 --> 00:12:38,120
Speaker 1: you lose and you keep control. If you've got that

212
00:12:38,559 --> 00:12:43,120
Speaker 1: approach and you've got rules or trades that you do, uh,

213
00:12:43,160 --> 00:12:45,280
Speaker 1: and you're losing some of them, that's fine because you're

214
00:12:45,280 --> 00:12:47,040
Speaker 1: gonna lose on a certain percentage. But when you do

215
00:12:47,120 --> 00:12:49,520
Speaker 1: stuff that is counter to what you're supposed to do,

216
00:12:49,800 --> 00:12:51,400
Speaker 1: like well, I got, I got. This is how I

217
00:12:51,400 --> 00:12:53,320
Speaker 1: get into a trade. And then you look at the market. Gee,

218
00:12:53,360 --> 00:12:55,240
Speaker 1: you know, let's take it. We got Brexit going on here,

219
00:12:55,360 --> 00:12:57,280
Speaker 1: you know, and you've got this market crashing. Boy, this

220
00:12:57,360 --> 00:12:59,320
Speaker 1: must be really over sold. It's not really part of

221
00:12:59,320 --> 00:13:02,240
Speaker 1: my trade. But I'll take a flyer the pounds down

222
00:13:02,360 --> 00:13:05,360
Speaker 1: eighteen cents, you know, that's probably good for a balance.

223
00:13:05,520 --> 00:13:08,360
Speaker 1: I'll buy it. Those type of trade. So that's breaking discipline.

224
00:13:08,520 --> 00:13:10,079
Speaker 1: That's not part of your plan, that's not part of

225
00:13:10,120 --> 00:13:12,920
Speaker 1: your approach. Unless your plan is unless randomly file the

226
00:13:12,920 --> 00:13:15,679
Speaker 1: headline and the news and chase everything, well, those people

227
00:13:15,679 --> 00:13:18,599
Speaker 1: don't stay in business that well, or that this is

228
00:13:18,640 --> 00:13:20,960
Speaker 1: this is actually going. My my example wasn't just the

229
00:13:20,960 --> 00:13:22,920
Speaker 1: opposite sort of like you're gonna you're gonna try to

230
00:13:22,920 --> 00:13:24,559
Speaker 1: pick the bottom and you know you're gonna try to

231
00:13:24,600 --> 00:13:27,120
Speaker 1: catch the falling knife, so to speak. Um and and

232
00:13:27,160 --> 00:13:29,079
Speaker 1: some people could that could be, that could be in

233
00:13:29,120 --> 00:13:32,000
Speaker 1: a strategy in fact, catching a following knife. I've been

234
00:13:32,040 --> 00:13:34,920
Speaker 1: through traders who do trade like that. But you have

235
00:13:34,960 --> 00:13:37,200
Speaker 1: to have um. But then you know what you're getting out.

236
00:13:37,280 --> 00:13:39,160
Speaker 1: You know you you think it's gonna hold here and

237
00:13:39,200 --> 00:13:41,280
Speaker 1: if it doesn't, your out. So that's but just to

238
00:13:41,320 --> 00:13:44,120
Speaker 1: blindly take a trade that's not part of your your approach,

239
00:13:44,200 --> 00:13:47,240
Speaker 1: that's where that would be breaking discipline or more more important,

240
00:13:47,280 --> 00:13:49,959
Speaker 1: even more important is is not getting in and we

241
00:13:50,040 --> 00:13:52,240
Speaker 1: we and I know I'm sort of preaching to the

242
00:13:52,320 --> 00:13:53,720
Speaker 1: choir when I talk to you, but you know all

243
00:13:53,760 --> 00:13:55,240
Speaker 1: of this stuff, and this is I know you've got

244
00:13:55,280 --> 00:13:58,160
Speaker 1: the exact same view. Getting in is the least important part.

245
00:13:58,240 --> 00:14:00,240
Speaker 1: Getting out. That's what you gotta worry about. That's what

246
00:14:00,240 --> 00:14:02,680
Speaker 1: people don't worry about I used to jokingly sell there's

247
00:14:02,720 --> 00:14:05,120
Speaker 1: a million books on what to buy, but other than

248
00:14:05,240 --> 00:14:10,000
Speaker 1: justin mamos what to sell exactly. Hey, here's your exit

249
00:14:10,640 --> 00:14:13,720
Speaker 1: and that and that's when the discipline and that's where

250
00:14:13,720 --> 00:14:16,600
Speaker 1: the discipline comes in. Yeah, exactly. So let me back

251
00:14:16,679 --> 00:14:18,480
Speaker 1: up and talk a little bit about you, because people

252
00:14:18,520 --> 00:14:22,240
Speaker 1: may not be familiar with with your background. So how

253
00:14:22,280 --> 00:14:26,120
Speaker 1: did you find your way to finance? Oh? Purely accidentally,

254
00:14:26,560 --> 00:14:30,040
Speaker 1: I graduated, um, you know, from from an Ivy League

255
00:14:30,040 --> 00:14:33,720
Speaker 1: school for which to ground. I went to Brown with

256
00:14:33,800 --> 00:14:36,280
Speaker 1: a master's in economics, and I kind of expected sort

257
00:14:36,280 --> 00:14:38,200
Speaker 1: of day after graduation, i'd sort of stick my head

258
00:14:38,200 --> 00:14:39,920
Speaker 1: out and I'd have five offers, you know, and all that.

259
00:14:40,440 --> 00:14:42,160
Speaker 1: And I didn't know how to look for a job.

260
00:14:42,160 --> 00:14:44,640
Speaker 1: And my first maybe, I mean, I had the temporary point,

261
00:14:44,640 --> 00:14:46,160
Speaker 1: but the first real job is looking for So I

262
00:14:46,200 --> 00:14:50,040
Speaker 1: went to employment agencies and I get they probably haven't

263
00:14:50,080 --> 00:14:54,360
Speaker 1: chased since that they don't exist. Yeah all right, So

264
00:14:54,800 --> 00:14:56,720
Speaker 1: but they weren't very effective, and I like a two

265
00:14:56,720 --> 00:14:58,800
Speaker 1: weeks I think, you know, I didn't hair back anythings.

266
00:14:58,800 --> 00:15:01,240
Speaker 1: I got frustrated. So I just at the time New York,

267
00:15:01,240 --> 00:15:04,520
Speaker 1: the New York Times had a help not a help wanted,

268
00:15:04,600 --> 00:15:08,560
Speaker 1: but but position wanted a section and so for about

269
00:15:08,640 --> 00:15:12,400
Speaker 1: six job secret so like I think it costs me

270
00:15:12,520 --> 00:15:16,040
Speaker 1: like fourteen dollars or fifteen dollars. I put a two

271
00:15:16,040 --> 00:15:18,960
Speaker 1: line ad in and something along the line, uh, you know,

272
00:15:19,080 --> 00:15:22,400
Speaker 1: masters and an economics minor and math looking for an

273
00:15:22,400 --> 00:15:26,480
Speaker 1: analytical job pretty much. And I had about I don't

274
00:15:26,480 --> 00:15:31,200
Speaker 1: know the sixteen seventeen responses to that, uh all but one.

275
00:15:31,720 --> 00:15:34,640
Speaker 1: All but one were come ons. In other words, the

276
00:15:34,760 --> 00:15:38,560
Speaker 1: people they want you to say, they want you exactly

277
00:15:38,560 --> 00:15:39,960
Speaker 1: they want you to buy. It was like these chain

278
00:15:40,000 --> 00:15:42,600
Speaker 1: cell you know you they'll sell you, uh two thousand

279
00:15:42,640 --> 00:15:44,800
Speaker 1: dollars worth of soap bubbles and you go find double

280
00:15:44,840 --> 00:15:46,160
Speaker 1: people to sell at that type of thing. I went.

281
00:15:46,320 --> 00:15:49,120
Speaker 1: I went to one of these, uh thinking I was

282
00:15:49,160 --> 00:15:53,000
Speaker 1: going to a meeting of the company, and uh that

283
00:15:53,040 --> 00:15:54,440
Speaker 1: it was a manager. I said, well, I said, I

284
00:15:54,480 --> 00:15:56,560
Speaker 1: asked even the phone, this is not a sales we

285
00:15:56,600 --> 00:15:59,440
Speaker 1: have sales, but this is and I'm expecting to meet

286
00:15:59,440 --> 00:16:01,440
Speaker 1: this group of uh you know, at ah at the

287
00:16:01,960 --> 00:16:04,840
Speaker 1: quarterly meeting or whatever. And I walked in. It is

288
00:16:04,920 --> 00:16:07,280
Speaker 1: like this huge auditorium and it's like a display in

289
00:16:07,320 --> 00:16:09,040
Speaker 1: the front. And then and they have her on a

290
00:16:09,080 --> 00:16:12,040
Speaker 1: film with I think of Sebastian Cabital telling you, telling

291
00:16:12,040 --> 00:16:13,600
Speaker 1: how great this product. And then they have a guy

292
00:16:13,640 --> 00:16:16,160
Speaker 1: who has some sort of chemist who fell off a

293
00:16:16,240 --> 00:16:18,320
Speaker 1: roof supposedly, and while he was in the hospital to

294
00:16:18,320 --> 00:16:21,040
Speaker 1: think how he can make his life his wife's job easier,

295
00:16:21,360 --> 00:16:23,520
Speaker 1: and sort of came up with this miracle cleaning product

296
00:16:24,000 --> 00:16:26,560
Speaker 1: and anyway, and and then they have a guy come

297
00:16:26,560 --> 00:16:28,800
Speaker 1: out and tell you how he drives a portion uh

298
00:16:29,120 --> 00:16:31,040
Speaker 1: makes uh you know, how you can make ten dollars

299
00:16:31,240 --> 00:16:34,040
Speaker 1: spare time. Really literally, this was it. Uh. I went

300
00:16:34,120 --> 00:16:36,400
Speaker 1: to one of these obviously, and then any calls I

301
00:16:36,440 --> 00:16:40,000
Speaker 1: got there after. But there was one legitimate call, and

302
00:16:40,040 --> 00:16:43,800
Speaker 1: that legitimate call, as fate would have it, was a

303
00:16:43,840 --> 00:16:48,280
Speaker 1: research analyst position that was being vacated by Michael Marcus.

304
00:16:48,760 --> 00:16:52,760
Speaker 1: Michael Marcus who ultimately who was leaving to become a trader,

305
00:16:53,640 --> 00:16:57,920
Speaker 1: and um, he ultimately became an incredible trader. We can

306
00:16:57,960 --> 00:17:00,760
Speaker 1: talk more about him later if you want. But he

307
00:17:01,200 --> 00:17:03,280
Speaker 1: and I met as he was leaving and I was

308
00:17:03,320 --> 00:17:05,919
Speaker 1: going in and sort of he still was in New

309
00:17:05,960 --> 00:17:08,000
Speaker 1: York for a while and he would get together for lunches,

310
00:17:08,080 --> 00:17:11,400
Speaker 1: you know, because this uh well, this was a firm

311
00:17:11,440 --> 00:17:14,520
Speaker 1: called at the times called the Rentals Securities, which then

312
00:17:14,600 --> 00:17:17,600
Speaker 1: mergeds the Dean Withino Reynolds and went into you know,

313
00:17:17,680 --> 00:17:22,040
Speaker 1: multiple ultimately it became well yes or who, I don't

314
00:17:22,040 --> 00:17:24,160
Speaker 1: know where they ultimately ended up. I didn't stay. I

315
00:17:24,160 --> 00:17:26,600
Speaker 1: I stayed for two years, and you know I was

316
00:17:26,880 --> 00:17:30,600
Speaker 1: I started out like making two thousands less than my secretary. Um,

317
00:17:31,080 --> 00:17:34,240
Speaker 1: why shared with the research director. And I was doing

318
00:17:34,440 --> 00:17:38,160
Speaker 1: I and enough analyst, we're doing really almost all the work. Um.

319
00:17:38,560 --> 00:17:40,520
Speaker 1: And then after two years, I just stuck and I

320
00:17:40,560 --> 00:17:44,040
Speaker 1: was writing for for the Predecessor. Now it's called Modern Trading,

321
00:17:44,040 --> 00:17:45,919
Speaker 1: and then before that was called Futures, and before that

322
00:17:45,960 --> 00:17:49,440
Speaker 1: it was originally called Commodities Magazine. And that's why I

323
00:17:49,440 --> 00:17:51,919
Speaker 1: started writing. As I started writing, and you know, column

324
00:17:52,000 --> 00:17:54,080
Speaker 1: I came. So so two years I had a little

325
00:17:54,080 --> 00:17:55,880
Speaker 1: bit of a reputation. I went and stuck my head out,

326
00:17:56,119 --> 00:17:59,879
Speaker 1: you know, instantaneously got a job, uh you know as

327
00:18:00,000 --> 00:18:03,160
Speaker 1: research director. Triple my salary, triple that salary, and so

328
00:18:03,160 --> 00:18:05,000
Speaker 1: so I left it that so, I you know, I

329
00:18:05,080 --> 00:18:08,400
Speaker 1: didn't stay at Reynolds too long. I'm Barry Rihults. You're

330
00:18:08,480 --> 00:18:11,880
Speaker 1: listening to Masters in Business on Bloomberg Radio. My special

331
00:18:11,880 --> 00:18:15,399
Speaker 1: guest today is Jack Schweger. He is the author of

332
00:18:15,440 --> 00:18:19,400
Speaker 1: the famous Market Wizard series of books, as well as

333
00:18:19,400 --> 00:18:23,440
Speaker 1: being a trader and entrepreneur. UM, let's talk a little

334
00:18:23,440 --> 00:18:27,560
Speaker 1: bit about the role of luck and skill with traders.

335
00:18:27,600 --> 00:18:31,520
Speaker 1: And I want to ask, what is a deceptively simple question,

336
00:18:32,440 --> 00:18:37,440
Speaker 1: how difficult is trading as a profession, as a as

337
00:18:37,480 --> 00:18:39,840
Speaker 1: to a profession when you can actually earn a living,

338
00:18:40,440 --> 00:18:43,760
Speaker 1: extremely extremely difficult than I don't think most people are

339
00:18:43,760 --> 00:18:45,439
Speaker 1: cut out for it. In fact, I don't think I'm

340
00:18:45,480 --> 00:18:49,200
Speaker 1: cut out for it. I know I've never wanted to. Uh.

341
00:18:49,320 --> 00:18:52,040
Speaker 1: If I were really good, then I maybe would have

342
00:18:52,160 --> 00:18:54,040
Speaker 1: entertained the idea of being a full time trader. But

343
00:18:54,080 --> 00:18:57,120
Speaker 1: I never was good enough, you know. UH, Being good

344
00:18:57,240 --> 00:19:00,280
Speaker 1: enough to be net profitable in the markets as very

345
00:19:00,359 --> 00:19:03,600
Speaker 1: very different from being good enough to your living, coming

346
00:19:03,600 --> 00:19:05,600
Speaker 1: from that you're you know, you're you're you're paying for

347
00:19:05,640 --> 00:19:09,879
Speaker 1: your expenses. So I never had that particular confidence that

348
00:19:10,040 --> 00:19:12,000
Speaker 1: I was I was good enough. And the only reason

349
00:19:12,359 --> 00:19:15,800
Speaker 1: I'm even profitable as a trader, uh is just because

350
00:19:16,320 --> 00:19:18,640
Speaker 1: I've I've just spoken his own e people, and I've

351
00:19:18,680 --> 00:19:23,200
Speaker 1: had so much experience. I actually as my my natural instincts,

352
00:19:23,280 --> 00:19:27,400
Speaker 1: uh are pretty poorly attuned for trading. I think most people. Yeah,

353
00:19:27,400 --> 00:19:29,680
Speaker 1: well actually most people's are, and I'm no exception. And

354
00:19:29,720 --> 00:19:32,000
Speaker 1: in fact, some of the traits that are important for

355
00:19:32,000 --> 00:19:35,320
Speaker 1: good trading. Which something you asked before, what one? That

356
00:19:35,440 --> 00:19:38,560
Speaker 1: one that comes up all the time is patients. Um,

357
00:19:38,640 --> 00:19:40,640
Speaker 1: you know, somebody like Jim Rogers has a great line.

358
00:19:40,680 --> 00:19:43,520
Speaker 1: He says, I don't do anything until there's there's money

359
00:19:43,600 --> 00:19:44,960
Speaker 1: lying in a corner on the floor, and all I

360
00:19:45,000 --> 00:19:46,040
Speaker 1: have to do is to go and pick it up.

361
00:19:46,359 --> 00:19:48,320
Speaker 1: So yeah, yeah, patients, just to wait for something that's

362
00:19:48,320 --> 00:19:51,080
Speaker 1: like a real setup, you know, a real fat pitch um.

363
00:19:51,320 --> 00:19:54,159
Speaker 1: And and similarly to stay with a position. You know

364
00:19:54,200 --> 00:19:57,760
Speaker 1: that the famous line from Reminiscences of a Stock Operator,

365
00:19:57,920 --> 00:20:00,720
Speaker 1: which I like the girl paraphrase, but I think it

366
00:20:00,800 --> 00:20:03,080
Speaker 1: was it might be the exact quote he said. It

367
00:20:03,160 --> 00:20:05,919
Speaker 1: was never uh. And for those listeners who don't know

368
00:20:06,000 --> 00:20:09,359
Speaker 1: the book, it's it's a book with the father's book

369
00:20:09,359 --> 00:20:13,200
Speaker 1: about Jesse Livermore. The Livermore is never identified. Everybody knows

370
00:20:13,240 --> 00:20:17,240
Speaker 1: it's Livermore and where the protagonist says. Uh. Talking about

371
00:20:17,280 --> 00:20:19,199
Speaker 1: what his success was due to, he says, it was

372
00:20:19,280 --> 00:20:22,800
Speaker 1: never my thinking that made the money. It was my sitting.

373
00:20:23,119 --> 00:20:25,399
Speaker 1: Got that my sitting. So he said, hey, I'm not

374
00:20:25,440 --> 00:20:27,680
Speaker 1: so smart. It's just I was able to stay and

375
00:20:27,760 --> 00:20:30,360
Speaker 1: stay and stay with a position I was working out.

376
00:20:30,400 --> 00:20:33,439
Speaker 1: So those that all speaks to patients. And it's a

377
00:20:33,440 --> 00:20:36,479
Speaker 1: trait that I my wife is listening to this recording

378
00:20:36,480 --> 00:20:38,800
Speaker 1: in the next room and actually probably would not ahead

379
00:20:38,840 --> 00:20:40,639
Speaker 1: when I say, you don't want to be with me

380
00:20:40,680 --> 00:20:42,560
Speaker 1: in the same car during a traffic jam. I am

381
00:20:42,560 --> 00:20:45,840
Speaker 1: not a patient person. That's that's that's interesting that there's

382
00:20:45,880 --> 00:20:49,680
Speaker 1: a wonderful book, you know, given all the wonderful books

383
00:20:49,920 --> 00:20:56,200
Speaker 1: on behavioral economics and and how people's cognitive issues are

384
00:20:56,320 --> 00:21:00,000
Speaker 1: are so very suspect. Frank Portnoy, who's probably best known

385
00:21:00,000 --> 00:21:02,880
Speaker 1: and for writing the book Infectious Greed, wrote a book

386
00:21:02,880 --> 00:21:06,479
Speaker 1: a few years ago called weight Um and it's a

387
00:21:06,520 --> 00:21:12,000
Speaker 1: fascinating look at the psychology behind that exact thing behind patients.

388
00:21:12,440 --> 00:21:15,280
Speaker 1: And it really is a trait that can be learned.

389
00:21:15,720 --> 00:21:19,800
Speaker 1: It's so important for for both traders and investors. Uh,

390
00:21:20,119 --> 00:21:23,240
Speaker 1: just look, you mentioned Brexit in the crazy market. You know,

391
00:21:23,440 --> 00:21:25,719
Speaker 1: I'm pretty confident that twenty years from now, when we

392
00:21:25,760 --> 00:21:28,879
Speaker 1: look back, this is gonna be a blip that we

393
00:21:28,960 --> 00:21:32,720
Speaker 1: will have forgotten, just like Abola was forgotten. Just like

394
00:21:33,240 --> 00:21:36,080
Speaker 1: you know, zekea I suspect is the next one that

395
00:21:36,240 --> 00:21:39,200
Speaker 1: makes huge headlines and then two years later it's like, oh,

396
00:21:39,200 --> 00:21:42,320
Speaker 1: whatever happened to you know, whatever happened to the chicken flu?

