Market Wizards

[damir00]

Quote from Cutten:

Anyone who calls that luck might want to take a refresher course in logic and statistical inference.

*shrug*. there are fundamental philosophical differences at play here, i don't think it furthers the discussion to attack people's knowledge. one could just as easily suggest certain people need refresher courses in epistomology - but that gets us nowhere.

the counter argument is that given the huge number of traders out there, the number of long term successful ones isn't incompatible with sheer luck. same applies to buffet, frankly.

 

[drprotrader]

Darkhorse...good posts.....

Other reasons for success...and then later failure = flat movement...or lack of more successes....

Examples:

The introduction of a new product..ie..cellular phones..in the beginning you know its a good idea...but after everyone has one...so what...

The beginning of the ecns....once all trades are routed through them..the growth card is gone....

For Buffett...he buys the basics when they are cheap and holds them for a long time...very slow to start but long term very effective and highly reliable...Who doesn't drink coke..use razorblades....

Some hedge funds strategies have high returns when $10 million is employed...but the returns fall dramatically when the size approaches $100 million...

 

[easyguru]

Buffets success is as much about other peoples money and leverage due to his insurance companies ownership.. In fact if you look at those who have made it to the billionaire list on Forbes, besides their trading skill it is their ability to attract other peoples money that made them large fortune.
So it is not only trading skills but your salesmanship also matters. Some wizards are good at later while some are not.

 

[Virtuoso]

Quote from damir00:

not referring to "stationary" price action, referring to "stationarity", a statistical measure which is an entirely different beast.

And over my head

 

[OneHipCat]

Quote from fkeane:

He was a protege of Soros. He went on to found and manage his own global macro hedge fund and had terrific performance for a few years. He blew up spectacularly on a wrong way bet on the Thai Baht in 1997.

He now manages a much more modest amount of money and has written a couple of books since his implosion, called "The Education of a Speculator" and "The Art of Speculation". I found the latter to be a good read.

He also writes interesting pieces on his web site:

http://www.dailyspeculations.com

Despite the criticisms posted here (and they are valid IMHO) he does write some very good stuff if you can make it through all the "off topic" spiel he tortures you with.

His website is a mess, not easy to navigate at all. He mentioned somewhere in there though that he had to mortgage his house and sell his antique silver trophys to start anew trading. Any idea on how much he was worth before his funds went belly-up?

 

[inflector]

Rearden Metal wrote:

His little green reptile proteges make their money from selling their 'amazing money making system' instead of actually trading.

and also

http://www.turtletrader.com/

http://www.turtletrading.com/


Do not give these people money.

While I agree with your second statement. The first one and your comments about Richard Dennis are wrong.

Dennis, was, is and always will be a great trader. He's not been successfull as a money manager, but as anyone who has done both trading for themselves and trading for others professionally will attest, trading and managing money are not the same and require different skillsets.

Dennis' personal trading style always tolerated huge drawdowns, especially drawdowns in open equity. Investors in managed futures do not. I don't think the transition from one frame of mind to the other has been as easy for him as he thought it would be.

I was one of the "little green reptiles" you disparage. I traded the largest account for them and during the 4 plus year program starting with a $2 million account made about $31.5 million.

The other site was started by a guy who was accepted into the Turtle program and then let go after less than a year because he violated the confidentiality agreement and was not profitable when most of the other Turtles were.

I started the original turtles site, with a few other turtles, to give the rules away because I was tired of people ripping off others and selling them a "course" based on misleading marketing and unrealistic expectations.

I also happen to know Richard Driehaus since he lives here in St. Thomas, and he is an excellent trader who remains successful post-publication.

Several of the other Turtles continue to be successful, although many of them have had trouble changing their strategies to reduce volatility which is required for managed futures. Jerry Parker who runs Chesapeake is also a very solid trader who is the main exception, he continues to be profitable long after the book was written.

