THE MARKET WIZARD THREAD

range · May 20, 2003

Enron, WorldCom, HealthSouth, and numerous other public companies were able to fool their auditors, fool their investors, and fool the public, all the time being in the public eye. As for the community of traders.....

Runningbear · May 20, 2003

The major effect the Market Wizards book had on me was showing me that there are people out their than can become great successes through trading.

This was more important than the how. Since reading those books I've believed there is a way to succeed in trading. The how is not so important, it comes with time. But if you don't believe in yourself you can never succeed.

So many of the market wizards started terrribly, and quite a few lost everything and came back to be really successful.

I learned from that I had to want it bad if I was going to succeed, and I had to do more than the other 98% to be outstanding.

Runningbear

Platypus · May 20, 2003

Quote from The Answer:

Baldwin retired from the Bond pit several years ago with about 30 million. He promptly sunk almost all of it in a publicly traded tech (forgot the name, it's history) and lost it all. Now he's back in the pit trying to scrape out a living. Very Sad.

I think that's my LEAST favorite Market Wizard story..
OUCH!!

PoundTheRock · May 20, 2003

Quote from The Answer:

Baldwin retired from the Bond pit several years ago with about 30 million. He promptly sunk almost all of it in a publicly traded tech (forgot the name, it's history) and lost it all. Now he's back in the pit trying to scrape out a living. Very Sad.

Imagine the mindset he must have had. At one point, if you're down 5 million in the stock, then the thought process might have been "I'm not going to let this stock destroy all of my hard work over the years." Down 10 million, same thing - there's no way one stock could do this to me. And then it's gone.

iceman1 · May 20, 2003

Quote from howellpar:

Mark Ritchie's book, "God in the Pits", had a profound impact on my own methods, my self-perception and my thoughts on spirituality. I found him through the "Wizards" series.

Beyond that, I would LOVE a 'Where (financially and geographically) are They Now' follow-up book!!

Good idea on starting this thread. . . .

I too liked Mark Ritchie's book..... recommend it

Ice

prox · May 20, 2003

Quote from candletrader:

In terms of the specifics of trading methodologies, I wholeheartedly agree... in any case, I am one of those who strongly believes that the best trading methodology that you can have is one that you have arrived at through a blend of experience, trial and error, and the occasional bits 'n bobs of others... simply taking another guys methodology in its original form and trading it can't work in my view (unless the methodology is 100% systems based and the trader has a 100% systems trading mindset coupled with 100% faith in the vendor's system), cos I believe methodology needs to be aligned with the psychology of a given trader... and only a given trader can create such an alignment (usually subconsciously, as opposed to explicitly)...

Having said all of this, what some of the Market Wizards have done for me is to provide the occasional inkling or hint of information that I have interpreted in my own way, developed in a proprietary manner and incorporated into my trading strategies as one of my bells 'n whistles...

And, of course, another thing that Schwager's books have done, at least for me, is to inspire... take the example of a former meat-packer like Tom Baldwin who started out with a small grubstake of $25k and made a million in his first year, never looked back and became the biggest pit trader around... never underestimate the power of inspiration, since inspiration takes motivation for success to new levels... lest we forget that trading is simply an exercise in psychology (with perhaps the exception of the 100% systems traders)...

You go girl !

The Answer · May 20, 2003

Quote from PoundTheRock:

Imagine the mindset he must have had. At one point, if you're down 5 million in the stock, then the thought process might have been "I'm not going to let this stock destroy all of my hard work over the years." Down 10 million, same thing - there's no way one stock could do this to me. And then it's gone.

He really had a personal connection with the company. Director ect. IMO big prob was that the stock traded about 50k a day and he had 2,000,000 shares at about $15.00 avg. No way out.

limitdown · May 20, 2003

Quote from lindq:

What I found was that it is easy to confuse brains with a bull market.

Now, if he was to follow up with interviews on what these "Wizards" have done since April 2000...(other than running web sites!)...well, that would be a heck of a lot more interesting.

Hero(s) All!

but you have to wonder what are their records with these two major events/environments

1) introduction of SSF's and how it challenges the Equity/Index Options markets

2) effect of the negative dismal economy and the war effect on trading

nitro · May 21, 2003

Quote from metooxx:

Yes, I believe him and he is not the only one.

Depends on what and how you trade ...

Absolutely.

nitro

candletrader · May 21, 2003

Quote from The Answer:

Baldwin retired from the Bond pit several years ago with about 30 million. He promptly sunk almost all of it in a publicly traded tech (forgot the name, it's history) and lost it all. Now he's back in the pit trying to scrape out a living. Very Sad.

This is the result of Baldwin attempting to enrich himself outside the sphere of his expertise (read, very short-term pit scalping)... if he indeed sunk most of his winnings into a now defunct tech stock (read, a medium to longer-term investment), this action was indicative of a separation of risk perceptions when dealing with $ outside of pit scalping... inside the pit, Baldwin was highly risk conscious (even if he bet the bank on occasions, without a precise understanding of position sizing, he would, nevertheless, never have let things get too far away from him when scalping; in a hyper-short term environment, I am of the view that position sizing deficiencies are not as fatal relative to such deficiencies in longer-term plays, since the discipline of fast executions in the pit occurs on average in the context of a 1:1 Risk:Reward ratio) but he seemed to lose his appreciation of the consequences of taking excess risk the moment he left the pit (I guess that he basically bet the bank, with no regards to position sizing... fatal when position trading)... if Baldwin is now back inside the pit, he will again be in his element of precision R:R= 1:1 scalping and I, for one, do not doubt his ability to thrive there and regain his lost wealth...