397
00:21:42,440 --> 00:21:44,439
Speaker 1: Wasn't that a big thing that was coming along? And

398
00:21:44,920 --> 00:21:47,800
Speaker 1: so anyway, um, let's so let's talk a little bit

399
00:21:47,840 --> 00:21:52,280
Speaker 1: about Look, how can somebody who's had a good run

400
00:21:52,320 --> 00:21:57,680
Speaker 1: of trades identify the difference between trades that are based

401
00:21:57,720 --> 00:22:01,040
Speaker 1: on skill and just getting lucky in there? Right? You

402
00:22:01,040 --> 00:22:03,400
Speaker 1: can never identify any particularly group of trades whether you're

403
00:22:03,560 --> 00:22:07,080
Speaker 1: just lucky your skill and it's always luck involved. But

404
00:22:07,240 --> 00:22:11,080
Speaker 1: luck is is the longer you go, the less luck

405
00:22:11,119 --> 00:22:13,080
Speaker 1: will win out. In other words, you can you can

406
00:22:13,119 --> 00:22:15,200
Speaker 1: have a streak, have a hot streak for a while,

407
00:22:15,560 --> 00:22:18,080
Speaker 1: and that could last for days, weeks, maybe even months,

408
00:22:18,480 --> 00:22:21,560
Speaker 1: but that's not gonna go on for you, right, So um,

409
00:22:21,680 --> 00:22:24,560
Speaker 1: eventually skill wins. Yeah. And and so if you're kind

410
00:22:24,560 --> 00:22:27,440
Speaker 1: of almost most years a year in, year out, you're

411
00:22:27,520 --> 00:22:29,800
Speaker 1: you're kind of that profitable. You never put your account

412
00:22:29,800 --> 00:22:33,399
Speaker 1: into real danger by allowing a deep draw down. And

413
00:22:34,080 --> 00:22:37,880
Speaker 1: so if if you're doing that, that's probably skilled then

414
00:22:37,960 --> 00:22:41,800
Speaker 1: because luck alone, unless unless I should make a provis

415
00:22:41,880 --> 00:22:44,159
Speaker 1: so you can have more bull markets go on for

416
00:22:44,280 --> 00:22:47,520
Speaker 1: multiple years. So if your approach is just to to

417
00:22:47,840 --> 00:22:51,199
Speaker 1: just go long, uh and stay long, and it's and

418
00:22:51,240 --> 00:22:53,560
Speaker 1: you're making you're doing well, and it's in a bull market,

419
00:22:53,960 --> 00:22:56,080
Speaker 1: all you can assume is you've been long during a

420
00:22:56,119 --> 00:22:58,320
Speaker 1: bull market. You have no idea what's gonna happen when

421
00:22:58,320 --> 00:22:59,920
Speaker 1: you have a bear market. So well, but there is

422
00:23:00,040 --> 00:23:03,320
Speaker 1: some skill to being on the right side. Well it's fine,

423
00:23:03,359 --> 00:23:06,440
Speaker 1: but if you've only been on one side in your trading.

424
00:23:06,480 --> 00:23:08,760
Speaker 1: You know, people saw trading, they saw trading. How many

425
00:23:08,800 --> 00:23:10,639
Speaker 1: people thought they were genius as they saw the trading

426
00:23:10,640 --> 00:23:14,000
Speaker 1: in the right so uh, and they you know, but

427
00:23:14,240 --> 00:23:16,680
Speaker 1: they continue trading through two thousand and two thousand and

428
00:23:16,760 --> 00:23:18,320
Speaker 1: one thinking it was gonna be the same thing. And

429
00:23:18,320 --> 00:23:21,280
Speaker 1: so yeah, they may have doubled their money, tripled their money,

430
00:23:21,320 --> 00:23:24,600
Speaker 1: but then draw down takes care of all of that.

431
00:23:24,720 --> 00:23:27,240
Speaker 1: That that's the famous Buffett quote is when the tide

432
00:23:27,240 --> 00:23:30,320
Speaker 1: goes out, we find out who's been swimming naked. And

433
00:23:30,400 --> 00:23:32,879
Speaker 1: so that that that no doubt about that. You go

434
00:23:33,000 --> 00:23:36,400
Speaker 1: through a full cycle, you find out if you actually yeah,

435
00:23:36,440 --> 00:23:38,760
Speaker 1: so that's that's only you can't tell if anybody is

436
00:23:38,800 --> 00:23:42,720
Speaker 1: good or not, uh without you know, out really seeing

437
00:23:42,760 --> 00:23:45,560
Speaker 1: them through through a bare phase. And actually just to

438
00:23:45,600 --> 00:23:48,880
Speaker 1: criticize myself here, um, there was one I have another

439
00:23:48,920 --> 00:23:51,600
Speaker 1: have A fourth market was a book called stock Market Wizards,

440
00:23:52,160 --> 00:23:55,080
Speaker 1: which I wrote right at the tail it was right

441
00:23:55,119 --> 00:23:57,879
Speaker 1: to turn you know, night late, so really at the

442
00:23:57,960 --> 00:24:00,960
Speaker 1: end of the bull market. Um. And and I was

443
00:24:01,040 --> 00:24:03,040
Speaker 1: specific to make the book different from the other market

444
00:24:03,080 --> 00:24:05,120
Speaker 1: was the books. I took the theme just stock marks.

445
00:24:05,160 --> 00:24:08,760
Speaker 1: I was interviewed only stock traders. So by by definition,

446
00:24:08,800 --> 00:24:10,080
Speaker 1: when I was doing the book, I was doing a

447
00:24:10,080 --> 00:24:12,800
Speaker 1: book of only stock traders right after a long long act.

448
00:24:12,840 --> 00:24:17,520
Speaker 1: Bullmarket was eighty two, right, we both know that. So

449
00:24:18,440 --> 00:24:20,680
Speaker 1: and but I tried. I thought I was taking people

450
00:24:20,680 --> 00:24:23,760
Speaker 1: who you know, also had the control, you know, who

451
00:24:23,760 --> 00:24:26,480
Speaker 1: would who would do okay uh in a bear market?

452
00:24:26,640 --> 00:24:29,720
Speaker 1: And oh would survive? But it turned out that yeah,

453
00:24:29,760 --> 00:24:32,600
Speaker 1: some of them did, but but quite a few didn't.

454
00:24:32,680 --> 00:24:36,800
Speaker 1: And so no, the book is out. The book is out,

455
00:24:37,680 --> 00:24:39,199
Speaker 1: and some of the guy you know, there are some

456
00:24:39,400 --> 00:24:41,480
Speaker 1: there are some famous people in there, like the Shaw

457
00:24:41,600 --> 00:24:45,919
Speaker 1: and and well controversial on Stevie Combe. But regardless of

458
00:24:45,960 --> 00:24:49,040
Speaker 1: what a yeah, regardless of you know, my my thing

459
00:24:49,080 --> 00:24:51,639
Speaker 1: about Steve coolee I I don't know anything more than

460
00:24:51,640 --> 00:24:53,560
Speaker 1: anybody else knows how to reading the press and all

461
00:24:53,600 --> 00:24:55,920
Speaker 1: of that. Uh. I know if that if there was

462
00:24:55,960 --> 00:24:58,560
Speaker 1: anything really obvious, they would have certainly have loved to

463
00:24:58,640 --> 00:25:01,680
Speaker 1: nail him, and they never did. Um. But if people

464
00:25:01,680 --> 00:25:03,840
Speaker 1: want to argue that he made so you know he

465
00:25:03,960 --> 00:25:06,240
Speaker 1: made inside of trades, I don't. I don't know. I

466
00:25:06,240 --> 00:25:08,359
Speaker 1: don't know the question with him, But was there a

467
00:25:08,400 --> 00:25:11,800
Speaker 1: lack of supervision over the pel Well that's that's that's question,

468
00:25:11,960 --> 00:25:14,040
Speaker 1: right right. But so but even if you wanted what

469
00:25:14,080 --> 00:25:15,879
Speaker 1: I'm saying is evening people want to say, hey, you

470
00:25:15,920 --> 00:25:17,720
Speaker 1: know these people work for him. He would have known

471
00:25:17,760 --> 00:25:21,680
Speaker 1: he was, but he there's a guy who does, like god,

472
00:25:22,280 --> 00:25:24,560
Speaker 1: thirty thousand trades a year, who knows why he's half

473
00:25:24,600 --> 00:25:28,480
Speaker 1: the volume and you look at his record. You could

474
00:25:28,560 --> 00:25:30,640
Speaker 1: cut his record in half and you still have one

475
00:25:30,640 --> 00:25:32,840
Speaker 1: of the best records of all time. So you know,

476
00:25:32,920 --> 00:25:34,680
Speaker 1: so what if you if af you trades it doesn't

477
00:25:34,680 --> 00:25:38,879
Speaker 1: make it. It doesn't from him. He is an incredible trader,

478
00:25:38,960 --> 00:25:41,360
Speaker 1: didn't no matter what anybody says. So let me ask

479
00:25:41,359 --> 00:25:44,399
Speaker 1: you one question that I've always found fascinating. And this

480
00:25:44,440 --> 00:25:47,840
Speaker 1: has to be right in your in your sweet spot

481
00:25:48,160 --> 00:25:53,119
Speaker 1: when you talk about skill and luck and psychology. We

482
00:25:53,200 --> 00:25:56,280
Speaker 1: all know traders who are like this. They take credit

483
00:25:56,560 --> 00:25:59,440
Speaker 1: for all the winning trades, but there's always an excuse.

484
00:25:59,480 --> 00:26:04,000
Speaker 1: They're always casting blame on any of the losses. Why

485
00:26:04,119 --> 00:26:06,960
Speaker 1: what's that about. That's well, actually the trader. If trader

486
00:26:07,040 --> 00:26:09,840
Speaker 1: does that, I'll take I'll give you better than even

487
00:26:09,920 --> 00:26:11,880
Speaker 1: I'll give you two to one odds. They're gonna they're

488
00:26:11,880 --> 00:26:13,960
Speaker 1: gonna they're gonna fail. They're gonna blow up, They're gonna

489
00:26:13,960 --> 00:26:16,240
Speaker 1: blow there. They're gonna fail anybody. And that's when I

490
00:26:16,359 --> 00:26:20,000
Speaker 1: talk about trades. I mean, any decent trader will admit

491
00:26:20,600 --> 00:26:23,240
Speaker 1: that it's his, you know, or hard fault, who pull

492
00:26:23,320 --> 00:26:25,960
Speaker 1: the trigger, whose fingers were right? And and and the

493
00:26:26,000 --> 00:26:28,000
Speaker 1: bad luck comes into it all the time. I can't

494
00:26:28,040 --> 00:26:31,040
Speaker 1: tell you how many times I get, oh, the other thing,

495
00:26:31,200 --> 00:26:33,320
Speaker 1: the one for the last week, I uh, it was

496
00:26:33,359 --> 00:26:36,320
Speaker 1: like a coco trade, and uh, I kind of picked

497
00:26:36,320 --> 00:26:37,800
Speaker 1: my and one of my one of my types of

498
00:26:37,800 --> 00:26:41,800
Speaker 1: trade is I'd like to buy markets um counter trend

499
00:26:42,240 --> 00:26:46,119
Speaker 1: uh at spots where I think that they'll they'll be

500
00:26:46,160 --> 00:26:50,159
Speaker 1: sold sold out, aboard out or whatever risk reward and

501
00:26:51,640 --> 00:26:53,960
Speaker 1: or you get a bounced dealing exactly. And so my

502
00:26:54,040 --> 00:26:56,280
Speaker 1: my er, my order rests there, and I have a

503
00:26:56,320 --> 00:26:59,240
Speaker 1: stop that dress there. So one morning, well you know,

504
00:26:59,560 --> 00:27:01,880
Speaker 1: I like up and I look at the trades, and boy,

505
00:27:01,920 --> 00:27:04,439
Speaker 1: I'm in and out of the coco trade um. And

506
00:27:04,480 --> 00:27:08,359
Speaker 1: this was the one day was like bizarre. It was like,

507
00:27:08,440 --> 00:27:10,679
Speaker 1: you know, the market that day, don't even know if

508
00:27:10,680 --> 00:27:12,480
Speaker 1: there was any news, but it traded like about twenty

509
00:27:12,520 --> 00:27:14,560
Speaker 1: times the range of normally trades. And I remember that

510
00:27:14,600 --> 00:27:16,240
Speaker 1: one day and its spiked down in one minute. I

511
00:27:16,240 --> 00:27:18,080
Speaker 1: don't even know if there was any news. It spiked

512
00:27:18,080 --> 00:27:20,399
Speaker 1: down a few under points in one minute. My so

513
00:27:20,520 --> 00:27:22,439
Speaker 1: here I get in, which would have been I think

514
00:27:22,480 --> 00:27:26,720
Speaker 1: a great entry. But then like and within one minute's time,

515
00:27:26,760 --> 00:27:29,320
Speaker 1: I think, you know, within seconds, it's like ticks down

516
00:27:29,400 --> 00:27:31,399
Speaker 1: sort of like three ticks. You know, I had two

517
00:27:31,480 --> 00:27:33,760
Speaker 1: stops when you know one is it like right almost

518
00:27:33,720 --> 00:27:35,760
Speaker 1: at a low one thing but like a second apart

519
00:27:35,840 --> 00:27:37,600
Speaker 1: or whatever. And then it goes right back up again.

520
00:27:37,640 --> 00:27:40,000
Speaker 1: So sure you could say that's bad luck. And maybe

521
00:27:40,040 --> 00:27:43,000
Speaker 1: you know that trade I think was bad luck. But

522
00:27:43,000 --> 00:27:45,880
Speaker 1: that does make a difference. The point is, over time, Uh,

523
00:27:45,920 --> 00:27:47,800
Speaker 1: it should make any difference, because I'll have good luck

524
00:27:47,800 --> 00:27:50,240
Speaker 1: to you know, just the bad ones. You really notice

525
00:27:50,320 --> 00:27:52,600
Speaker 1: the good ones, you figure the good ones. You're small

526
00:27:52,640 --> 00:27:54,280
Speaker 1: on on the bad ones of bad luck. Right, So

527
00:27:54,720 --> 00:27:56,600
Speaker 1: in the old days I would have blamed the specialist

528
00:27:56,640 --> 00:27:59,640
Speaker 1: for I don't know if we could do that. I'm

529
00:27:59,760 --> 00:28:03,560
Speaker 1: very hults. You're listening to Masters in Business on Bloomberg Radio.

530
00:28:04,000 --> 00:28:07,800
Speaker 1: My special guest today is Jack Schweger. He is the

531
00:28:07,840 --> 00:28:11,560
Speaker 1: author of the Market Wizards series of books, as well

532
00:28:11,600 --> 00:28:15,359
Speaker 1: as a number of books on futures trading and technical training. Uh.

533
00:28:15,400 --> 00:28:19,639
Speaker 1: He's also has been a trader for for several decades.

534
00:28:20,160 --> 00:28:22,399
Speaker 1: You know, the last time you were visiting us, you

535
00:28:22,440 --> 00:28:26,800
Speaker 1: were just in the process of launching a company called

536
00:28:26,920 --> 00:28:30,720
Speaker 1: fund Seeder, and you're using some technology to try to

537
00:28:30,840 --> 00:28:36,160
Speaker 1: identify the new emerging traders that are coming up through

538
00:28:36,200 --> 00:28:39,040
Speaker 1: the ranks. Tell us a little bit about about how

539
00:28:39,080 --> 00:28:42,680
Speaker 1: this works. Sure, so the concept of fund Seeder is

540
00:28:42,800 --> 00:28:46,400
Speaker 1: globally now, not just the US or industrialized nations. There

541
00:28:46,440 --> 00:28:49,160
Speaker 1: are there are just who knows how many hundreds of

542
00:28:49,240 --> 00:28:52,040
Speaker 1: thousands of millions of traders. Now most of them are

543
00:28:52,040 --> 00:28:54,480
Speaker 1: not gonna be any good, but you don't need You

544
00:28:54,520 --> 00:28:57,440
Speaker 1: only need a tiny fraction of one percent that are good.

545
00:28:57,480 --> 00:29:00,840
Speaker 1: And that's a realistic expectation. But don't have it. They'll

546
00:29:00,840 --> 00:29:02,920
Speaker 1: never be discovered. They might be in countries where there's

547
00:29:02,920 --> 00:29:07,600
Speaker 1: no no real place for no institutional infrastructure exactly. Yeah,

548
00:29:07,600 --> 00:29:09,400
Speaker 1: you've got people. Let's say you got a mathematician in

549
00:29:09,440 --> 00:29:11,200
Speaker 1: East and Europe. Let's say right comes up with a

550
00:29:11,280 --> 00:29:13,840
Speaker 1: great algorithm and making money on markets. It doesn't have

551
00:29:13,920 --> 00:29:16,040
Speaker 1: much money to trade. Nobody will discover them, nobody will

552
00:29:16,040 --> 00:29:19,960
Speaker 1: speak to him. So you know, our idea was create

553
00:29:20,040 --> 00:29:23,480
Speaker 1: a central spot on the web where traders could go

554
00:29:23,800 --> 00:29:28,280
Speaker 1: get their track records verified on daily data and by verified,

555
00:29:28,560 --> 00:29:31,600
Speaker 1: verified by because the track records and the numbers come

556
00:29:31,640 --> 00:29:34,200
Speaker 1: not from the traders, but they come directly by linking

557
00:29:34,240 --> 00:29:36,880
Speaker 1: their account from their custodians. Yeah, it's from the broker.

558
00:29:37,160 --> 00:29:39,440
Speaker 1: So so we're getting downloads direct of course with the

559
00:29:39,520 --> 00:29:42,400
Speaker 1: traders or for rization, we're getting downloads of the daily results.

560
00:29:42,480 --> 00:29:44,160
Speaker 1: So so let me, let me stop you right there.

561
00:29:44,240 --> 00:29:46,680
Speaker 1: I know that when guys are launching hedge funds or

562
00:29:46,680 --> 00:29:50,600
Speaker 1: any sort of proprietary trading operation, the first question that

563
00:29:50,760 --> 00:29:55,320
Speaker 1: gets asked is show me your ordered returns. This really

564
00:29:55,440 --> 00:29:58,280
Speaker 1: is a way to say without spending tens of thousand

565
00:29:58,360 --> 00:30:01,680
Speaker 1: dollars on audits and with out going through the whole

566
00:30:02,680 --> 00:30:05,520
Speaker 1: process which could be thirty or fifty or a hundred

567
00:30:05,600 --> 00:30:08,480
Speaker 1: thousand dollars to tee up a fund, this at least

568
00:30:08,560 --> 00:30:11,840
Speaker 1: gives you a way to rank different traders on their

569
00:30:12,600 --> 00:30:16,120
Speaker 1: at least recent performance. Yeah, or actually as depending on

570
00:30:16,240 --> 00:30:19,280
Speaker 1: what broker, could be their entire performance. Uh. But it's

571
00:30:19,320 --> 00:30:21,560
Speaker 1: not mentor as replacement for a lot, but it is

572
00:30:21,680 --> 00:30:25,480
Speaker 1: meant as getting really numbers we believe are probably quite true.