Bill Eckhardt, who was the quiet and extremely intelligent parnter with Richard Dennis in the Turtle experiment has an excellent track-record. I believe it very likely this record will continue as long as he trades. You can see by the correlation of his returns with other Turtles that he has been innovating and developing new strategies over the years.

Regards,

Curtis Faith

 

[ShoeshineBoy]

Quote from inflector:

Rearden Metal wrote:



and also



While I agree with your second statement. The first one and your comments about Richard Dennis are wrong.

...............

Bill Eckhardt, who was the quiet and extremely intelligent parnter with Richard Dennis in the Turtle experiment has an excellent track-record. I believe it very likely this record will continue as long as he trades. You can see by the correlation of his returns with other Turtles that he has been innovating and developing new strategies over the years.

Regards,

Curtis Faith

Thx for the review!

 

[TigerO]

Quote from inflector:


Dennis, was, is and always will be a great trader. He's not been successful as a money manager, but as anyone who has done both trading for themselves and trading for others professionally will attest, trading and managing money are not the same and require different skillsets.

Dennis' personal trading style always tolerated huge drawdowns, especially drawdowns in open equity. Investors in managed futures do not.

Regards,

Curtis Faith

Hear, hear !

That makes very much sense.

The thing I always wondered about is that when Dennis started with USD 400 as a Mid Am exchange member the only thing he can really have been doing with so little money, yet with bills needing to be payed regularly, is scalping the markets, and he must have been very successful at that, too.

At some point liquidity must have precluded continuing with scalping, if you want to compound your stake to the USD 200 million he eventually managed to achieve by the '80s.

However, there is still a huge difference between discretionary scalping or discretionary short term trading on the one hand, and the medium to long term mechanical trend following that he eventually moved on to.

Obviously nothing wrong with the latter if you don't mind large drawdowns and long flat periods, but that's not where he came from originally and what had already made him rich.

My question is, do you know why he didn't just evolve what made him successful in the first place, discretionary scalping, into discretionary short term trading like for example Paul Tudor Jones, someone who came from a highly similar background of having learned their stuff on an exchange floor, but why instead Dennis did a 180 degree turn ?

Like I said, I'm not saying that one is better than the other, just curious.

Regards

 

[murray t turtle]

Quote from ShoeshineBoy: on NUTSEAL link
Thx! I looked at the top link and it's fantastic.

J Henry and Quadriga are impressive.

I'll check out the bottom link tomorrow - it's late. Thx again...

================================
Another good read which includes the years 1991-1998 & more John Henry,
Bruce Kovner,
Jerry Parker,
Paul tudor Jones again Darkhorse;

The New Investment Superstars by Lois Peltz

=================================

What you call luck
I call a small sample.-John Henry/Boston Globe interview

 

[inflector]

TigerO you bring up a good point.

My question is, do you know why he didn't just evolve what made him successful in the first place, discretionary scalping, into discretionary short term trading like for example Paul Tudor Jones, someone who came from the same background of having learned their stuff on an exchange floor, but why instead Dennis did a 180 degree turn ?

I think this is more an artifact of the time he made the transition in the late 70s, and the then-current transaction costs and available information, rather than something that naturally flowed from his start as a scalper at the Mid-Am.

The execution costs associated with trading off-floor made long-term position trading much more viable back then. Even when I was trading as a Turtle, we only had quote machines with basic bid, ask, open, high, low, and last. There was limited charting and no ability to see your prices and charts at the same time. The commission charges also tended to favor longer-term systems.

Execution costs have dropped significantly and the ability to monitor short-term systems on multiple markets has improved greatly in the last 25 years.

The good scalpers also tended to react more based on the faces and personalities, and their reactions in the pit rather than the price movements. I think a good scalper would not have thought that one could build good short-term systems using scalping techniques since that vital psychological information was not present in the quotes.

Even when he was trading at the Midam, Rich did position trading, he'd sometimes scalp into positions and then hold them for days or weeks. Many of the traders of the time did this.

- Curtis