573
00:30:25,640 --> 00:30:28,560
Speaker 1: It's an initial screens initial screening, right, So before this,

574
00:30:28,760 --> 00:30:32,160
Speaker 1: how would any of these people ever be found? They

575
00:30:32,240 --> 00:30:34,640
Speaker 1: were seen? They wouldn't. I mean they wouldn't. And that's

576
00:30:34,680 --> 00:30:37,240
Speaker 1: why I mean, I think, what is like something like

577
00:30:37,320 --> 00:30:42,040
Speaker 1: six or eighty um plus billion dollar funds controls sort

578
00:30:42,080 --> 00:30:47,880
Speaker 1: of of the I think the numbers like any it's

579
00:30:47,880 --> 00:30:51,960
Speaker 1: a very I mean, it's just super and it gets

580
00:30:52,040 --> 00:30:54,640
Speaker 1: more and more concentrated seams over the years. So we

581
00:30:54,760 --> 00:30:57,680
Speaker 1: live in a world where big money, all the instance,

582
00:30:57,880 --> 00:31:00,360
Speaker 1: tuial money goes to the same big traders, and everybody

583
00:31:00,400 --> 00:31:02,480
Speaker 1: else has sort of left out of it. Robert Frankl's

584
00:31:02,560 --> 00:31:06,040
Speaker 1: this the winner take All society, And uh, it's true

585
00:31:06,240 --> 00:31:09,200
Speaker 1: about movies. It's true about you know, there's a handful

586
00:31:09,240 --> 00:31:11,880
Speaker 1: of superstar musicians and then everybody and we're trying to

587
00:31:11,920 --> 00:31:13,800
Speaker 1: swim in the other direction. Our our though, it is

588
00:31:13,920 --> 00:31:15,400
Speaker 1: is a lot of talent out there that just has

589
00:31:15,480 --> 00:31:17,720
Speaker 1: no way of getting found. If we provide a venue

590
00:31:17,760 --> 00:31:21,440
Speaker 1: where they can be found discovered, then we can utilize

591
00:31:21,480 --> 00:31:25,280
Speaker 1: that database to uh even introduce them to invest So

592
00:31:25,440 --> 00:31:28,400
Speaker 1: that on one side is fun suitor technology. So this

593
00:31:28,600 --> 00:31:30,680
Speaker 1: is how you you're screening for these people? Well yeah,

594
00:31:30,720 --> 00:31:32,239
Speaker 1: and what what what fun see? The technology The main

595
00:31:32,280 --> 00:31:35,000
Speaker 1: technology there is it's a platform for traders traders. First

596
00:31:35,000 --> 00:31:36,720
Speaker 1: of all, it's the link you know, traders can get

597
00:31:36,760 --> 00:31:39,440
Speaker 1: their track records linked through the broker and getting verified

598
00:31:39,560 --> 00:31:42,440
Speaker 1: daily record. But then it does nice neat stuff which

599
00:31:43,080 --> 00:31:45,520
Speaker 1: like a trader would love to see a daily equity curve,

600
00:31:45,760 --> 00:31:47,360
Speaker 1: it's let be very difficult to get. I don't know

601
00:31:47,360 --> 00:31:49,640
Speaker 1: if any brokers that have daily equity curves, and and

602
00:31:50,120 --> 00:31:51,920
Speaker 1: I find what that is because I'm when I think

603
00:31:51,960 --> 00:31:54,840
Speaker 1: here curve, I'm thinking yield curve. No, No, so your

604
00:31:54,880 --> 00:31:57,320
Speaker 1: equity day by day, you know, you think simply he's

605
00:31:57,320 --> 00:31:59,240
Speaker 1: trying to start off a hundred thousand, you make five thousand,

606
00:31:59,320 --> 00:32:01,320
Speaker 1: got a hundred five, you lose seven, you got ninety eight?

607
00:32:01,720 --> 00:32:04,320
Speaker 1: That track record over time? What does it look like?

608
00:32:04,440 --> 00:32:09,080
Speaker 1: You know? So HOPEFU up the right right, but when

609
00:32:09,080 --> 00:32:10,960
Speaker 1: are you starting to deviate comm you know on pattern?

610
00:32:11,120 --> 00:32:13,000
Speaker 1: What what does it look like over time? What are

611
00:32:13,040 --> 00:32:14,800
Speaker 1: the what are the average or what are the We

612
00:32:15,040 --> 00:32:17,320
Speaker 1: have all sorts of analytics on that. So but just

613
00:32:17,440 --> 00:32:19,400
Speaker 1: to saw the basic equicur of just to be able

614
00:32:19,440 --> 00:32:22,880
Speaker 1: to see how your equity is fluctuating over time itself

615
00:32:23,000 --> 00:32:25,600
Speaker 1: is a really good important thing to have. So that

616
00:32:25,880 --> 00:32:30,560
Speaker 1: that's the find these obscure and unknown that's what they get. Well,

617
00:32:30,600 --> 00:32:31,920
Speaker 1: that's what they create, and then they can do all

618
00:32:31,920 --> 00:32:34,440
Speaker 1: sorts e finality, they can create underwater curves. Also the stats,

619
00:32:34,720 --> 00:32:37,640
Speaker 1: all sorts of studies like what happens like you could

620
00:32:37,680 --> 00:32:40,040
Speaker 1: apply moving averages, let the cross over moving average your

621
00:32:40,040 --> 00:32:42,120
Speaker 1: equity curve and say what would have happened if every

622
00:32:42,160 --> 00:32:45,600
Speaker 1: time there's a tenant forty moving average cross down, I

623
00:32:45,720 --> 00:32:47,840
Speaker 1: stopped trading and I didn't start until the cross stop

624
00:32:47,960 --> 00:32:50,000
Speaker 1: questions like that. So that that stuff is there and

625
00:32:50,080 --> 00:32:52,360
Speaker 1: it's free. So let's take the flips oute of this.

626
00:32:52,680 --> 00:32:57,200
Speaker 1: What is okay? So we can't do any investment on

627
00:32:57,280 --> 00:33:00,440
Speaker 1: that for compliance reason and all that. You know. So

628
00:33:00,720 --> 00:33:03,480
Speaker 1: we have a separate company called fund Seeder Investments, which

629
00:33:03,640 --> 00:33:07,360
Speaker 1: will use the database created on fund seater Technologies, which

630
00:33:07,440 --> 00:33:10,080
Speaker 1: is the fund seater dot com side is fund Seater Technologies,

631
00:33:10,720 --> 00:33:14,240
Speaker 1: and we'll find the you know, by ranking, by searching.

632
00:33:14,280 --> 00:33:16,080
Speaker 1: We got search fielders and all that will find the

633
00:33:16,160 --> 00:33:19,720
Speaker 1: best traders. Those traders we that we leave have potential.

634
00:33:20,120 --> 00:33:22,600
Speaker 1: We may have investors who are looking for certain types

635
00:33:22,600 --> 00:33:25,640
Speaker 1: of traders. We can play the introductory role or one

636
00:33:25,680 --> 00:33:27,360
Speaker 1: of one. One of our plans is hopefully by next

637
00:33:27,440 --> 00:33:30,120
Speaker 1: year we'll have an emerging manager fund and so we'll

638
00:33:30,160 --> 00:33:32,880
Speaker 1: take a bunch of these guys and gals and put

639
00:33:32,960 --> 00:33:35,480
Speaker 1: them into one fund and UH and also create a

640
00:33:35,520 --> 00:33:38,040
Speaker 1: fund and this is important. Our our plan right now

641
00:33:38,680 --> 00:33:40,840
Speaker 1: is to create a fund that also is much fairer

642
00:33:40,880 --> 00:33:43,920
Speaker 1: to investors because as you're being part of this is

643
00:33:43,960 --> 00:33:48,200
Speaker 1: this industry. No, it's you know, it's heads head's eye win,

644
00:33:48,680 --> 00:33:53,000
Speaker 1: tails you lose, you know, I mean it's like you can't.

645
00:33:53,040 --> 00:33:55,520
Speaker 1: The trader, no matter what happens, always has a free call.

646
00:33:55,680 --> 00:33:59,120
Speaker 1: I'm Barry rid Hilts. You're listening to Masters in Business

647
00:33:59,240 --> 00:34:03,360
Speaker 1: on Bloomberg Radio. My special guest today is author and

648
00:34:03,480 --> 00:34:08,160
Speaker 1: trader Jack schweger Uh, author of the famous Market Wizards

649
00:34:08,360 --> 00:34:12,279
Speaker 1: series of books. So let's let's go back to those

650
00:34:12,400 --> 00:34:16,080
Speaker 1: three books or four books. And I wanted to ask

651
00:34:16,600 --> 00:34:19,399
Speaker 1: you mentioned the idea came to you because you really

652
00:34:19,440 --> 00:34:22,600
Speaker 1: just wanted to chat with some traders and maybe maybe

653
00:34:22,719 --> 00:34:28,200
Speaker 1: learn some stuff. Um. The response had to be really tremendous.

654
00:34:28,680 --> 00:34:33,080
Speaker 1: Were you surprised at how well received the books became? Yes? Yes,

655
00:34:33,200 --> 00:34:34,920
Speaker 1: And but it always sounds a little bit kind of

656
00:34:35,160 --> 00:34:37,719
Speaker 1: conceder what I did when I wrote the book I

657
00:34:38,239 --> 00:34:41,560
Speaker 1: mentioned like Reminiscences of a Stock Operator originally right, Um,

658
00:34:41,960 --> 00:34:44,840
Speaker 1: I did. I did have a goal of doing a

659
00:34:44,960 --> 00:34:48,200
Speaker 1: modern day version over my formats totally different, But I didn't.

660
00:34:49,040 --> 00:34:51,560
Speaker 1: The thing I had in mind is I was reading Reminiscences,

661
00:34:51,600 --> 00:34:54,080
Speaker 1: which I've always the best book on trading that I

662
00:34:54,239 --> 00:34:57,000
Speaker 1: ever you know read. Um, I was reading at sixty

663
00:34:57,040 --> 00:34:59,000
Speaker 1: five years after his publication day, and it was still

664
00:34:59,120 --> 00:35:02,000
Speaker 1: totally reliant even though the market today, Yeah that is

665
00:35:02,080 --> 00:35:05,000
Speaker 1: today is too right. So my goal was to do

666
00:35:05,120 --> 00:35:08,480
Speaker 1: a book that hopefully in sixty five years from then,

667
00:35:08,560 --> 00:35:10,239
Speaker 1: you know, people would still be reading because it's still

668
00:35:10,239 --> 00:35:13,680
Speaker 1: totally relevant. So that was my goal. Uh, the fact that, yeah,

669
00:35:13,880 --> 00:35:15,640
Speaker 1: you had to feel like as you were working your

670
00:35:15,680 --> 00:35:18,520
Speaker 1: way through it and and re editing it and rereading it,

671
00:35:19,000 --> 00:35:21,040
Speaker 1: you know, you you had to be hey, this stuff

672
00:35:21,120 --> 00:35:22,960
Speaker 1: is pretty I thought, well yeah, and and and to

673
00:35:23,239 --> 00:35:26,440
Speaker 1: that the editing part is interesting and you maybe appreciate it. Um.

674
00:35:26,840 --> 00:35:29,480
Speaker 1: You know, people sometimes think, hey, one comment I get

675
00:35:29,680 --> 00:35:31,759
Speaker 1: is for you know, you're you're a great interview you know,

676
00:35:31,880 --> 00:35:33,959
Speaker 1: you're a great interviewer. You know you really ask great questions.

677
00:35:34,000 --> 00:35:36,400
Speaker 1: You're really you know, and I say, no, I'm not

678
00:35:36,600 --> 00:35:38,920
Speaker 1: a great interviewer. When I'm what I am is I'm

679
00:35:38,920 --> 00:35:42,600
Speaker 1: a really great editor because I because I got like,

680
00:35:43,120 --> 00:35:44,719
Speaker 1: you know, I have like ten or twenty times and

681
00:35:44,800 --> 00:35:48,440
Speaker 1: material I actually used for the book. And not only that, Um,

682
00:35:49,480 --> 00:35:50,800
Speaker 1: you know a lot of times you have these guys,

683
00:35:50,800 --> 00:35:52,800
Speaker 1: you know, you get conversations people go off from tangents,

684
00:35:52,840 --> 00:35:56,120
Speaker 1: and it works well in this type of format, right,

685
00:35:56,239 --> 00:35:58,000
Speaker 1: It's okay, you don't notice it because that's the way

686
00:35:58,000 --> 00:36:00,760
Speaker 1: we speak. But in a written in a written format,

687
00:36:00,840 --> 00:36:04,200
Speaker 1: if you if I did verbatim of what everybody said,

688
00:36:04,960 --> 00:36:10,160
Speaker 1: it would sound deliterate, confusing, boring, you know. So my goal,

689
00:36:10,400 --> 00:36:12,719
Speaker 1: and a journalist, I guess the journalist goal is, would

690
00:36:12,719 --> 00:36:15,840
Speaker 1: be exactly word for word accurate. My goal was to

691
00:36:15,960 --> 00:36:18,640
Speaker 1: be as accurate to the truth that I could. So

692
00:36:18,719 --> 00:36:20,920
Speaker 1: if I if a trader was like going somewhere, it

693
00:36:20,920 --> 00:36:23,080
Speaker 1: didn't finish the point. I knew what he was going

694
00:36:23,120 --> 00:36:25,279
Speaker 1: to make the point, I would finish the point. But

695
00:36:25,360 --> 00:36:27,319
Speaker 1: of course the traders I get. Let the traders read

696
00:36:27,360 --> 00:36:29,000
Speaker 1: the end of product, and they always so they actually

697
00:36:29,040 --> 00:36:32,279
Speaker 1: reviewed and said, well, the words, well, they never even

698
00:36:32,320 --> 00:36:35,480
Speaker 1: knew I changed I mean anything, you know. They what

699
00:36:35,560 --> 00:36:37,200
Speaker 1: I was trying to do was get as close to

700
00:36:37,280 --> 00:36:40,240
Speaker 1: what they were trying to say in a most readable form,

701
00:36:40,680 --> 00:36:43,520
Speaker 1: throwing out the stuff that was didn't have anything to say.

702
00:36:43,560 --> 00:36:46,800
Speaker 1: And I was boring and and keeping the best parts

703
00:36:46,880 --> 00:36:50,040
Speaker 1: and and reshuffling it so it's flowed so you don't

704
00:36:50,120 --> 00:36:52,880
Speaker 1: discuss the same thing in eighteen different spots. And but

705
00:36:53,040 --> 00:36:55,640
Speaker 1: it was all It was a combination of trying to

706
00:36:55,680 --> 00:36:58,120
Speaker 1: be as true as possible to what they were communicating

707
00:36:58,239 --> 00:37:00,920
Speaker 1: while making it as readable as possib so trying to

708
00:37:01,080 --> 00:37:03,000
Speaker 1: really serve both purposes. And that was that was what

709
00:37:03,080 --> 00:37:05,520
Speaker 1: I was trying to do. And nobody ever thought that

710
00:37:05,600 --> 00:37:07,560
Speaker 1: I had changed. I don't think they ever realized that.

711
00:37:07,960 --> 00:37:10,360
Speaker 1: They probably thought it was verbat him because that's what

712
00:37:10,440 --> 00:37:12,960
Speaker 1: I was just pretty close to. It was what they

713
00:37:13,040 --> 00:37:16,080
Speaker 1: hoped for being a Yeah. So, so, over the course

714
00:37:16,120 --> 00:37:19,800
Speaker 1: of the fore Market Wizards books, did you notice anything

715
00:37:19,880 --> 00:37:22,560
Speaker 1: that had changed in the world and in the markets

716
00:37:23,040 --> 00:37:25,880
Speaker 1: or was it the focus just simply in a different

717
00:37:25,920 --> 00:37:29,480
Speaker 1: aspect of of in the world. The world marks to change.

718
00:37:29,520 --> 00:37:31,680
Speaker 1: For one thing, I had like people who had floor

719
00:37:31,760 --> 00:37:34,200
Speaker 1: trading experience, and some of the most colorful stories, and

720
00:37:34,560 --> 00:37:36,920
Speaker 1: in Market Wizards come you know, like Paul tr To

721
00:37:37,000 --> 00:37:38,960
Speaker 1: Jones with the trade that almost blew them out of business.

722
00:37:39,040 --> 00:37:41,680
Speaker 1: You know where we he puts on a trade way

723
00:37:41,719 --> 00:37:44,080
Speaker 1: too large, and and it's in a cotton pit, and

724
00:37:44,560 --> 00:37:47,040
Speaker 1: and that the broker who almost kills himself trying to

725
00:37:47,120 --> 00:37:50,319
Speaker 1: get to the the opposite side of the order. Has

726
00:37:50,400 --> 00:37:52,960
Speaker 1: they is they broken? For the merchant that owns all

727
00:37:53,000 --> 00:37:55,400
Speaker 1: of the Liberals supply, and Paul knows he's dead in

728
00:37:55,440 --> 00:37:57,800
Speaker 1: the water and he really almost completely wiped out in

729
00:37:57,840 --> 00:38:00,279
Speaker 1: a trade. But stories like that, those couldn't not more

730
00:38:00,280 --> 00:38:03,120
Speaker 1: because the floors don't exist anymore. So those things change.

731
00:38:03,600 --> 00:38:07,600
Speaker 1: But but the realities and what what makes trading successful

732
00:38:07,640 --> 00:38:11,839
Speaker 1: and not successful, those things happened. So last question before

733
00:38:11,880 --> 00:38:14,200
Speaker 1: we get into some of the specific trades that are

734
00:38:14,280 --> 00:38:19,560
Speaker 1: so fascinating. Um it has to be just tremendously gratifying

735
00:38:19,680 --> 00:38:22,560
Speaker 1: to see how successful the books have comes you do

736
00:38:22,640 --> 00:38:24,799
Speaker 1: you ever stop and say, I never in a million

737
00:38:24,880 --> 00:38:26,920
Speaker 1: years expected this that. Yeah, I guess I didn't think

738
00:38:27,040 --> 00:38:30,000
Speaker 1: that far. I like, I say, the fact that the

739
00:38:30,120 --> 00:38:32,120
Speaker 1: visual market was is now is going on, I don't

740
00:38:32,120 --> 00:38:38,239
Speaker 1: know twenty Uh, well it was past. It's well eight

741
00:38:38,440 --> 00:38:40,560
Speaker 1: and two years we will be eight now, something like

742
00:38:40,600 --> 00:38:43,960
Speaker 1: twenty eight years since I wrote it. So um, so

743
00:38:44,160 --> 00:38:46,520
Speaker 1: that is really was like the goal I was trying

744
00:38:46,600 --> 00:38:49,960
Speaker 1: to reach, and my surprise, I don't know, maybe I was.

745
00:38:50,160 --> 00:38:52,920
Speaker 1: Maybe I was didn't realize how difficult, how difficult that

746
00:38:52,960 --> 00:38:55,520
Speaker 1: should be, but it, uh, it was what I was

747
00:38:55,560 --> 00:38:58,880
Speaker 1: trying to achieve. So let's talk about a few specific

748
00:38:58,960 --> 00:39:03,080
Speaker 1: traders who I find to be uh fascinating. Um ed,

749
00:39:03,600 --> 00:39:06,480
Speaker 1: I want to pronounce his name Dakota. Dakota. So he

750
00:39:06,520 --> 00:39:09,320
Speaker 1: says he doesn't trust publish his track record, but he

751
00:39:09,480 --> 00:39:13,200
Speaker 1: was rumored to have started with five thousand dollars and

752
00:39:13,480 --> 00:39:15,840
Speaker 1: turned it into tens of millions of dollars. Yeah. So,

753
00:39:16,160 --> 00:39:18,600
Speaker 1: so here's the thing with Sakoda. Um And this is

754
00:39:18,640 --> 00:39:20,880
Speaker 1: the thing. I try to verify people as much as

755
00:39:20,880 --> 00:39:22,719
Speaker 1: I can in any ways you can, but sometimes you're

756
00:39:22,719 --> 00:39:24,840
Speaker 1: you're dealing with people that are just probably not managing

757
00:39:25,080 --> 00:39:28,320
Speaker 1: people's money that you're lucky to get them to interview. Now, Sakoda,

758
00:39:29,719 --> 00:39:31,800
Speaker 1: his name came up because I didn't know who he was.

759
00:39:32,480 --> 00:39:35,560
Speaker 1: I had interviewed Michael Marcus, who I knew personally mentioned

760
00:39:36,000 --> 00:39:38,919
Speaker 1: and just so people have context, Michael Mark, we're talking

761
00:39:38,920 --> 00:39:41,400
Speaker 1: about a guy that Commodity Scope, which used to be

762
00:39:41,440 --> 00:39:42,920
Speaker 1: a different type of firm, but they were like a

763
00:39:43,000 --> 00:39:47,359
Speaker 1: prop trading firm, future traders. Uh. They gave Michael thirty

764
00:39:47,400 --> 00:39:49,880
Speaker 1: thou dollar account and about a dozen years later that

765
00:39:50,120 --> 00:39:52,520
Speaker 1: that account was worth eighty million, and that was with

766
00:39:52,640 --> 00:39:56,040
Speaker 1: them taking out like a year for expenses. Uh. So

767
00:39:56,440 --> 00:39:59,560
Speaker 1: I just the normally that track. He had a string

768
00:39:59,600 --> 00:40:02,760
Speaker 1: of year Marcus. Yeah, Michael Mark said triple digit returns

769
00:40:02,880 --> 00:40:05,120
Speaker 1: for you know, he might have had a quadruple digit

770
00:40:05,280 --> 00:40:08,560
Speaker 1: I mean he had he had just astounding, He did astounding.

771
00:40:09,160 --> 00:40:11,960
Speaker 1: That was all all. This was all futures, and this

772
00:40:12,120 --> 00:40:14,920
Speaker 1: was in the seventies and early eighties and these markets

773
00:40:14,960 --> 00:40:17,680
Speaker 1: were just but he he knew how to He just

774
00:40:17,800 --> 00:40:19,360
Speaker 1: knew how to exploit that type of market and so

775
00:40:19,480 --> 00:40:21,920
Speaker 1: he built a fortune in that period. But when I

776
00:40:22,000 --> 00:40:25,400
Speaker 1: interviewed him, he said, you know, he should speak, and

777
00:40:25,480 --> 00:40:27,359
Speaker 1: he didn't. He didn't want to do the interview because

778
00:40:27,360 --> 00:40:29,120
Speaker 1: he's a very very private person. He's never done another

779
00:40:29,160 --> 00:40:33,120
Speaker 1: interview as far as I know. Uh yeah, he nobody

780
00:40:33,160 --> 00:40:35,840
Speaker 1: would have known who he is. He's very shy, very quiet,

781
00:40:35,960 --> 00:40:39,160
Speaker 1: very photos Uh yeah, that doesn't give any talks, doesn't Yeah.

782
00:40:39,360 --> 00:40:41,160
Speaker 1: I don't think you'll find a photo of him. Uh

783
00:40:41,280 --> 00:40:44,680
Speaker 1: So that's Michael Marcus. And he agreed reluctantly and only

784
00:40:44,719 --> 00:40:46,960
Speaker 1: through the intervention of a mutual friend to do the interview,

785
00:40:47,200 --> 00:40:49,839
Speaker 1: and I flew out the Malibudha interview him, spent the day,

786
00:40:50,120 --> 00:40:52,040
Speaker 1: spent two days at his house, and the day we

787
00:40:52,080 --> 00:40:54,239
Speaker 1: did the full interviews all over the on the beach

788
00:40:54,280 --> 00:40:57,000
Speaker 1: and walking and sitting and whatever. You recording it, are

789
00:40:58,000 --> 00:41:00,160
Speaker 1: recording it? Yeah, oh yeah, yeah, you know every mean

790
00:41:00,680 --> 00:41:04,640
Speaker 1: I had two recorders. I didn't take any chances. And uh, anyway,

791
00:41:04,640 --> 00:41:06,919
Speaker 1: at the end of dinner, which cooked by his ship,

792
00:41:07,000 --> 00:41:10,040
Speaker 1: you know, his his in house chef, and and uh

793
00:41:10,160 --> 00:41:12,719
Speaker 1: he puts pull push us back the chair, and he says,

794
00:41:12,800 --> 00:41:15,239
Speaker 1: you know, you know this wasn't half bad. This was

795
00:41:15,320 --> 00:41:17,680
Speaker 1: kind of a cathodic experience. You know, I kind of

796
00:41:17,760 --> 00:41:20,239
Speaker 1: find the found that much of that strong praise from

797
00:41:20,640 --> 00:41:25,279
Speaker 1: not half bad. So he was the one who said,

798
00:41:25,280 --> 00:41:27,200
Speaker 1: then you too, you know you should didn't the view,

799
00:41:27,200 --> 00:41:29,919
Speaker 1: you shouldn't use Sakoda be courts. Dakota is the best

800
00:41:30,000 --> 00:41:32,879
Speaker 1: trader I know. Really, so this is a guy that turns.

801
00:41:32,960 --> 00:41:36,040
Speaker 1: Coming from a rock star, he turns so so I

802
00:41:36,160 --> 00:41:38,239
Speaker 1: know sa Coda is the real thing, because I know

803
00:41:38,440 --> 00:41:40,520
Speaker 1: this guy I worked to come out in his corps.

804
00:41:40,520 --> 00:41:43,279
Speaker 1: I know he's real. I know he did this amazing sting.

805
00:41:43,440 --> 00:41:46,160
Speaker 1: And and Michael Marcus not only that, he Michael Marcus

806
00:41:46,280 --> 00:41:50,120
Speaker 1: hired Covenor and was you know Covernor worked with you

807
00:41:50,160 --> 00:41:53,400
Speaker 1: know that was that was Marcus protege Covenan had his

808
00:41:53,480 --> 00:41:57,400
Speaker 1: own style. And and Caxton, you know, getting one of

809
00:41:57,440 --> 00:42:00,759
Speaker 1: the greatest traders of modern times. You know he can

810
00:42:00,960 --> 00:42:03,000
Speaker 1: that that and and so just to give you an idea,

811
00:42:03,040 --> 00:42:05,080
Speaker 1: so so Mark, So somebody like Marcus is telling you

812
00:42:05,480 --> 00:42:08,879
Speaker 1: about the best trading he knows. Um, you know, means

813
00:42:09,080 --> 00:42:12,400
Speaker 1: that's real, that's real. Yeah. And was it like with Sakoda?

814
00:42:12,880 --> 00:42:16,560
Speaker 1: How Sakoda is a very odd character, very very kind

815
00:42:16,600 --> 00:42:20,400
Speaker 1: of galactic. If you could use that as a colorful.

816
00:42:20,480 --> 00:42:22,239
Speaker 1: He'd like to free He had all he had a

817
00:42:22,320 --> 00:42:25,480
Speaker 1: phrase for everything, you know. So I noticed, like I

818
00:42:25,560 --> 00:42:27,560
Speaker 1: was there and I said, you know, hey, I noticed

819
00:42:27,600 --> 00:42:30,680
Speaker 1: you don't have a quote machine on your desk. And

820
00:42:30,800 --> 00:42:32,920
Speaker 1: he said, he said, having a coute machine in your

821
00:42:33,000 --> 00:42:35,839
Speaker 1: desk is like having a slot machine on your desk

822
00:42:35,880 --> 00:42:38,960
Speaker 1: and the feeding ofod quarters all day. So his idea

823
00:42:39,080 --> 00:42:40,920
Speaker 1: was he picks his trades. You know, he did a

824
00:42:40,960 --> 00:42:43,120
Speaker 1: sustematically he put it in, he doesn't want to watch it,

825
00:42:43,120 --> 00:42:44,759
Speaker 1: doesn't want to be he doesn't want to be enticed

826
00:42:44,800 --> 00:42:46,680
Speaker 1: by the market to do stuff that's outside of what

827
00:42:46,800 --> 00:42:50,640
Speaker 1: the approaches. So the noise uh in the background is

828
00:42:50,920 --> 00:42:54,279
Speaker 1: can be compelling and attractive and he basically, so I'm

829
00:42:54,280 --> 00:42:56,759
Speaker 1: gonna assume no TVs in his office? Well no, and

830
00:42:56,800 --> 00:42:58,560
Speaker 1: then this is back into this is what we did

831
00:42:58,640 --> 00:43:00,840
Speaker 1: this in the eighties he off to TVs and stuff,

832
00:43:00,840 --> 00:43:02,200
Speaker 1: but it was it wasn't as prevalent to have the

833
00:43:02,239 --> 00:43:06,000
Speaker 1: big screens and all that. How about Marty Schwartz, Schwartz was, Yeah,

834
00:43:06,160 --> 00:43:09,720
Speaker 1: he was very intense. Schwartz is a very intense guy. Schwartz,

835
00:43:09,800 --> 00:43:12,160
Speaker 1: by the way, also had this when I and people,

836
00:43:12,320 --> 00:43:15,600
Speaker 1: these people can't keep up records like this, but Schwartz, Uh,

837
00:43:15,920 --> 00:43:18,400
Speaker 1: like a ten year record, which he had ordered. This

838
00:43:18,480 --> 00:43:21,000
Speaker 1: is one of the times he was very proudly showing

839
00:43:21,000 --> 00:43:24,200
Speaker 1: me his numbers because I know it. I want you. Yeah, okay,

840
00:43:24,840 --> 00:43:27,480
Speaker 1: it is nobody's gonna believe this. It's twenty five percent

841
00:43:27,560 --> 00:43:36,160
Speaker 1: a year, a month, a month for ten years, for

842
00:43:36,280 --> 00:43:41,440
Speaker 1: ten ten years. Uh stock only stock index futures, stocking.

843
00:43:41,520 --> 00:43:44,960
Speaker 1: He just traded stock index futures and and he had

844
00:43:45,040 --> 00:43:48,200
Speaker 1: only he only had I think two or three losing

845
00:43:48,280 --> 00:43:50,040
Speaker 1: months in the entire period. And I think his worse

846
00:43:50,080 --> 00:43:52,080
Speaker 1: than losing Hi ups like a three percent loss. And

847
00:43:52,160 --> 00:43:53,680
Speaker 1: he went out and it was two and he went

848
00:43:53,719 --> 00:43:55,920
Speaker 1: out of his way to tell me that those were

849
00:43:55,960 --> 00:43:58,080
Speaker 1: the months his kids were born, so he had distractions.

850
00:43:59,040 --> 00:44:02,360
Speaker 1: That's fair enough that those are some astonishing numbers and

851
00:44:02,520 --> 00:44:06,080
Speaker 1: and let's do uh Stanley Drucon Miller. Yeah, so you know,

852
00:44:06,239 --> 00:44:09,160
Speaker 1: Stanley Druccon Miller again one of the incredible traders of

853
00:44:09,239 --> 00:44:11,759
Speaker 1: all time. I think people don't know how great he

854
00:44:12,000 --> 00:44:13,480
Speaker 1: he was. I mean, first of all, he ran his

855
00:44:13,560 --> 00:44:17,320
Speaker 1: own Docane fund for close to forty years and probably

856
00:44:17,360 --> 00:44:22,760
Speaker 1: average around compounded trading billions of dollars. Uh uh. People

857
00:44:22,800 --> 00:44:24,840
Speaker 1: also a lot unless they read my book, would not

858
00:44:24,880 --> 00:44:27,600
Speaker 1: necessarily know that druck and Miller ran the Sources Quantum

859
00:44:27,640 --> 00:44:30,160
Speaker 1: Fund for a long period the when Source was in

860
00:44:30,200 --> 00:44:32,680
Speaker 1: Eastern Europe kind of doing of his stuff that he

861
00:44:32,719 --> 00:44:36,040
Speaker 1: was interested in doing, and so uh, really an extraordinary trader.

862
00:44:37,040 --> 00:44:39,840
Speaker 1: So if people want to find out more information about

863
00:44:40,239 --> 00:44:42,680
Speaker 1: either yourself for a fund seat or a market, wizards

864
00:44:42,719 --> 00:44:46,040
Speaker 1: with the best fund seater dot com. You know, just

865
00:44:46,160 --> 00:44:47,920
Speaker 1: a fun seater is like one word and what it

866
00:44:48,000 --> 00:44:50,080
Speaker 1: sounds like. And I have my own side which I

867
00:44:50,080 --> 00:44:51,759
Speaker 1: didn't do anything with. But you know, if you want

868
00:44:51,800 --> 00:44:53,800
Speaker 1: to get the books or any other links to any stuff.

869
00:44:54,080 --> 00:44:56,719
Speaker 1: Jack Schwegger dot com Jeff, thank you so much for

870
00:44:56,800 --> 00:45:01,360
Speaker 1: being say your time. We've in speaking with Jack Schwager,

871
00:45:01,440 --> 00:45:05,239
Speaker 1: author of Market Wizards. If you enjoy this conversation, be

872
00:45:05,360 --> 00:45:07,759
Speaker 1: sure and stick around for the podcast extras, where we

873
00:45:07,920 --> 00:45:10,880
Speaker 1: keep the tape rolling and continue chatting. Be sure to

874
00:45:10,960 --> 00:45:14,759
Speaker 1: check out my daily column on Bloomberg dot com or

875
00:45:14,880 --> 00:45:18,880
Speaker 1: follow me on Twitter at Rid Halts. I'm Barry Rit Halts.

876
00:45:19,000 --> 00:45:23,279
Speaker 1: You're listening to Masters in Business on Bloomberg Radio, brought

877
00:45:23,360 --> 00:45:26,320
Speaker 1: to you by B A s F. We Create Chemistry.

878
00:45:27,160 --> 00:45:30,799
Speaker 1: Welcome to the podcast. Thank you so much, Jack, Thank

879
00:45:30,800 --> 00:45:32,160
Speaker 1: you so much for doing this. You're you're one of

880
00:45:32,239 --> 00:45:36,800
Speaker 1: our few repeat guests. And I know I've said this before,

881
00:45:37,520 --> 00:45:43,800
Speaker 1: but I really have to reiterate. This show came about

882
00:45:45,080 --> 00:45:48,360
Speaker 1: because of because of Market Wizards. It came about because

883
00:45:49,080 --> 00:45:51,719
Speaker 1: I said, that looks like so much fun. When I

884
00:45:51,800 --> 00:45:54,600
Speaker 1: first started writing for Bloomberg, they said, hey, we have

885
00:45:54,719 --> 00:45:57,000
Speaker 1: these great facilities, it's a playground. What would you like

886
00:45:57,120 --> 00:46:01,279
Speaker 1: to do? And my answer was I want to find intelligent,

887
00:46:01,360 --> 00:46:06,080
Speaker 1: accomplished people, both from in investing and outside and sit

888
00:46:06,160 --> 00:46:09,440
Speaker 1: them down and have a Market Wizards like conversation. And

889
00:46:09,560 --> 00:46:13,040
Speaker 1: they were, okay, go do that that's really how this

890
00:46:13,160 --> 00:46:16,160
Speaker 1: came about. So the last time we spoke, I would

891
00:46:16,200 --> 00:46:18,440
Speaker 1: be I would be remiss if I did not point

892
00:46:18,520 --> 00:46:22,840
Speaker 1: this out. You reminded me of something fairly hilarious that

893
00:46:23,000 --> 00:46:28,520
Speaker 1: I had forgotten about, which was Amazon review of Market

894
00:46:28,560 --> 00:46:32,400
Speaker 1: Wizards from two thousand and three. So I actually went

895
00:46:32,440 --> 00:46:37,239
Speaker 1: out and pulled that review today and I just have

896
00:46:37,400 --> 00:46:39,680
Speaker 1: to share this with the audience because it's so funny.

897
00:46:40,600 --> 00:46:42,719
Speaker 1: Um the market strategist for New York City Investment Bank

898
00:46:42,760 --> 00:46:45,120
Speaker 1: bl blah blah blah. So when gave me this book

899
00:46:45,239 --> 00:46:48,319
Speaker 1: when I first got into the industry a decade ago.

900
00:46:48,640 --> 00:46:51,560
Speaker 1: So this is written in oh three, God, we are

901
00:46:51,640 --> 00:46:55,840
Speaker 1: getting old. I find myself rereading it every five years. Quote.

902
00:46:55,960 --> 00:46:59,440
Speaker 1: I highly recommended to anyone who was involved in the markets,

903
00:46:59,719 --> 00:47:03,040
Speaker 1: say we stated, this is the book for anyone who

904
00:47:03,120 --> 00:47:06,360
Speaker 1: wants to learn about trading or investing. It is simply

905
00:47:06,440 --> 00:47:10,120
Speaker 1: a must read. What's so utterly compelling about the interviews

906
00:47:10,320 --> 00:47:13,880
Speaker 1: is how consistent the themes are that arise from so

907
00:47:13,960 --> 00:47:17,040
Speaker 1: many different traders. This is true regardless of the markets

908
00:47:17,080 --> 00:47:21,000
Speaker 1: they work in, commodities, equities, currencies, bonds, or the style

909
00:47:21,120 --> 00:47:27,440
Speaker 1: they employ technical macro economic, fundamental quantitative the basic concepts

910
00:47:27,520 --> 00:47:33,799
Speaker 1: revealed by the Wizards or these discipline, capital, preservation, risk management,

911
00:47:34,320 --> 00:47:42,560
Speaker 1: individual responsibility, flexibility, intellectual honesty, and consistency. Now that's pretty fascinating.

912
00:47:42,760 --> 00:47:45,000
Speaker 1: And and that is a in the mouth the words

913
00:47:45,080 --> 00:47:47,880
Speaker 1: you use. You couldn't capture the book better. I mean

914
00:47:48,120 --> 00:47:50,960
Speaker 1: that really is what the what the book had said

915
00:47:51,000 --> 00:47:55,400
Speaker 1: to me. And I completely forgot about that. And that

916
00:47:55,600 --> 00:47:58,040
Speaker 1: is that. Yeah. But the thing is your review. You

917
00:47:58,120 --> 00:48:00,720
Speaker 1: know how Amazon has, uh, if you like a review,

918
00:48:00,840 --> 00:48:03,520
Speaker 1: you know it was helpful. Yeah, And so that review,

919
00:48:03,680 --> 00:48:05,080
Speaker 1: like I I don't know what it was like in

920
00:48:05,200 --> 00:48:06,759
Speaker 1: you know, ninety eight out of nine and nine people

921
00:48:06,840 --> 00:48:09,000
Speaker 1: found it helpful or something like it shows up as

922
00:48:09,080 --> 00:48:13,480
Speaker 1: the top reviewed review. And I completely so it's the

923
00:48:13,560 --> 00:48:16,040
Speaker 1: top ranked review of market Wizards. If you go to

924
00:48:16,120 --> 00:48:18,080
Speaker 1: the people, it will be always be the first one.

925
00:48:18,160 --> 00:48:20,480
Speaker 1: And nobody's ever going to replace that. Because so you

926
00:48:20,600 --> 00:48:23,239
Speaker 1: reminded me of that, and I hadn't a I had

927
00:48:23,280 --> 00:48:26,640
Speaker 1: no idea that was of all the little of all

928
00:48:26,719 --> 00:48:30,040
Speaker 1: the little ego things to go out and google yourself

929
00:48:30,200 --> 00:48:33,880
Speaker 1: or whatever. I just and by the way, I almost

930
00:48:34,520 --> 00:48:39,760
Speaker 1: never never write reviews of stuff. Usually it's because something

931
00:48:39,920 --> 00:48:43,280
Speaker 1: is this is not how it's advertised. This was advertised

932
00:48:43,320 --> 00:48:46,120
Speaker 1: as a twelve pack and only one showed up or

933
00:48:46,440 --> 00:48:51,200
Speaker 1: whatever it was. And and I was moved enough by

934
00:48:51,239 --> 00:48:54,359
Speaker 1: the book to write that review, and then I never

935
00:48:54,480 --> 00:48:56,840
Speaker 1: thought a second And I'm sure it was very helpful.

936
00:48:56,920 --> 00:48:58,680
Speaker 1: I mean that because when people go to that and

937
00:48:58,760 --> 00:49:00,399
Speaker 1: then the first thing I see is your you. It's

938
00:49:00,480 --> 00:49:03,919
Speaker 1: it's it's sincere. It's honest, it's sincere. So so let's

939
00:49:03,960 --> 00:49:07,280
Speaker 1: talk a little bit about about some of the other wizards,

940
00:49:07,400 --> 00:49:11,560
Speaker 1: because I think people are are genuinely interested. During the

941
00:49:11,600 --> 00:49:16,040
Speaker 1: broadcast portion, we didn't get to Richard Dennis. Uh. Tell

942
00:49:16,160 --> 00:49:19,000
Speaker 1: us a little bit about Richard Dennis. All right, Richard

943
00:49:19,080 --> 00:49:22,360
Speaker 1: Dennis h started out as a floor trader. Uh. He

944
00:49:22,440 --> 00:49:25,239
Speaker 1: started on the Mid America Exchange. Of course, we don't

945
00:49:25,239 --> 00:49:28,600
Speaker 1: have any floors altogether, but the midor Erica for people

946
00:49:28,680 --> 00:49:30,839
Speaker 1: who were unless their old time is like us. Uh.

947
00:49:31,520 --> 00:49:35,640
Speaker 1: Mid America's change was exchange for people small conquered mini contracts,

948
00:49:35,640 --> 00:49:37,840
Speaker 1: so people who couldn't afford the trade to regular grain contracts,

949
00:49:37,840 --> 00:49:40,440
Speaker 1: which weren't that big really, they would trade the Mid American.

950
00:49:40,480 --> 00:49:42,200
Speaker 1: That's what he started out. And he started out literally,

951
00:49:42,239 --> 00:49:44,160
Speaker 1: I think we're about the two hundred dollars and uh

952
00:49:44,840 --> 00:49:46,880
Speaker 1: uh you know, eventually got it up a few thousand.

953
00:49:46,960 --> 00:49:51,000
Speaker 1: But he that that that the little steak got multiplied

954
00:49:51,080 --> 00:49:55,680
Speaker 1: ultimately a couple hundred million dollars a couple hundred yeah,

955
00:49:55,719 --> 00:49:58,880
Speaker 1: two hundred million plus whatever I mean to two hundred

956
00:49:59,800 --> 00:50:03,280
Speaker 1: ye yeah, yeah yeah, Uh. It could be the greatest

957
00:50:03,320 --> 00:50:06,879
Speaker 1: compounded return of Yeah, there's uh, there's quite a few.

958
00:50:06,920 --> 00:50:08,600
Speaker 1: I mean that would certainly if you want of them,

959
00:50:08,680 --> 00:50:13,160
Speaker 1: for sure. Yeah. Uh. And and now Dennis ultimately went

960
00:50:13,200 --> 00:50:16,040
Speaker 1: on to manage money that didn't work out so well. Uh,

961
00:50:16,200 --> 00:50:17,759
Speaker 1: he did much better for his own money, and he

962
00:50:18,040 --> 00:50:21,360
Speaker 1: he started he started blew up, you know, back he

963
00:50:21,440 --> 00:50:23,960
Speaker 1: got stuck in the big thing that that hurt Dennis

964
00:50:24,200 --> 00:50:26,399
Speaker 1: was And that was also a bit of bad luck,

965
00:50:26,440 --> 00:50:30,520
Speaker 1: I would say, uh was the eighties seven crash. Uh.

966
00:50:30,600 --> 00:50:32,279
Speaker 1: And everybody thinks that the eighty seven crash. Of course,

967
00:50:32,280 --> 00:50:34,920
Speaker 1: it was like the the immense decline to stock market.

968
00:50:35,080 --> 00:50:37,440
Speaker 1: But what also happened in eight seven crash was this

969
00:50:37,760 --> 00:50:42,040
Speaker 1: amazing rally in in the interest rate markets and your

970
00:50:42,200 --> 00:50:45,120
Speaker 1: dollars which nowadays you think of your dollars, we'll trade

971
00:50:45,160 --> 00:50:47,040
Speaker 1: a cup, you know, they go five or ten points

972
00:50:47,200 --> 00:50:51,080
Speaker 1: right there, there was an overnight move of two hundred

973
00:50:51,080 --> 00:50:53,840
Speaker 1: and fifty points. I mean, think about that. That's like

974
00:50:53,960 --> 00:50:58,560
Speaker 1: in that that's per contract, you know. So uh it

975
00:50:58,719 --> 00:51:00,520
Speaker 1: was like a seven thousand dollar move roughly. I think

976
00:51:00,560 --> 00:51:03,000
Speaker 1: it was per contract, and we're talking a guy who's trading,

977
00:51:03,320 --> 00:51:06,200
Speaker 1: you know, thousands of contracts. Uh so, but that and

978
00:51:06,280 --> 00:51:08,760
Speaker 1: he couldn't do anything. It was like, oh, it was instantaneous.

979
00:51:08,840 --> 00:51:12,200
Speaker 1: It's just like it was the gap. You couldn't do anything.

980
00:51:13,320 --> 00:51:15,360
Speaker 1: So that that trade I think pretty much wipe. You

981
00:51:15,400 --> 00:51:17,839
Speaker 1: know that. That that killed his first advent or one

982
00:51:17,880 --> 00:51:20,680
Speaker 1: of it would adventures and so but he never again

983
00:51:21,040 --> 00:51:23,960
Speaker 1: reached that. Uh but what was he especially famous for?

984
00:51:24,280 --> 00:51:27,480
Speaker 1: He was a trend follower, and part of it I

985
00:51:27,520 --> 00:51:30,520
Speaker 1: think maybe was like he when he operated when the

986
00:51:30,600 --> 00:51:34,200
Speaker 1: markets were conducive to that. Now, trend following, we can

987
00:51:34,239 --> 00:51:35,840
Speaker 1: get into this if you want. I mean, there's a

988
00:51:35,880 --> 00:51:40,200
Speaker 1: reason why trend following works to some extent all the time.

989
00:51:40,280 --> 00:51:44,160
Speaker 1: Over time, there are elements of momentum and persistency that

990
00:51:44,239 --> 00:51:47,880
Speaker 1: exists in all markets because people's mood tend to not

991
00:51:48,080 --> 00:51:51,840
Speaker 1: flip flop from day to day. If there's an expansionary period.

992
00:51:51,960 --> 00:51:54,160
Speaker 1: It has a tendency that that's one. It's more it's

993
00:51:54,200 --> 00:51:56,440
Speaker 1: more that it's more fundamental than that is because the

994
00:51:56,520 --> 00:52:00,520
Speaker 1: things that really drive the big moves are things that blasts.

995
00:52:00,600 --> 00:52:04,120
Speaker 1: So it's it's a central bank decides to secular. So yeah,

996
00:52:04,239 --> 00:52:06,840
Speaker 1: they decide, well, we're gonna weekend the dollar or strengthen

997
00:52:06,920 --> 00:52:09,120
Speaker 1: the euro, whatever they're gonna do. Uh And they're not

998
00:52:09,200 --> 00:52:11,359
Speaker 1: gonna just do it for two days or two weeks

999
00:52:11,400 --> 00:52:14,040
Speaker 1: and these day or or there's a move to say, okay,

1000
00:52:14,320 --> 00:52:17,000
Speaker 1: we're gonna start lowering interest rates, and usually when that

1001
00:52:17,120 --> 00:52:20,240
Speaker 1: happens or raised interests, once that trend begins, it usually

1002
00:52:20,280 --> 00:52:22,759
Speaker 1: goes on. So trends have a way of persisting. And

1003
00:52:22,840 --> 00:52:26,359
Speaker 1: even if it's something like commodities or whatever, if there's

1004
00:52:26,360 --> 00:52:28,799
Speaker 1: a shortage of metals, it takes kiars to open new

1005
00:52:28,840 --> 00:52:30,759
Speaker 1: minds and stuff. So these trends can go on for

1006
00:52:30,840 --> 00:52:33,279
Speaker 1: a while. Uh. So that's why it works, But it's

1007
00:52:33,280 --> 00:52:36,560
Speaker 1: gotten much more difficult to exploit because the markets there's

1008
00:52:36,560 --> 00:52:38,520
Speaker 1: so many people who try to do this. When we

1009
00:52:38,640 --> 00:52:40,920
Speaker 1: were starting this early on or why should say we

1010
00:52:41,200 --> 00:52:43,760
Speaker 1: but the trade aside, somebody Dresy interviewed you know, they

1011
00:52:43,800 --> 00:52:45,560
Speaker 1: were the early ones doing this stuff, and they were

1012
00:52:45,600 --> 00:52:47,960
Speaker 1: doing trend following techniques, and but now there's so many

1013
00:52:48,120 --> 00:52:50,040
Speaker 1: people doing it that you've got a lot of a

1014
00:52:50,120 --> 00:52:52,320
Speaker 1: lot of false breakouts, and it's much more difficult to

1015
00:52:52,560 --> 00:52:56,480
Speaker 1: make money that way. That's that's fascinating. So not only

1016
00:52:56,840 --> 00:52:59,080
Speaker 1: was he a big trend follower, but there's a famous

1017
00:52:59,120 --> 00:53:02,279
Speaker 1: total story with him with the turtles. Well yeah, I mean,

1018
00:53:02,400 --> 00:53:04,839
Speaker 1: well there's a group of traders called the Turtles, uh,

1019
00:53:05,200 --> 00:53:08,239
Speaker 1: which where the name comes from the story is that

1020
00:53:08,360 --> 00:53:10,560
Speaker 1: he was in Singapore and he went he saw a

1021
00:53:11,040 --> 00:53:14,080
Speaker 1: farm where they were raising turtles as Vada turtles. By

1022
00:53:14,160 --> 00:53:17,080
Speaker 1: the tens of that. His thought was, Gee, wouldn't be

1023
00:53:17,520 --> 00:53:20,040
Speaker 1: being interesting if we could if I could trace traders

1024
00:53:20,120 --> 00:53:22,719
Speaker 1: like their raising turtles. Here you trying to do with

1025
00:53:22,960 --> 00:53:24,799
Speaker 1: which is why we're trying front seat or except we're

1026
00:53:24,840 --> 00:53:27,800
Speaker 1: not trying to train them or anything. We're yeah, and

1027
00:53:27,920 --> 00:53:31,600
Speaker 1: and and Dennis and another trader we talked about an intermission.

1028
00:53:31,640 --> 00:53:34,080
Speaker 1: Neck Cart who was his partner, trained a group of

1029
00:53:34,120 --> 00:53:36,160
Speaker 1: traders called the Turtles, and some of them went on

1030
00:53:36,320 --> 00:53:39,440
Speaker 1: to do quite well. Uh. And so that's kind of

1031
00:53:39,480 --> 00:53:43,960
Speaker 1: a famous story. And they put an Times and yeah,

1032
00:53:44,120 --> 00:53:46,040
Speaker 1: or not think we actually was the Wall Street Journal, right,

1033
00:53:46,040 --> 00:53:48,560
Speaker 1: the Wall Street Journal. They did two years, uh, and

1034
00:53:48,600 --> 00:53:51,120
Speaker 1: they picked about twenty people each time, and they had

1035
00:53:51,280 --> 00:53:53,880
Speaker 1: no previous way. They were not looking for training. They

1036
00:53:53,880 --> 00:53:56,040
Speaker 1: were looking for people like game inventors, they were looking

1037
00:53:56,080 --> 00:53:58,000
Speaker 1: for chess players, they were looking they were looking at

1038
00:53:58,040 --> 00:54:01,480
Speaker 1: people who kind of had create to an analytical and thing.

1039
00:54:01,480 --> 00:54:03,319
Speaker 1: But they didn't want people who actually know anything about

1040
00:54:03,360 --> 00:54:05,560
Speaker 1: market any want they want. They don't want to be

1041
00:54:06,239 --> 00:54:09,719
Speaker 1: sullied by the wrong approach. You know. So Renaissance Technology

1042
00:54:09,800 --> 00:54:14,320
Speaker 1: out out in Umsa talking near Stony Brook, Jim Simon's

1043
00:54:14,880 --> 00:54:16,840
Speaker 1: he doesn't hire Wall Street people, you know, well that

1044
00:54:16,960 --> 00:54:18,840
Speaker 1: but that's a that's a pure that's how that's a

1045
00:54:19,080 --> 00:54:24,320
Speaker 1: really pure deep quantitative really you know, really deep quantitative stuff.

1046
00:54:24,560 --> 00:54:27,560
Speaker 1: So people like Simon's yeah, and and and Shore is similar,

1047
00:54:27,719 --> 00:54:33,600
Speaker 1: you know, uh, they basically very highly quantitative approaches. So

1048
00:54:33,960 --> 00:54:37,000
Speaker 1: so those are some of the uh, those are some

1049
00:54:37,080 --> 00:54:38,879
Speaker 1: of the people you mentioned. Druck and Mill. We talked

1050
00:54:38,920 --> 00:54:42,640
Speaker 1: about Marty Schwartz and any Trader in particular. You think, uh,

1051
00:54:43,400 --> 00:54:46,080
Speaker 1: we're worth mentioning that. Yeah, the one trader we didn't

1052
00:54:46,080 --> 00:54:49,080
Speaker 1: talk about who I I just think is a phenomenal,

1053
00:54:49,239 --> 00:54:53,160
Speaker 1: phenomenal individual is and and probably in in some ways,

1054
00:54:53,239 --> 00:54:55,760
Speaker 1: of all the great people that I interviewed, is probably

1055
00:54:55,800 --> 00:54:58,080
Speaker 1: the most amazing. And that would be that would be

1056
00:54:58,239 --> 00:55:01,919
Speaker 1: Ed Thorpe. Sure be Eat the Dealer, his first book,

1057
00:55:01,920 --> 00:55:04,759
Speaker 1: and then beat the market, Beat the markets. Right, he

1058
00:55:04,800 --> 00:55:07,400
Speaker 1: was out in Stanford or yeah, yeah, he's out in

1059
00:55:07,480 --> 00:55:11,319
Speaker 1: California around. He's still around. He's now when I interviewed him,

1060
00:55:11,480 --> 00:55:14,680
Speaker 1: he think he was like interviewed two thousand and twelve.

1061
00:55:14,800 --> 00:55:18,399
Speaker 1: I think he was seventy eight or so or seventy nine,

1062
00:55:18,520 --> 00:55:21,040
Speaker 1: so he's low low eighties. Now this is you know,

1063
00:55:21,280 --> 00:55:26,600
Speaker 1: he's a just he's a mathematician, PhD mathematician. He actually

1064
00:55:26,760 --> 00:55:29,160
Speaker 1: the way he became a PhD athetician, which tells you

1065
00:55:29,200 --> 00:55:31,800
Speaker 1: a lot about the man, is he was doing his PhD.

1066
00:55:31,920 --> 00:55:33,160
Speaker 1: And this is a kid who grew up in the

1067
00:55:33,239 --> 00:55:37,360
Speaker 1: Depression um in a poor school district, very bad education

1068
00:55:37,440 --> 00:55:40,800
Speaker 1: toward himself physics at at a young age, got you know,

1069
00:55:41,200 --> 00:55:45,040
Speaker 1: got accepted into uh, you know, top universities in California,

1070
00:55:45,040 --> 00:55:47,840
Speaker 1: and was getting his PhD, was working on his thesis

1071
00:55:47,880 --> 00:55:50,759
Speaker 1: and PhD in physics. Decided he didn't he decided he

1072
00:55:50,800 --> 00:55:54,320
Speaker 1: didn't have enough math knowledge, started the order thing courses

1073
00:55:54,360 --> 00:55:56,880
Speaker 1: in the graduate math courses, ended up with the PhD.

1074
00:55:56,960 --> 00:55:59,840
Speaker 1: Math never rots thesis, so he you know, in in physics,

1075
00:56:00,000 --> 00:56:02,000
Speaker 1: technically speaking, he's not a PhD in physics. They never

1076
00:56:02,040 --> 00:56:05,239
Speaker 1: bore writing the but some some stuff he did. He

1077
00:56:05,360 --> 00:56:08,800
Speaker 1: actually and he has this amazing track record. Uh his

1078
00:56:08,960 --> 00:56:13,480
Speaker 1: first fund nineteen years, um, nineteen years, he only had

1079
00:56:13,760 --> 00:56:16,719
Speaker 1: uh like two or three losing months in all those

1080
00:56:16,760 --> 00:56:20,759
Speaker 1: nineteen years one percent losses. The largest loss ninete cent compounded.

1081
00:56:21,640 --> 00:56:24,480
Speaker 1: But that's the that's that's that's a track record. He

1082
00:56:24,520 --> 00:56:27,120
Speaker 1: also did stuff like the reason he did so well.

1083
00:56:27,680 --> 00:56:31,080
Speaker 1: He he came up with the Black a mathematical equivalent

1084
00:56:31,160 --> 00:56:35,440
Speaker 1: formulation of the Black Shows model about five years before then,

1085
00:56:35,560 --> 00:56:38,359
Speaker 1: famous paper that want the nob prize. And he didn't

1086
00:56:38,400 --> 00:56:40,279
Speaker 1: publish it because why I asked him, why he was

1087
00:56:40,320 --> 00:56:43,319
Speaker 1: too busy. Yeah, think of it for five years. He's

1088
00:56:43,440 --> 00:56:45,399
Speaker 1: he may be the world the only person in world

1089
00:56:45,440 --> 00:56:48,440
Speaker 1: who knows how the price options correctly at and and

1090
00:56:48,680 --> 00:56:52,719
Speaker 1: and that's what he made it. And he he was.

1091
00:56:52,880 --> 00:56:55,319
Speaker 1: He had the first the first war you know type

1092
00:56:55,360 --> 00:56:57,520
Speaker 1: option fund. He had the first convertible bond fund. He

1093
00:56:57,640 --> 00:57:00,160
Speaker 1: had the first statop fund. He came up with all

1094
00:57:00,160 --> 00:57:02,080
Speaker 1: of these things on his own. He and when he

1095
00:57:02,200 --> 00:57:04,840
Speaker 1: was before his trading career, then he was doing stuff

1096
00:57:04,920 --> 00:57:07,520
Speaker 1: like UH. He was the first person to h with

1097
00:57:07,760 --> 00:57:10,960
Speaker 1: with UH. With an MT Professor Shannon, who was the

1098
00:57:11,000 --> 00:57:14,280
Speaker 1: father farther information theory, they did the first miniature computer.

1099
00:57:14,719 --> 00:57:16,760
Speaker 1: This is back in the sixties when god, you know,

1100
00:57:17,000 --> 00:57:20,800
Speaker 1: we had we had IBM IBM mainframes as large as

1101
00:57:20,800 --> 00:57:23,600
Speaker 1: the room to do simple calculations. They created their own

1102
00:57:23,640 --> 00:57:26,920
Speaker 1: own mini ministure computer and did the studies to use

1103
00:57:27,000 --> 00:57:29,920
Speaker 1: Newtonian physics to beat Roulette wheel, just to show that

1104
00:57:30,000 --> 00:57:32,000
Speaker 1: it could be done. And they got like a forty

1105
00:57:32,040 --> 00:57:35,280
Speaker 1: four percent edge on the Roulette um. And and so

1106
00:57:35,720 --> 00:57:38,640
Speaker 1: he did all these amazing things. That's fascinating. Why do

1107
00:57:38,720 --> 00:57:41,320
Speaker 1: you say he's the most interesting character. Well, because he

1108
00:57:41,400 --> 00:57:43,880
Speaker 1: has all that those elements. You know, he figured out

1109
00:57:43,960 --> 00:57:46,720
Speaker 1: how to beat you know, the casinos at their own game.

1110
00:57:46,760 --> 00:57:49,360
Speaker 1: They changed. In fact, they had meetings about what to

1111
00:57:49,400 --> 00:57:51,919
Speaker 1: do about Thorpe, you know about this man, professor. Yeah,

1112
00:57:51,960 --> 00:57:54,360
Speaker 1: and and there's a story and they were they thinking

1113
00:57:54,360 --> 00:57:57,160
Speaker 1: about banning him from the worst band. Let's put it

1114
00:57:57,240 --> 00:57:58,919
Speaker 1: this way. One of those stories in hedge fund markt

1115
00:57:58,960 --> 00:58:01,320
Speaker 1: Wizards tell us about and this is like out of

1116
00:58:01,360 --> 00:58:05,000
Speaker 1: a movie with his brakes not working, you know, going

1117
00:58:05,160 --> 00:58:08,520
Speaker 1: downhead car on the car and just throwing the corn

1118
00:58:08,560 --> 00:58:11,040
Speaker 1: reverse and and finding out that the car has been

1119
00:58:11,160 --> 00:58:13,920
Speaker 1: you know, tampered with, you know really Yeah, yeah, so

1120
00:58:14,040 --> 00:58:18,040
Speaker 1: we had the vegas. We had so But anyway, So

1121
00:58:18,200 --> 00:58:19,720
Speaker 1: had that side of his life and then he did

1122
00:58:19,800 --> 00:58:21,960
Speaker 1: all these He was the creator of so many catch

1123
00:58:22,000 --> 00:58:24,600
Speaker 1: fund strategy He's the first guy to do it. Um

1124
00:58:25,080 --> 00:58:28,480
Speaker 1: and uh uh and there all sorts. The thing that

1125
00:58:28,880 --> 00:58:30,760
Speaker 1: I can't even think he was a made off. He

1126
00:58:30,920 --> 00:58:33,640
Speaker 1: he kind of he he knew made off. He figured

1127
00:58:33,680 --> 00:58:36,320
Speaker 1: out what made off was up to like a dozen

1128
00:58:36,440 --> 00:58:40,120
Speaker 1: years before. Uh. And he had he investors because investor,

1129
00:58:40,200 --> 00:58:41,560
Speaker 1: one of his investors said hey, what do you think

1130
00:58:41,600 --> 00:58:43,280
Speaker 1: of this? He said, give me the trades. And he

1131
00:58:43,600 --> 00:58:47,960
Speaker 1: he's a mathematician. He he gave mateen reasons why it

1132
00:58:48,080 --> 00:58:52,360
Speaker 1: was why he was out. That's fascinating. It's a shame

1133
00:58:52,400 --> 00:58:54,200
Speaker 1: he didn't go public with that. Yeah, I think he

1134
00:58:54,680 --> 00:58:56,960
Speaker 1: I think I think I might have discussed that in

1135
00:58:57,000 --> 00:58:58,480
Speaker 1: the book. And there were reasons why. You know, he

1136
00:58:58,560 --> 00:59:01,760
Speaker 1: just felt that you know he couldn't get and of

1137
00:59:01,840 --> 00:59:05,200
Speaker 1: course that you know, Actually, uh, I should know the

1138
00:59:05,320 --> 00:59:09,720
Speaker 1: name the fellow went public um uh mark uh Greek

1139
00:59:09,840 --> 00:59:15,560
Speaker 1: name uh Marcot pop Harry, Marco, Marco Polos, Marco Polos, right, Uh,

1140
00:59:15,680 --> 00:59:20,880
Speaker 1: I mean he wrote this great paper which beautifully beautiful analysis,

1141
00:59:21,360 --> 00:59:24,960
Speaker 1: and they ignored it. I thought from Marco Polos's paper

1142
00:59:25,000 --> 00:59:28,040
Speaker 1: the most compelling thing was if he's doing this by

1143
00:59:28,200 --> 00:59:31,320
Speaker 1: right strategy, there aren't enough options in the world that

1144
00:59:32,800 --> 00:59:35,960
Speaker 1: this isn't complicated. He's got to be like he's doing

1145
00:59:36,000 --> 00:59:38,000
Speaker 1: trades and markets that had no volume on that day,

1146
00:59:38,240 --> 00:59:40,600
Speaker 1: and he's doing what he's doing tens of thousillions of

1147
00:59:40,640 --> 00:59:42,920
Speaker 1: dollars right, and tens of thousands of trades and a

1148
00:59:43,000 --> 00:59:46,880
Speaker 1: market that didn't even have any option trades. It's it's hindsight.

1149
00:59:46,960 --> 00:59:50,240
Speaker 1: Bias is always present. But that was foresight of market

1150
00:59:50,280 --> 00:59:54,320
Speaker 1: Polosis party he was. It was foresight that that's quite

1151
00:59:54,520 --> 00:59:57,800
Speaker 1: that's quite fascinating. So let's talk a little bit about

1152
00:59:57,880 --> 01:00:01,120
Speaker 1: technical Since you've written a book about trend following and

1153
01:00:01,840 --> 01:00:04,800
Speaker 1: market trading in futures, I shouldn't really call it trend following. Yeah,

1154
01:00:04,800 --> 01:00:08,680
Speaker 1: it's not yet. It's really more technically answered. The book

1155
01:00:08,720 --> 01:00:11,600
Speaker 1: that got me into this whole thing writing was was

1156
01:00:11,920 --> 01:00:14,040
Speaker 1: was an analygical book called Complete Guide to the Futures Market,

1157
01:00:15,480 --> 01:00:18,160
Speaker 1: which was the catalyst for the Market Wizard books. Because

1158
01:00:18,640 --> 01:00:20,480
Speaker 1: that book, I told you had the idea of years before.

1159
01:00:21,000 --> 01:00:22,720
Speaker 1: That book did well for an analytical book. I had

1160
01:00:22,760 --> 01:00:24,720
Speaker 1: some publishers say, hey, why don't you do want you

1161
01:00:24,720 --> 01:00:26,280
Speaker 1: to do a whole bunch of analygal books. I said, no,

1162
01:00:26,360 --> 01:00:27,640
Speaker 1: thank you, I've done that once. It was a lot

1163
01:00:27,680 --> 01:00:29,600
Speaker 1: of work, and so I did the Market Wizards. But

1164
01:00:30,000 --> 01:00:32,440
Speaker 1: that book is now getting redone. I have a co

1165
01:00:32,600 --> 01:00:35,160
Speaker 1: Aufered Markets going and doing a great job, doing great

1166
01:00:35,240 --> 01:00:39,040
Speaker 1: legwork getting it updated. And UH so that the updated

1167
01:00:39,160 --> 01:00:42,200
Speaker 1: version the new the new version of the Complete Guide

1168
01:00:42,200 --> 01:00:45,000
Speaker 1: of the Market. Uh, Complete Guide to the Futures of markets,

1169
01:00:45,040 --> 01:00:49,360
Speaker 1: like guid the Future market is fundamentals, technical options, etcetera, etcetera, etcetera. Trading.

1170
01:00:49,800 --> 01:00:53,760
Speaker 1: Uh that comes out this fall sometimes that's that's interesting.

1171
01:00:53,840 --> 01:00:56,680
Speaker 1: So so how did you find your way to technicals?

1172
01:00:56,760 --> 01:00:59,040
Speaker 1: What made you like? Ah? Yeah, so I said, you're

1173
01:00:59,040 --> 01:01:02,480
Speaker 1: looking at somebody who started out as a fundamental analysts.

1174
01:01:02,720 --> 01:01:06,720
Speaker 1: I hear this on a regular basis, starts out as

1175
01:01:06,760 --> 01:01:09,440
Speaker 1: a c f A or or a macro economist. And

1176
01:01:09,480 --> 01:01:11,680
Speaker 1: then because I come, you know, I come from an

1177
01:01:11,680 --> 01:01:15,520
Speaker 1: account what's my education, I'm I'm I've got a degree

1178
01:01:15,560 --> 01:01:18,560
Speaker 1: in economic so so, uh, you know you're to be

1179
01:01:18,600 --> 01:01:21,280
Speaker 1: inclined to look for a statistical analysts, you know, that

1180
01:01:21,360 --> 01:01:25,080
Speaker 1: type of analysis approach. Um. But I found that the

1181
01:01:25,160 --> 01:01:29,400
Speaker 1: fundamental analysis was very poorly attuned to trading, because fundamentals

1182
01:01:29,480 --> 01:01:33,640
Speaker 1: don't give you timing, uh, And it's worse than Actually,

1183
01:01:33,760 --> 01:01:37,000
Speaker 1: I say, the only way that fundamentals are useful for

1184
01:01:37,120 --> 01:01:40,800
Speaker 1: timing is in a contrarian way. So in other words,

1185
01:01:40,840 --> 01:01:42,840
Speaker 1: if you have something that's supposed to be bullish for

1186
01:01:42,880 --> 01:01:45,440
Speaker 1: the market and it doesn't cause the market to go

1187
01:01:45,560 --> 01:01:47,200
Speaker 1: up much or as much as you think, or cause

1188
01:01:47,240 --> 01:01:50,800
Speaker 1: the market goes down, that might be very useful bearish information,

1189
01:01:50,960 --> 01:01:54,080
Speaker 1: but used as the way it's intended, fundamentals do not

1190
01:01:54,280 --> 01:01:57,000
Speaker 1: work for timing because they're just too broad, much too broad.

1191
01:01:57,480 --> 01:02:02,120
Speaker 1: Ralph Acampora, I think had the greatest explanation on the

1192
01:02:02,720 --> 01:02:06,800
Speaker 1: tension between fundamentals and technicals. I actually have a quote

1193
01:02:06,800 --> 01:02:10,360
Speaker 1: of his Fundamentals tell you what to buy, technicals tell

1194
01:02:10,400 --> 01:02:12,120
Speaker 1: you when. Yeah, that's a good way to do it

1195
01:02:12,160 --> 01:02:13,880
Speaker 1: and you could use fundamentals of that you can't say

1196
01:02:13,920 --> 01:02:16,000
Speaker 1: you can say well yeah, and if you're a good

1197
01:02:16,040 --> 01:02:19,160
Speaker 1: fundamental analyst, you can get say well this market should

1198
01:02:19,160 --> 01:02:21,040
Speaker 1: go up over time. I wanted to look for only

1199
01:02:21,120 --> 01:02:24,680
Speaker 1: by trade. That's that's a that's a good use of fundamentals.

1200
01:02:25,280 --> 01:02:26,880
Speaker 1: And the way I got into technicals because I was

1201
01:02:26,920 --> 01:02:29,920
Speaker 1: a research director and uh, one of my analysts was

1202
01:02:29,960 --> 01:02:32,400
Speaker 1: a technical anals. So I didn't do anything, but I

1203
01:02:32,520 --> 01:02:34,640
Speaker 1: noticed that of all the analysts, he was the only

1204
01:02:34,760 --> 01:02:38,640
Speaker 1: one who was doing well, right, And so I didn't

1205
01:02:38,680 --> 01:02:40,480
Speaker 1: want I like to think I was a little bit

1206
01:02:40,520 --> 01:02:42,160
Speaker 1: open minded. So I said, Steve, you tell me what

1207
01:02:42,240 --> 01:02:45,480
Speaker 1: you do and he started, you know and Steve who

1208
01:02:45,520 --> 01:02:48,240
Speaker 1: which okay, So I showed that absolutely Steve Kronowits And

1209
01:02:48,640 --> 01:02:51,280
Speaker 1: unfortunately Steve Proms was I know, he was a very

1210
01:02:51,320 --> 01:02:54,480
Speaker 1: close friend and he unfortunately died just a couple of

1211
01:02:54,520 --> 01:02:56,480
Speaker 1: months ago. So I was, you know, probably the big

1212
01:02:56,600 --> 01:03:00,280
Speaker 1: the worst loss I had as a friend in my life. Yeah, yeah,

1213
01:03:00,800 --> 01:03:03,720
Speaker 1: just like he was a great person. Um, but Steve

1214
01:03:03,800 --> 01:03:05,880
Speaker 1: was the one who talked me techno analysis. When when

1215
01:03:05,920 --> 01:03:08,120
Speaker 1: you said tell me what you do, how does he

1216
01:03:08,520 --> 01:03:11,000
Speaker 1: So he said you know, well, he made me understand

1217
01:03:11,120 --> 01:03:13,240
Speaker 1: why these things work. You know, so I came in

1218
01:03:13,320 --> 01:03:15,439
Speaker 1: with the well, this is the pocket of stuff work,

1219
01:03:15,520 --> 01:03:18,800
Speaker 1: and they appreciate that it works because it reflects everything

1220
01:03:18,840 --> 01:03:21,680
Speaker 1: going to market. It's reflecting the psychology of what you're seeing.

1221
01:03:21,680 --> 01:03:24,400
Speaker 1: You're seeing fundamentals in the charts. It's just you're seeing

1222
01:03:24,480 --> 01:03:26,919
Speaker 1: him through the price action. And that's what the people

1223
01:03:26,960 --> 01:03:29,160
Speaker 1: don't understand that. People say, oh, it's a bunch of

1224
01:03:29,200 --> 01:03:33,200
Speaker 1: mambo jumbo and all that. Well, no, because anything that's fundamental,

1225
01:03:33,280 --> 01:03:36,440
Speaker 1: people who were moving the markets for fundamentals, you they

1226
01:03:36,520 --> 01:03:38,760
Speaker 1: can't hide what they're doing. It shows up in the supply,

1227
01:03:39,400 --> 01:03:41,200
Speaker 1: it shows up in the price. So so that leads

1228
01:03:41,240 --> 01:03:43,640
Speaker 1: to a question I had written down to ask you,

1229
01:03:43,800 --> 01:03:48,080
Speaker 1: what do you think people misunderstand about technicals? That that

1230
01:03:48,280 --> 01:03:50,680
Speaker 1: that's that's the key thing, that that the technicals aren't

1231
01:03:50,720 --> 01:03:53,160
Speaker 1: some mysterious thing. They are the reflection of all the

1232
01:03:53,240 --> 01:03:57,200
Speaker 1: participants in the market. So they do reflect fundamentals. Another thing,

1233
01:03:57,320 --> 01:03:58,840
Speaker 1: and this is one of the main one of the

1234
01:03:58,920 --> 01:04:01,520
Speaker 1: main things, like my complete guard the futures market, one

1235
01:04:01,520 --> 01:04:03,880
Speaker 1: of my main points is you don't when you and

1236
01:04:04,000 --> 01:04:06,480
Speaker 1: I go through lots of charged analysis, techno analysis all

1237
01:04:06,600 --> 01:04:10,160
Speaker 1: that I say, it's not so much interpreting when these

1238
01:04:10,200 --> 01:04:13,120
Speaker 1: patterns and it's a lot of subjectivity. What's even more

1239
01:04:13,200 --> 01:04:16,560
Speaker 1: important is when things that should work one way based

1240
01:04:16,600 --> 01:04:20,000
Speaker 1: upon the techno analysis don't work. So what I call

1241
01:04:20,080 --> 01:04:22,560
Speaker 1: a sort of a failed signal is more important than

1242
01:04:22,800 --> 01:04:25,600
Speaker 1: than a classical signal tells you something is happened. So

1243
01:04:25,680 --> 01:04:28,080
Speaker 1: if you get a you get a market. Hey, this

1244
01:04:28,240 --> 01:04:32,000
Speaker 1: is actually my favorite example is this is really terrible

1245
01:04:32,080 --> 01:04:35,360
Speaker 1: news and and the stock actually rallied on. That's right,

1246
01:04:35,440 --> 01:04:37,080
Speaker 1: that's that's the type of thing. And but I'll give

1247
01:04:37,080 --> 01:04:40,720
Speaker 1: you like one example that the personally, Uh, it was

1248
01:04:40,760 --> 01:04:43,440
Speaker 1: a week or two ago. It was along the bonds

1249
01:04:43,440 --> 01:04:45,680
Speaker 1: of the market was going up, and then one morning

1250
01:04:45,800 --> 01:04:49,120
Speaker 1: gaps into highs. I'm I'm doing great, right, and it's

1251
01:04:49,160 --> 01:04:51,000
Speaker 1: sort of and then during the day just goes down

1252
01:04:51,080 --> 01:04:53,520
Speaker 1: and starts going down and down and down and down,

1253
01:04:54,080 --> 01:04:55,920
Speaker 1: and I say, hey, that is just not the right

1254
01:04:56,000 --> 01:04:57,800
Speaker 1: type of action. And I had stops in so if

1255
01:04:57,800 --> 01:04:59,800
Speaker 1: it got close to unchanged, I'd be out. I got out.

1256
01:05:00,280 --> 01:05:02,439
Speaker 1: And yeah, now with Brexit is going back up again,

1257
01:05:02,480 --> 01:05:05,160
Speaker 1: but it had a good size reaction, and that's that's

1258
01:05:05,160 --> 01:05:07,480
Speaker 1: a good example of you had a gap breakout, it

1259
01:05:07,480 --> 01:05:10,080
Speaker 1: should have been strong, and it failed. It came back

1260
01:05:10,120 --> 01:05:13,120
Speaker 1: into you know, so that's again so to me, that's

1261
01:05:13,160 --> 01:05:16,720
Speaker 1: a that's a much better signal than the breakout. So

1262
01:05:17,400 --> 01:05:20,720
Speaker 1: today we're sitting in this room with one to three, four,

1263
01:05:20,880 --> 01:05:24,959
Speaker 1: five like ten monitors and you know, five computers hooked

1264
01:05:25,000 --> 01:05:30,400
Speaker 1: up to a network of industrial military grade computing technology.

1265
01:05:31,040 --> 01:05:37,080
Speaker 1: What has all of this computing horsepower and and all

1266
01:05:37,200 --> 01:05:41,200
Speaker 1: of this charting software done to the world of technicals?

1267
01:05:41,560 --> 01:05:46,120
Speaker 1: And I say that with with the admission that I

1268
01:05:46,280 --> 01:05:49,080
Speaker 1: came up with guys who would do charts by hands

1269
01:05:49,320 --> 01:05:52,640
Speaker 1: every night. And and the traders there, traders who are

1270
01:05:52,680 --> 01:05:54,680
Speaker 1: interviewed who still in system. You know, it's a little

1271
01:05:54,720 --> 01:05:56,360
Speaker 1: insistem to or met you know, that was a little

1272
01:05:56,360 --> 01:05:58,800
Speaker 1: system doing it by hand. Uh. And as far as

1273
01:05:58,880 --> 01:06:01,360
Speaker 1: I go for exam call, I don't use any of

1274
01:06:01,400 --> 01:06:04,120
Speaker 1: the indicatorsn't I just look at charts. I mean, I'm

1275
01:06:04,120 --> 01:06:07,680
Speaker 1: more comfortable of that. And my attitude is I think

1276
01:06:07,760 --> 01:06:10,760
Speaker 1: all these indicators are just vivetives or price anyway. Yeah,

1277
01:06:10,840 --> 01:06:15,080
Speaker 1: so and my eneving averages and oscillators and all the Yeah,

1278
01:06:15,400 --> 01:06:17,840
Speaker 1: they're just they're just formulations of price, so you're really

1279
01:06:17,880 --> 01:06:19,480
Speaker 1: not getting anything more and price, you're just getting it

1280
01:06:19,520 --> 01:06:22,160
Speaker 1: in a different type of picture. And my analogy for

1281
01:06:22,240 --> 01:06:24,919
Speaker 1: that is it's, you know, you take something like sunglasses,

1282
01:06:25,000 --> 01:06:27,280
Speaker 1: and some people are like an amber collar better. So

1283
01:06:27,280 --> 01:06:29,320
Speaker 1: I'm like, you know, bluish callar better. You know, it's

1284
01:06:29,360 --> 01:06:32,360
Speaker 1: a personal taste. And and some people who work one

1285
01:06:32,440 --> 01:06:33,880
Speaker 1: call it work better. For some people who one call

1286
01:06:33,920 --> 01:06:36,560
Speaker 1: it work better. For other people, it's amount of personal taste.

1287
01:06:36,600 --> 01:06:38,360
Speaker 1: So in my case, I just like the plain charts,

1288
01:06:38,440 --> 01:06:41,560
Speaker 1: plain vanilla clear. But but not you're not an Elliott

1289
01:06:41,560 --> 01:06:44,880
Speaker 1: wave guy, You're not a demark. I'm not out of again,

1290
01:06:45,200 --> 01:06:48,880
Speaker 1: an analyst or Fibonacci or my approach, and again I'm

1291
01:06:48,880 --> 01:06:51,240
Speaker 1: not a great trader, but my approach basically is just

1292
01:06:51,640 --> 01:06:54,160
Speaker 1: look at the charts for an opinion. Could be trend,

1293
01:06:54,480 --> 01:06:57,360
Speaker 1: could be trend following type, trade, could be counter trend.

1294
01:06:57,440 --> 01:06:59,880
Speaker 1: But evil way, it's got some sort of reasonable of

1295
01:06:59,920 --> 01:07:02,160
Speaker 1: the charts while I'm looking at it that way, And

1296
01:07:02,600 --> 01:07:05,240
Speaker 1: in every case, I'm putting in a stop along with

1297
01:07:05,320 --> 01:07:08,160
Speaker 1: the entry. So so does all let me ask you

1298
01:07:08,200 --> 01:07:11,600
Speaker 1: a slightly different questions, does all this charting software that's

1299
01:07:11,640 --> 01:07:15,440
Speaker 1: out there. Uh so anyone could have access to an

1300
01:07:15,480 --> 01:07:20,000
Speaker 1: immense amount of technical analysis that really wasn't all that

1301
01:07:20,040 --> 01:07:23,520
Speaker 1: available when I was starting. What has that done to

1302
01:07:23,600 --> 01:07:26,880
Speaker 1: the world of trading? If anything? I don't know. Yeah.

1303
01:07:26,960 --> 01:07:29,920
Speaker 1: I think for some people they learned to use some

1304
01:07:30,080 --> 01:07:32,560
Speaker 1: of those indicators in certain ways that work for them,

1305
01:07:32,640 --> 01:07:34,760
Speaker 1: and so it gives them there's like it's much more variety.

1306
01:07:34,800 --> 01:07:36,240
Speaker 1: And then so far as people need to find a

1307
01:07:36,280 --> 01:07:39,360
Speaker 1: way that works for them, it makes it possible. Just

1308
01:07:39,480 --> 01:07:42,280
Speaker 1: multiplies tremendously the amount of ways people can trade the markets.

1309
01:07:42,280 --> 01:07:45,040
Speaker 1: So I guess in that way it's probably useful. But

1310
01:07:45,680 --> 01:07:48,280
Speaker 1: no matter back then and now there's only gonna be all,

1311
01:07:48,320 --> 01:07:50,040
Speaker 1: you know, smaller number of people that will excel in

1312
01:07:50,120 --> 01:07:53,040
Speaker 1: the markets. Alright, so I know I only have you

1313
01:07:53,320 --> 01:07:56,880
Speaker 1: for a few minutes longer. Let me get to my

1314
01:07:57,200 --> 01:08:01,840
Speaker 1: list of favorite questions and start plowing into this. Let's

1315
01:08:01,880 --> 01:08:05,080
Speaker 1: let's jump right in with the mentors. So you mentioned

1316
01:08:05,920 --> 01:08:08,920
Speaker 1: my mentors. Yeah, so the one mentor I really have

1317
01:08:09,040 --> 01:08:11,160
Speaker 1: one mentor, and that mentor would be would be Steve

1318
01:08:11,240 --> 01:08:14,040
Speaker 1: Chronowitz because he's he's a fellow. Taught me classical chart

1319
01:08:14,080 --> 01:08:18,760
Speaker 1: analysis and uh yeah, and I didn't read actually never

1320
01:08:18,840 --> 01:08:20,400
Speaker 1: even read and I never I had to ment this.

1321
01:08:20,479 --> 01:08:22,479
Speaker 1: I never read the classical charge books and everything else

1322
01:08:22,760 --> 01:08:25,600
Speaker 1: McGee and yeah, which was not. I just ended up

1323
01:08:25,680 --> 01:08:29,240
Speaker 1: not because I learned. I learned the basic things from

1324
01:08:29,320 --> 01:08:31,839
Speaker 1: from Steve and then from probably markets. I fund everybody,

1325
01:08:31,960 --> 01:08:34,040
Speaker 1: if you look at charts, you get your own biases

1326
01:08:34,080 --> 01:08:37,760
Speaker 1: certain things. And uh, I I'll mention another fellow who's

1327
01:08:37,760 --> 01:08:42,000
Speaker 1: a close friend, Peter Brandt. And not that he's a friend,

1328
01:08:42,040 --> 01:08:46,559
Speaker 1: although Pete is well known on Twitter and traders who

1329
01:08:46,600 --> 01:08:49,439
Speaker 1: follow him. Yeah, so uh not that not that I

1330
01:08:49,560 --> 01:08:53,000
Speaker 1: meant to say, not that he's a mentor um because

1331
01:08:53,320 --> 01:08:56,639
Speaker 1: but but he is. He and I are very similar

1332
01:08:56,760 --> 01:08:58,840
Speaker 1: in the type of approach. I mean we may not

1333
01:08:58,880 --> 01:09:00,920
Speaker 1: look at the child and get the same opinion sometimes yes,

1334
01:09:00,960 --> 01:09:03,040
Speaker 1: sometimes No, that's not what we're similar. But it's the

1335
01:09:03,120 --> 01:09:05,479
Speaker 1: same type of thought that you know you're only gonna

1336
01:09:05,479 --> 01:09:07,360
Speaker 1: win a certain sentences your time. You always know your

1337
01:09:07,439 --> 01:09:10,040
Speaker 1: risk point is much more important. To keep your losses

1338
01:09:10,120 --> 01:09:14,280
Speaker 1: controlled and uh, and be unemotional and just use just

1339
01:09:14,560 --> 01:09:17,240
Speaker 1: use the information. Don't try to make the markets work,

1340
01:09:17,360 --> 01:09:19,160
Speaker 1: you know, do what you wanted to do. Just follow

1341
01:09:19,200 --> 01:09:21,280
Speaker 1: what the markets are telling you and it's a lot

1342
01:09:21,360 --> 01:09:26,920
Speaker 1: of similar philosophy, so not not necessarily a mentor question,

1343
01:09:27,080 --> 01:09:30,479
Speaker 1: but what other of all the traders and investors we mentioned,

1344
01:09:30,560 --> 01:09:36,080
Speaker 1: who who influenced you philosophically? It sounds like Brandon you

1345
01:09:36,200 --> 01:09:39,280
Speaker 1: are very sympatico. But in the formative days. But yeah,

1346
01:09:39,280 --> 01:09:42,240
Speaker 1: in the formative days. Um well, I I would say,

1347
01:09:42,479 --> 01:09:44,360
Speaker 1: of all, there are a number of people who made

1348
01:09:44,400 --> 01:09:46,840
Speaker 1: the same point. But as a line that sticks in

1349
01:09:46,960 --> 01:09:50,880
Speaker 1: my mind, U maybe the single most important sentence that

1350
01:09:50,960 --> 01:09:54,320
Speaker 1: anybody uttered, you know, okay, that that's a that's something

1351
01:09:54,360 --> 01:09:58,360
Speaker 1: to get people right right is Bruce Covernor's line is

1352
01:09:58,400 --> 01:10:00,400
Speaker 1: always know where you're gonna get out before you get in.

1353
01:10:01,479 --> 01:10:04,400
Speaker 1: You know, I started on a desk with the head

1354
01:10:04,439 --> 01:10:09,080
Speaker 1: of the desk was a marine jungle combat instructor. This

1355
01:10:09,160 --> 01:10:13,559
Speaker 1: is a big, badass guy, and you know, he had

1356
01:10:13,680 --> 01:10:16,640
Speaker 1: the same exact line, but he would always couch it

1357
01:10:16,760 --> 01:10:20,400
Speaker 1: in marine terms. He said, before you take you're gonna

1358
01:10:20,400 --> 01:10:22,160
Speaker 1: take a village, You're gonna take a house, You're gonna

1359
01:10:22,200 --> 01:10:24,960
Speaker 1: take a hell. You have to know we're getting in,

1360
01:10:25,320 --> 01:10:27,960
Speaker 1: we're getting out, but we have to know what's our exit,

1361
01:10:28,080 --> 01:10:29,960
Speaker 1: and if that exit is blocked, what's our plan B

1362
01:10:30,080 --> 01:10:32,640
Speaker 1: and what's our plans? Say you always have if you

1363
01:10:32,720 --> 01:10:35,120
Speaker 1: want to get out alive, you have to know what

1364
01:10:35,320 --> 01:10:38,760
Speaker 1: your exit strategy is and what the alternatives are if

1365
01:10:38,840 --> 01:10:42,880
Speaker 1: something MUCKs up that person. And that sounds very much

1366
01:10:42,960 --> 01:10:46,160
Speaker 1: like what what Coke said, only only that's got a

1367
01:10:46,200 --> 01:10:48,680
Speaker 1: little more mud and and and teeth in it. Well,

1368
01:10:48,880 --> 01:10:50,759
Speaker 1: the one thing I would add to that is also

1369
01:10:50,960 --> 01:10:53,920
Speaker 1: that the key about it is that what he's really

1370
01:10:54,000 --> 01:10:56,760
Speaker 1: saying there is dude, before you get in, because that's

1371
01:10:56,800 --> 01:10:59,439
Speaker 1: when used to have objectivity. You're your objective kind of

1372
01:10:59,560 --> 01:11:01,880
Speaker 1: motion it. Don't do it, don't have bullets or your

1373
01:11:01,880 --> 01:11:03,679
Speaker 1: analogy works. Don't do it in the heat of combat

1374
01:11:04,560 --> 01:11:08,560
Speaker 1: when you're playing. That's exactly right that that's my analogy

1375
01:11:08,800 --> 01:11:11,559
Speaker 1: is you know that that card in the seat back

1376
01:11:11,640 --> 01:11:13,920
Speaker 1: in front of you, Well you're on the ground. That's

1377
01:11:13,920 --> 01:11:15,639
Speaker 1: when you want to read it and see where where

1378
01:11:15,640 --> 01:11:20,320
Speaker 1: the right, where the exits, where's the flotation devices? Not

1379
01:11:20,720 --> 01:11:23,160
Speaker 1: oh look the wing is on fire, which was on

1380
01:11:23,240 --> 01:11:26,719
Speaker 1: the news today at thirty feet probably not the time

1381
01:11:26,800 --> 01:11:29,479
Speaker 1: where you're gonna have the presence of mind to learn

1382
01:11:29,520 --> 01:11:31,880
Speaker 1: anything from that. So so let's talk a little bit

1383
01:11:31,880 --> 01:11:35,320
Speaker 1: about books. We've been talking about your books? What other

1384
01:11:35,439 --> 01:11:39,519
Speaker 1: books have you read fiction, nonfiction, investing, not what other

1385
01:11:39,560 --> 01:11:43,240
Speaker 1: books have you found to be Hey, people should read this? Okay, well,

1386
01:11:43,280 --> 01:11:47,120
Speaker 1: I I'd recommend as as authors um for for if no,

1387
01:11:47,479 --> 01:11:50,200
Speaker 1: even for entertaining purposes. You know, anything Michael Lewis has

1388
01:11:50,240 --> 01:11:53,360
Speaker 1: written is just I think Michael is one of great

1389
01:11:53,360 --> 01:11:56,680
Speaker 1: authors of all time. I mean just surmendously entertaining any

1390
01:11:56,880 --> 01:11:59,439
Speaker 1: but also a brilliant talent. You take a book like

1391
01:11:59,560 --> 01:12:01,360
Speaker 1: The Big Ord, and I gonna appreciate this because I

1392
01:12:01,439 --> 01:12:03,160
Speaker 1: wrote an ente for the market Wizards, I had to

1393
01:12:03,160 --> 01:12:05,760
Speaker 1: cover some of the same territory. Uh To take the

1394
01:12:05,920 --> 01:12:08,519
Speaker 1: complexity what went on there and to make it entertaining

1395
01:12:08,560 --> 01:12:13,200
Speaker 1: and understandable is a talent. Uh So anything he consistently

1396
01:12:13,400 --> 01:12:17,880
Speaker 1: finds these angles to to bring and these personalities to

1397
01:12:17,960 --> 01:12:21,960
Speaker 1: tell the story just just wonderful. I will admit I

1398
01:12:22,120 --> 01:12:25,080
Speaker 1: have never read one of his books. I've read all

1399
01:12:25,120 --> 01:12:27,280
Speaker 1: of his books except one. It's eat Way to Say It.

1400
01:12:27,680 --> 01:12:30,439
Speaker 1: And I'm saving The blind Side from my next vacation

1401
01:12:31,040 --> 01:12:33,920
Speaker 1: because I always read his books and I will plas

1402
01:12:34,160 --> 01:12:38,680
Speaker 1: him in a day, The Big Short a day, Flashboys

1403
01:12:38,960 --> 01:12:42,120
Speaker 1: a day, money Ball a day, You sit on the beach,

1404
01:12:42,160 --> 01:12:44,759
Speaker 1: it's like, wow, yeah it was. It's it's it's it's entertaining,

1405
01:12:44,760 --> 01:12:48,559
Speaker 1: you learn stuff, it's insightful, it's creative. Yeah. So uh

1406
01:12:49,520 --> 01:12:52,240
Speaker 1: another offer I would put you know, very high up

1407
01:12:52,360 --> 01:12:54,960
Speaker 1: and and who influence I think will stay for a

1408
01:12:55,040 --> 01:12:58,360
Speaker 1: long time does not seem to tell that. Uh So,

1409
01:12:59,400 --> 01:13:02,120
Speaker 1: I guess Xwan is probably the most famous book. Personally

1410
01:13:02,400 --> 01:13:07,240
Speaker 1: by randomness is more famous and more useful, well, personally

1411
01:13:07,479 --> 01:13:10,000
Speaker 1: fooled by randomness and and tally would not agree with me.

1412
01:13:10,160 --> 01:13:12,760
Speaker 1: But but because I think he thinks block Swan is

1413
01:13:12,800 --> 01:13:15,600
Speaker 1: his best book, I think I'm not sure, but I

1414
01:13:15,880 --> 01:13:18,439
Speaker 1: I think Fooled by Randomness he is not, just because

1415
01:13:18,439 --> 01:13:19,920
Speaker 1: it was the first of those type of books, but

1416
01:13:20,000 --> 01:13:23,120
Speaker 1: it really got all the key lessons and it's it's

1417
01:13:23,160 --> 01:13:26,040
Speaker 1: so much captured how a lot of what people think

1418
01:13:26,200 --> 01:13:29,120
Speaker 1: is skill is really luck and and confused two and

1419
01:13:29,280 --> 01:13:33,600
Speaker 1: and also not appreciate the fact that there are the

1420
01:13:34,200 --> 01:13:37,360
Speaker 1: tail nature of events in the markets as uh, and

1421
01:13:38,080 --> 01:13:40,160
Speaker 1: that and and so all those themes really come out

1422
01:13:40,280 --> 01:13:42,320
Speaker 1: very well. It's a shame that he's not going to

1423
01:13:42,439 --> 01:13:47,200
Speaker 1: hear this interview because I tweeted, I retweeted something somebody

1424
01:13:47,240 --> 01:13:50,160
Speaker 1: else had written and he was so angry at that

1425
01:13:50,320 --> 01:13:54,160
Speaker 1: person that he not only did he block them on Twitter,

1426
01:13:54,760 --> 01:13:56,560
Speaker 1: but he blocked me. Oh, I know it was. It

1427
01:13:56,640 --> 01:14:01,240
Speaker 1: was Noah Smith, who writes for Who's and let me go?

1428
01:14:01,400 --> 01:14:06,280
Speaker 1: So let me give Aroduce here. Noah Smith, who's a blogger, economist, blogger,

1429
01:14:06,400 --> 01:14:10,560
Speaker 1: and tollaly By. Noah hates him. But Noah Smith is

1430
01:14:10,680 --> 01:14:14,600
Speaker 1: for a guy who writes short, succinct articles on on

1431
01:14:14,760 --> 01:14:20,080
Speaker 1: economics that are pertinent. They're they're just extremely well explained.

1432
01:14:20,400 --> 01:14:23,040
Speaker 1: He's not He's not a liberal. He's not a conservative.

1433
01:14:23,080 --> 01:14:26,120
Speaker 1: He's That's why I love about Let me let me

1434
01:14:26,200 --> 01:14:28,519
Speaker 1: share a little inside baseball with you about Noah Smith.

1435
01:14:29,240 --> 01:14:32,360
Speaker 1: So I'm the guy who brought Noah Smith to Bloomberg View.

1436
01:14:32,520 --> 01:14:35,679
Speaker 1: How how do I know Noah Smith? So he comes.

1437
01:14:35,800 --> 01:14:38,160
Speaker 1: Listen to his background. It's really fascinating. I think he

1438
01:14:38,320 --> 01:14:41,760
Speaker 1: comes out of Berkeley with a degree in physics. Then

1439
01:14:41,840 --> 01:14:45,360
Speaker 1: he goes to Michigan University of Michigan to to get

1440
01:14:45,479 --> 01:14:48,920
Speaker 1: his PhD in economics. Then he's teaching at my alma

1441
01:14:49,000 --> 01:14:52,280
Speaker 1: matera State University of New York at Stony Brook in

1442
01:14:52,360 --> 01:14:54,800
Speaker 1: the economics department I've spoken to his class a couple

1443
01:14:54,800 --> 01:14:59,559
Speaker 1: of times, and when Bloomberg View was coming together. Um

1444
01:15:00,000 --> 01:15:02,200
Speaker 1: I every now and then would say, Hey, are you

1445
01:15:02,280 --> 01:15:05,360
Speaker 1: looking for a guy to cover this or that? Yes,

1446
01:15:05,439 --> 01:15:08,120
Speaker 1: send the name. So a number of people I referred

1447
01:15:08,160 --> 01:15:13,000
Speaker 1: them to ultimately became writers here. I always loved for

1448
01:15:13,120 --> 01:15:16,679
Speaker 1: the same reasons that you do Noah Smith's work. He's

1449
01:15:16,680 --> 01:15:21,439
Speaker 1: a fascinating guy. Then add to that just absolutely brilliant,

1450
01:15:21,479 --> 01:15:25,040
Speaker 1: smart as a whip. Add to that, PSC speaks fluent

1451
01:15:25,200 --> 01:15:28,920
Speaker 1: Japanese and spends summers in Japan every year for the

1452
01:15:28,960 --> 01:15:33,800
Speaker 1: past decade. This is really an interesting, unusual talk about

1453
01:15:33,800 --> 01:15:38,200
Speaker 1: eclectic physics, economics Japanese. But he right, and he writes

1454
01:15:38,400 --> 01:15:43,280
Speaker 1: very clearly, very very understandable, takes really complex issues and

1455
01:15:43,400 --> 01:15:47,519
Speaker 1: makes it really accessible. From what I followed with him

1456
01:15:47,560 --> 01:15:51,639
Speaker 1: and Teleb, he used the concept of a black swan,

1457
01:15:52,520 --> 01:15:55,840
Speaker 1: apparently in a way that Teleb was not happy about. Now,

1458
01:15:56,000 --> 01:15:59,640
Speaker 1: last I checked, TELEB doesn't have the trademark on a

1459
01:15:59,720 --> 01:16:02,400
Speaker 1: black swan, meaning we were expecting this and we got

1460
01:16:02,520 --> 01:16:04,600
Speaker 1: something else. Oh and by the way, it was a

1461
01:16:04,680 --> 01:16:09,280
Speaker 1: tail event. It was a low probability but significant outcome event.

1462
01:16:10,439 --> 01:16:13,960
Speaker 1: I think the two of them use the phrase slightly differently.

1463
01:16:15,120 --> 01:16:17,439
Speaker 1: And look, I have no beef with with to Leb,

1464
01:16:17,520 --> 01:16:20,559
Speaker 1: and I love Noah Smith's work. He went so postal

1465
01:16:20,920 --> 01:16:24,400
Speaker 1: at him. To Leb went so postal at Smith for

1466
01:16:24,680 --> 01:16:27,799
Speaker 1: for writing this. He was so angry at me merely

1467
01:16:27,880 --> 01:16:31,479
Speaker 1: for retweeting it. He goes, I just can't continent you

1468
01:16:32,200 --> 01:16:34,200
Speaker 1: you retweeting this, and I have to block you so

1469
01:16:34,520 --> 01:16:37,640
Speaker 1: and we should tell people for Noah Smith. His his

1470
01:16:37,760 --> 01:16:40,920
Speaker 1: blog is called no No No opinion, with the word

1471
01:16:41,000 --> 01:16:43,960
Speaker 1: Noah an opinion to combine sort of a uh, I

1472
01:16:44,080 --> 01:16:46,960
Speaker 1: forgot the word of what what what that's called? When

1473
01:16:47,040 --> 01:16:49,479
Speaker 1: you when you combine? Uh, it's on the tip of

1474
01:16:49,560 --> 01:16:53,679
Speaker 1: my tongue. Um. I I don't have an issue with Teleb,

1475
01:16:53,760 --> 01:16:57,519
Speaker 1: but I find his his work to be fascinating. I

1476
01:16:57,640 --> 01:17:00,680
Speaker 1: don't think he what he does on Twitter is a

1477
01:17:00,720 --> 01:17:04,560
Speaker 1: good look, crushing it, you know, getting into fights with

1478
01:17:04,640 --> 01:17:07,160
Speaker 1: people at the time. But I understand it. Listen, we

1479
01:17:07,240 --> 01:17:11,519
Speaker 1: all have a certain amount of road rage that doesn't

1480
01:17:11,560 --> 01:17:17,640
Speaker 1: suffer that doesn't suffer fools, but exactly exactly. But I

1481
01:17:17,720 --> 01:17:21,960
Speaker 1: think sometimes maybe he may confuse you know, uh, who

1482
01:17:22,040 --> 01:17:24,280
Speaker 1: the fools are? You know? So yeah, no, that that's

1483
01:17:24,320 --> 01:17:29,920
Speaker 1: exactly listen if when over the weekend following Brexit, I

1484
01:17:30,680 --> 01:17:34,519
Speaker 1: saw a data point that said, um, you know, you

1485
01:17:34,560 --> 01:17:38,640
Speaker 1: look at how the older folks voted, they voted overwhelmingly

1486
01:17:38,720 --> 01:17:41,760
Speaker 1: to leave. And you look at how the younger folks vote,

1487
01:17:41,800 --> 01:17:44,519
Speaker 1: and they voted overwhelming in these stay And I saw

1488
01:17:44,680 --> 01:17:47,800
Speaker 1: I tweeted this data point out that had come from

1489
01:17:47,840 --> 01:17:53,400
Speaker 1: one of the UK papers, and and someone tweeted tweeted

1490
01:17:53,439 --> 01:17:58,200
Speaker 1: the line with there's a British soldier saluting in a

1491
01:17:58,400 --> 01:18:02,160
Speaker 1: in a huge cemetery and they tweeted, yeah, what did

1492
01:18:02,200 --> 01:18:05,000
Speaker 1: the old folks ever do for the UK? And I

1493
01:18:05,160 --> 01:18:07,160
Speaker 1: had to call the guy out. I'm like, well, if

1494
01:18:07,200 --> 01:18:10,600
Speaker 1: you're eighty and you voted for Brexit, that's fantastic. You

1495
01:18:10,640 --> 01:18:13,400
Speaker 1: were three years old when World War two started, so

1496
01:18:13,680 --> 01:18:18,120
Speaker 1: please do some basic math and stop lying about this.

1497
01:18:19,000 --> 01:18:21,880
Speaker 1: You already won, but you don't have to. You could

1498
01:18:21,920 --> 01:18:23,720
Speaker 1: stop lying now that you won. You don't have to.

1499
01:18:24,160 --> 01:18:27,479
Speaker 1: And I just I felt myself wanting to go full

1500
01:18:27,560 --> 01:18:32,640
Speaker 1: talent the guy. But there's a difference between calling out

1501
01:18:32,720 --> 01:18:36,240
Speaker 1: someone who's intellectually dusanest someone who's a liar not suffering

1502
01:18:36,320 --> 01:18:38,280
Speaker 1: fools glad, And I was very surprised when I saw

1503
01:18:38,439 --> 01:18:40,000
Speaker 1: there was some you know, comments that he was inking.

1504
01:18:40,000 --> 01:18:41,760
Speaker 1: I didn't really read the whole thing, not see him

1505
01:18:41,800 --> 01:18:44,960
Speaker 1: come back on BlackBerry and and no, we we miss you,

1506
01:18:45,080 --> 01:18:47,600
Speaker 1: we love you, and and be less of a By

1507
01:18:47,640 --> 01:18:49,720
Speaker 1: the way, he's another guy that I would love to

1508
01:18:49,800 --> 01:18:52,559
Speaker 1: have on the show, but I'm afraid he'll just chew

1509
01:18:52,680 --> 01:18:55,720
Speaker 1: the furniture. He's you know, I've met him, I've had

1510
01:18:55,800 --> 01:18:57,760
Speaker 1: lunch with him. I think he's an interesting guy. He's

1511
01:18:57,800 --> 01:19:02,800
Speaker 1: certainly smart enough. I maybe it's a generational thing. I

1512
01:19:02,880 --> 01:19:05,800
Speaker 1: got enough of a foot in the under fifty, asked him.

1513
01:19:07,320 --> 01:19:09,400
Speaker 1: I'd ask him on Twitter, but I'm but I'm blocked.

1514
01:19:09,479 --> 01:19:13,559
Speaker 1: But all right, let's let's not um have this. Let's

1515
01:19:13,640 --> 01:19:17,000
Speaker 1: let's go back to what other books besides Michael Lewis

1516
01:19:17,040 --> 01:19:18,800
Speaker 1: and Not seemed to like. Okay, what are the books

1517
01:19:18,800 --> 01:19:21,080
Speaker 1: do you find? Well? I mentioned Reminiscence of the Stock Operators,

1518
01:19:22,600 --> 01:19:25,120
Speaker 1: Beat the Deal or Beat the Market, and then my,

1519
01:19:25,520 --> 01:19:28,760
Speaker 1: uh yeah, my favorite book, my personal favorite book of

1520
01:19:28,840 --> 01:19:31,240
Speaker 1: all time. One of the only books I've read several

1521
01:19:31,320 --> 01:19:35,080
Speaker 1: times is a book called Endurance about Shock Shackleton's uh

1522
01:19:35,840 --> 01:19:38,840
Speaker 1: endurance Endurance, So it was original book there has been

1523
01:19:38,840 --> 01:19:43,160
Speaker 1: several books about Shackleton that the Anton. Now, yeah, there's

1524
01:19:43,160 --> 01:19:45,400
Speaker 1: a movies and stuff I think well have been. Uh,

1525
01:19:45,880 --> 01:19:48,080
Speaker 1: but that first book, I think it was by Lansing,

1526
01:19:49,040 --> 01:19:51,479
Speaker 1: which was written if I remember I remember, I think

1527
01:19:51,479 --> 01:19:53,960
Speaker 1: it was written fifty five. But it is the most

1528
01:19:54,040 --> 01:19:57,920
Speaker 1: compelling story. Uh. It is just just so tell quickly

1529
01:19:58,000 --> 01:20:01,400
Speaker 1: tell the shaff So the shack the story an antontic

1530
01:20:01,479 --> 01:20:05,000
Speaker 1: expedition bottom line gets stuck trapped in the ice. Uh

1531
01:20:05,160 --> 01:20:08,000
Speaker 1: and in middle life is no, they just have nothing

1532
01:20:08,160 --> 01:20:12,400
Speaker 1: and uh they by all means they should have been. Yeah,

1533
01:20:12,560 --> 01:20:15,960
Speaker 1: they hunted to some extent, but they couldn't be rescued

1534
01:20:16,040 --> 01:20:19,200
Speaker 1: for for years. But I almost don't want to say

1535
01:20:19,280 --> 01:20:22,920
Speaker 1: what happened or what happened with survival because because it's

1536
01:20:22,960 --> 01:20:24,400
Speaker 1: because you don't know. If you don't know, it makes

1537
01:20:24,520 --> 01:20:28,320
Speaker 1: much more interesting. But as a tale of survival, it is.

1538
01:20:29,320 --> 01:20:32,479
Speaker 1: If it's not the best tale of survival ever written,

1539
01:20:33,240 --> 01:20:36,000
Speaker 1: it's um and you you know you an endurance, I

1540
01:20:36,040 --> 01:20:41,040
Speaker 1: mean the endurance. Endurance is well titled and there are

1541
01:20:41,080 --> 01:20:43,680
Speaker 1: so many images in there and so many, so many

1542
01:20:43,880 --> 01:20:47,120
Speaker 1: it's the story itself is so compelling. Uh, it's just

1543
01:20:47,200 --> 01:20:49,000
Speaker 1: a great reason I'll put that on my list. That

1544
01:20:49,080 --> 01:20:53,240
Speaker 1: sounds fascinating. Um So since you joined the finance industry,

1545
01:20:53,760 --> 01:20:56,439
Speaker 1: what what are some of the most significant changes that

1546
01:20:56,560 --> 01:21:00,280
Speaker 1: you've you've witnessed. Well, we talked about the floors disappear ring,

1547
01:21:00,720 --> 01:21:04,479
Speaker 1: you know, tremendousity, the computers, I mean, the whole why

1548
01:21:04,600 --> 01:21:07,120
Speaker 1: I started out in the day or we we you know,

1549
01:21:07,479 --> 01:21:10,519
Speaker 1: most people, we didn't have quotepaciet you know, on desk.

1550
01:21:10,600 --> 01:21:13,360
Speaker 1: We had these giant wall boards where the click and

1551
01:21:13,439 --> 01:21:16,320
Speaker 1: that was technology, the board wall boards which you know,

1552
01:21:16,400 --> 01:21:19,120
Speaker 1: clicked every time the price changed. Technology has been a

1553
01:21:19,160 --> 01:21:22,519
Speaker 1: tremendous change, and that's that's brought into uh into existence

1554
01:21:22,520 --> 01:21:25,400
Speaker 1: a whole bunch of uh the approaches that would have

1555
01:21:25,439 --> 01:21:28,160
Speaker 1: been impossible because of the calculations of all the just

1556
01:21:28,280 --> 01:21:30,680
Speaker 1: two intends to do any other way. So you have

1557
01:21:30,800 --> 01:21:34,160
Speaker 1: a change the nature of trading in that sense. Um,

1558
01:21:35,200 --> 01:21:37,320
Speaker 1: I guess a lot more strategies. I mean, it used

1559
01:21:37,360 --> 01:21:39,360
Speaker 1: to be much simpler and you got you got a

1560
01:21:39,600 --> 01:21:42,280
Speaker 1: fifty eight different head fund strategies now all sorts of

1561
01:21:42,400 --> 01:21:45,320
Speaker 1: arcane stuff. So those are some of that changes. But

1562
01:21:45,600 --> 01:21:48,160
Speaker 1: human nature doesn't change. And that's where the similarity of

1563
01:21:48,240 --> 01:21:53,200
Speaker 1: markets remains so given the technology changes in the past,

1564
01:21:53,439 --> 01:21:55,040
Speaker 1: what what do you think might be some of the

1565
01:21:55,160 --> 01:21:58,240
Speaker 1: next major shifts we see going forward? See, I'm not

1566
01:21:58,320 --> 01:22:02,880
Speaker 1: a predictor. I don't know. You know that's the right answer, don't.

1567
01:22:02,920 --> 01:22:05,519
Speaker 1: I always like that answer. If nobody if you don't know,

1568
01:22:05,600 --> 01:22:08,439
Speaker 1: you're better off saying that then then guessing. And so

1569
01:22:08,600 --> 01:22:10,720
Speaker 1: few people in this industry of willingness. I never I

1570
01:22:10,840 --> 01:22:12,320
Speaker 1: never answer a question. You know, I don't think I

1571
01:22:12,360 --> 01:22:14,040
Speaker 1: know the answer to right now. But by the way,

1572
01:22:14,320 --> 01:22:17,200
Speaker 1: I've done enough TV in my career that when someone

1573
01:22:17,280 --> 01:22:19,360
Speaker 1: asked you a question and you say I don't know,

1574
01:22:19,760 --> 01:22:22,280
Speaker 1: it throws them off. They have no idea what I've

1575
01:22:22,320 --> 01:22:24,960
Speaker 1: done that? So where's the down gonna be? Right right?

1576
01:22:25,439 --> 01:22:26,920
Speaker 1: I don't know. They look at you like you have

1577
01:22:27,000 --> 01:22:30,720
Speaker 1: two heads. Come on, give me a number seven I've

1578
01:22:30,760 --> 01:22:32,960
Speaker 1: done in three I remember doing inenter you in Australia

1579
01:22:32,960 --> 01:22:34,639
Speaker 1: and I said, look, you know, I can talk about

1580
01:22:34,640 --> 01:22:36,080
Speaker 1: training and I can talk about this. I don't but

1581
01:22:36,240 --> 01:22:38,080
Speaker 1: that because I don't ask me. I'm not. You don't

1582
01:22:38,080 --> 01:22:41,840
Speaker 1: ask me, I'm not and I'm not fo First question,

1583
01:22:41,920 --> 01:22:43,760
Speaker 1: what do you think the Australian stock Market's gonna do

1584
01:22:43,880 --> 01:22:47,240
Speaker 1: you know, I have no idea and it's basically what

1585
01:22:47,360 --> 01:22:50,720
Speaker 1: I answered. So, um, so let's get to our our

1586
01:22:50,840 --> 01:22:55,840
Speaker 1: two are too, uh A two favorite questions that we

1587
01:22:55,920 --> 01:22:59,920
Speaker 1: ask all of our guests. So a millennial or Reese

1588
01:23:00,080 --> 01:23:02,200
Speaker 1: graduate comes to you and says, I'm thinking of getting

1589
01:23:02,200 --> 01:23:05,400
Speaker 1: into finance as a career. What sort of advice would

1590
01:23:05,439 --> 01:23:10,080
Speaker 1: you give them? Oh that's a tough one. Uh you're

1591
01:23:10,080 --> 01:23:13,280
Speaker 1: talking about trading, You're talking just finances, anything and anything,

1592
01:23:13,400 --> 01:23:17,120
Speaker 1: and uh, well, uh, first make sure it's what you

1593
01:23:17,200 --> 01:23:19,240
Speaker 1: really want to do. I mean, it's not you're not

1594
01:23:19,360 --> 01:23:26,000
Speaker 1: just looking to do for the money. Um, you know.

1595
01:23:26,080 --> 01:23:28,280
Speaker 1: I guess in terms of finding a job, probably the

1596
01:23:28,280 --> 01:23:30,360
Speaker 1: only effective way to do it these days is networking.

1597
01:23:31,720 --> 01:23:37,280
Speaker 1: Umbo career itself. The treer has to be geared to

1598
01:23:37,400 --> 01:23:41,040
Speaker 1: something that well, you want to go with your strength. So, uh,

1599
01:23:41,720 --> 01:23:43,280
Speaker 1: if you can write, you want to try to find

1600
01:23:43,280 --> 01:23:46,480
Speaker 1: an angle it and fanthasized writing. If you can do analytics,

1601
01:23:46,560 --> 01:23:48,760
Speaker 1: he didn't do that. If you good in computers, you know,

1602
01:23:49,160 --> 01:23:51,360
Speaker 1: so take advantage of your strength and try to break

1603
01:23:51,400 --> 01:23:54,720
Speaker 1: into the career on your strong point. Basically, focus on

1604
01:23:54,840 --> 01:23:58,200
Speaker 1: your strong point and and our last question, um, what

1605
01:23:58,400 --> 01:24:00,960
Speaker 1: is it that you know about investing today you wish

1606
01:24:01,000 --> 01:24:04,280
Speaker 1: you knew thirty plus years ago when you started. Well.

1607
01:24:04,680 --> 01:24:08,080
Speaker 1: Uh that one of the themes of Marco Wizzards is

1608
01:24:08,240 --> 01:24:11,040
Speaker 1: that the risk of management is more important than than

1609
01:24:11,160 --> 01:24:15,160
Speaker 1: trading strategy. Uh. Oh you know what. Uh And this

1610
01:24:15,320 --> 01:24:18,559
Speaker 1: is what I've made mistake I've made made made more recently,

1611
01:24:18,600 --> 01:24:20,200
Speaker 1: and I wish I learned much quicker. And even if

1612
01:24:20,200 --> 01:24:22,240
Speaker 1: I learned it, I kind of repeated it. Hopefully I'll

1613
01:24:22,280 --> 01:24:26,680
Speaker 1: never repeat it again. But um, and maybe my my

1614
01:24:26,760 --> 01:24:30,719
Speaker 1: biggest flaw as a trader is be careful of getting

1615
01:24:30,760 --> 01:24:34,720
Speaker 1: too complacent when you're doing very well. Uh so all

1616
01:24:34,920 --> 01:24:37,639
Speaker 1: my you know, for for years and years, every time

1617
01:24:37,680 --> 01:24:41,519
Speaker 1: I've had any significant draw downs, that's always been after

1618
01:24:41,640 --> 01:24:44,439
Speaker 1: I've done extremely well. Yeah, you know that I've witnessed

1619
01:24:44,520 --> 01:24:47,200
Speaker 1: that and experienced it. So I'm I'm actually I'm actually

1620
01:24:47,280 --> 01:24:49,840
Speaker 1: superb at not at coming in for a small steak

1621
01:24:50,360 --> 01:24:52,960
Speaker 1: and even just controlling the lost tiny amount or not

1622
01:24:53,080 --> 01:24:55,679
Speaker 1: losing anything and just getting ahead and never being behind.

1623
01:24:55,760 --> 01:24:58,920
Speaker 1: I'm really really good at that. Um. But I'm really

1624
01:24:59,400 --> 01:25:02,599
Speaker 1: been terror ball about once I get ahead, not a lot,

1625
01:25:02,680 --> 01:25:06,400
Speaker 1: you know, than than giving back a chunk, which I would,

1626
01:25:06,840 --> 01:25:09,920
Speaker 1: But because I do things or take more risk, or

1627
01:25:10,280 --> 01:25:12,720
Speaker 1: do things differently than I would have done when I

1628
01:25:12,800 --> 01:25:14,720
Speaker 1: was being so super cautious. So when i'm when I

1629
01:25:14,760 --> 01:25:16,639
Speaker 1: thought out in the beginning, I'm every time I got

1630
01:25:16,720 --> 01:25:18,320
Speaker 1: and I don't trade all the time, so it depends

1631
01:25:18,320 --> 01:25:20,200
Speaker 1: on how busy i'm. But every time I saw trading,

1632
01:25:20,240 --> 01:25:22,439
Speaker 1: I started very small and very cautious, and that's when

1633
01:25:22,479 --> 01:25:24,439
Speaker 1: I'm best. So it's so funny you say that when

1634
01:25:24,479 --> 01:25:26,920
Speaker 1: I when I began as a trader, I ended up

1635
01:25:26,960 --> 01:25:29,800
Speaker 1: creating a number of rules, one of which was never

1636
01:25:29,960 --> 01:25:33,639
Speaker 1: let a profit turn into a loss. But then mid nineties,

1637
01:25:33,800 --> 01:25:35,800
Speaker 1: just like you talked, what happens when you have these

1638
01:25:35,880 --> 01:25:39,639
Speaker 1: giant winners. So that's where the rule came from, which

1639
01:25:39,760 --> 01:25:42,240
Speaker 1: is when you're up x percent and x has to

1640
01:25:42,320 --> 01:25:46,120
Speaker 1: be substantial. If you give back, that's it cut cut

1641
01:25:46,240 --> 01:25:49,680
Speaker 1: your losses, and I think, and there's something along there.

1642
01:25:49,760 --> 01:25:51,880
Speaker 1: So in other words, you you're up a hundred up,

1643
01:25:51,920 --> 01:25:54,240
Speaker 1: now I'm alling up seventy five. That's it. I'm out.

1644
01:25:54,320 --> 01:25:58,240
Speaker 1: Otherwise we've all seen those round trips too many times. Jack.

1645
01:25:58,360 --> 01:26:01,760
Speaker 1: This is absolutely fascinating. Thank you so much, Thank you

1646
01:26:01,840 --> 01:26:04,639
Speaker 1: so much for doing this, for those of you who

1647
01:26:04,880 --> 01:26:09,320
Speaker 1: are still with us almost two hours later. Um, we've

1648
01:26:09,360 --> 01:26:11,760
Speaker 1: been speaking with Jack Squager. He is the author of

1649
01:26:13,120 --> 01:26:15,439
Speaker 1: the Complete Guide to Futures Trading. Look for the new

1650
01:26:15,640 --> 01:26:20,040
Speaker 1: edition coming out in the fall. Market Wizards, Stock Market Wizards,

1651
01:26:20,439 --> 01:26:24,000
Speaker 1: New Market Wizards, and Hedge Fund Wizards, as well as

1652
01:26:24,520 --> 01:26:27,280
Speaker 1: the Little Book of Market Wizards. Diday I got I

1653
01:26:27,600 --> 01:26:30,240
Speaker 1: nailed them all. Uh, and be sure and check out

1654
01:26:30,560 --> 01:26:35,479
Speaker 1: Jack's new entrepreneurial venture UH fund seater dot com, where

1655
01:26:35,520 --> 01:26:38,960
Speaker 1: you could see how they are trying to find the

1656
01:26:39,120 --> 01:26:42,439
Speaker 1: new uh, the new emerging managers. Perhaps, if you're an

1657
01:26:42,439 --> 01:26:45,360
Speaker 1: active trader, you might want to register at fund seater

1658
01:26:45,439 --> 01:26:49,200
Speaker 1: and see if eventually they find you as as one

1659
01:26:49,240 --> 01:26:53,640
Speaker 1: of the outstanding performers. If you have enjoyed this conversation,

1660
01:26:54,280 --> 01:26:56,280
Speaker 1: be sure and look Up an Inch or Down an

1661
01:26:56,320 --> 01:26:58,479
Speaker 1: Inch on Apple iTunes and see any of the other

1662
01:26:59,120 --> 01:27:02,439
Speaker 1: nineties seven or so such chats that we've had. Check

1663
01:27:02,520 --> 01:27:05,800
Speaker 1: out my daily column on Bloomberg dot com, or you

1664
01:27:05,840 --> 01:27:08,519
Speaker 1: can follow me on Twitter. Are you on Twitter these days? Jack? Yeah?

1665
01:27:08,520 --> 01:27:12,960
Speaker 1: I am Jack Schweger Jack at Jack Schweger. Um, I

1666
01:27:13,040 --> 01:27:16,000
Speaker 1: would be remiss if I did not think Taylor Riggs

1667
01:27:16,120 --> 01:27:20,479
Speaker 1: my booker, Charlie Volmer our producer, and Reggie our recording engineer.

1668
01:27:21,240 --> 01:27:25,000
Speaker 1: You've been listening to Masters in Business on Bloomberg Radio,

1669
01:27:28,040 --> 01:27:31,320
Speaker 1: brought to you by B A s F. We create chemistry.