In this interview, we welcome Jack Schwager for a discussion on trading, writing and the current state of the markets. He studied economics from Brooklyn College and Brown University receiving an MA and BA in those fields in the early ’70s then moving into the Futures markets as a researcher which led to his first publication in 1984 “The Complete Guide to the Futures Market”.
Mr. Schwager is most famous for his writing and publishing of “The New Market Wizards” series with the first of the series coming out in 1989 where he interviews some of the greatest traders in the world. He’s written extensively regarding trading futures, hedge funds and conducted interviews of the great trader’s through his books. Matt talks to Jack about some of the characteristics of the markets in the ’80s when he first published the book versus today in 2019. Listen in to hear from one of the greats in our industry and a very knowledgeable trader and author.
It is great to hear Matt interview Jack and learn from his experience and wisdom. We know you guys are going to love this one.
Matt: Welcome back to the trading justice podcast. I got an absolutely special and amazing guest here today, uh, on the podcast. This kind of a bucket list item for me and, and he needs absolutely no introduction to our community. But Jack, I’m still gonna give you a little bit of a bio just so people can get to know you a little bit. Jack Schwager is one of the most recognized the industry experts in futures and hedge funds and an author of many, many, many books including the first book I ever read as a trader, the new market wizards and obviously the rest of the series of the new market wizards as well. He’s one of the founders of Fundseeder, a platform designed to find undiscovered trading talent worldwide and connect unknown successful traders with sources of investment capital. He was, he was a partner in the fortune group, which was the London based Hedge Fund Advisory Firm. And his experience in the market is 22 years of directors of futures and research and you know, decades now as a Wall Street expert. Jack Schwager, how are you doing? It’s such a pleasure to have it beyond the podcast.
Jack: Oh Great. Thanks.
Matt: Let’s get right into it here with the kind of conversation piece. And you know, Jack, as I was preparing for this interview, the one thing that really stood out to me before I even got into anything, and it’s something I can I kind of geek out on, is you’ve had such a long and successful journey as a, as a, as a writer, as an author, as a trader, as an, as a market participant. But before all of that, Jack, how’d you get interested in the markets from, from the very beginning
Jack: by accident. Oh, truly. When an accident, I was out of a graduate school degree in economics and it was just looking for an interesting job. Yeah. And I got an interview for a research position in a futures, a department of or present called rental securities as long been merchants who to non-existence. But, uh, that was the, I knew nothing about. In fact, I was so ignorant. I still, I still cringe at my answer. I got the job anyway. Well, I’ll tell you why, but my first interview for that job, uh, the fellow who was the research director was named Gurwitch Sysco. He wrote a column for Barents on things, a futures corner or something like that. Anyway, so he asked me, well, like guys, what do you know about commodities? And I didn’t know any them back at those days, forget about commodities or futures. I mean, they didn’t even teach, you know, equity. I mean, and you know, those and economics, you just, those areas that weren’t touched it. So I, I knew virtually nothing. I said, my answer like I say, my answer was so bad. I still remember I said, well, something like gold, you know, and well, I guess it’s technically correct, but, uh, I got the job anyway because, uh, luckily for me he was doing this column as I mentioned, that the way he got, he did the research or pick the read, the, the person who take the job is he got it down to four people of which I was one. And he asked us to, he gave each one an assignment than a different commodity. I got assigned copper and the assignment was to write an analytical piece on it that he would then use this first column as he does research on, at the base of the research. So I spent, and this is pre, this is way pre-internet. So, uh, at the time I
Matt: was in the early eighties. Jack,
Jack: what’s that?
Matt: Was this in the early eighties?
Jack: This was, no, this was literally 1971 so we’re way before any computer
Matt: Oh, we’re talking before even gold was introduced into the futures market
Jack: Well, gold here, that’s true. Gold came on. I mean, I don’t know if they had gold. Okay. You couldn’t really, I think it was 72 72 was pretty close. So this is real. Certainly before financial future, before stock, before currency futures. It was really, it was really traditionally commodities then. So I went to the Brooklyn Motors, uh, grand army class. I was the big library, Brooklyn. And I literally lived there for a week and I read everything I could on copper. And I wrote that I wrote this piece up in, you know, I remember about 10 or 15 years later finding it as one of my papers. I filed away and I read it. And considering for somebody I didn’t know anything, I was actually pretty good. So that got passed around to people, you know when they pass around the past around the four applicants. And that’s how I got my. I basically wrote my way into the job and I knew nothing about markets. I had no particular interest in markets. That’s how I learned today. That was it there. I said, Gee, this is. Kind of interesting, you know, and there’s no textbook for it. There’s no way particularly doing things. Uh, the research out there wasn’t very good. So I thought, well, this is, I could be, uh, I could be a medium-sized fish in a, you know, in a small pop or something. Like,
Matt: I like it. I like it. You know, you, you mentioned your first writing was that analytical piece on copper. You know, the first book you wrote was the 1984 futures book, correct?
Matt: It was called the complete guide to the futures market. And that was an analytical writing as well. Correct?
Jack: Totally, totally. And then I, that was redundant, a second edition, about a year or a year and a half ago.
Matt: And I, I do have a question on that because of it, you know, your, your new market series books, I mean what do you have five different editions of the new market?
Jack: Yeah, well actually there are four for the traditional, you know, format wants it. Then we just took the key ideas and it’s part of this little book series that John Wiley has. So we’ll look at market where therefore traditional quarterbacked ones.
Matt: Yeah. The question I have for you on that one, because when you’re looking at that analytical piece in the complete guide to futures and then you fast forward five years to your first edition of the new market wizard, we’re talking to completely different philosophical approaches to two writing. Correct? I mean,
Jack: oh totally not glad you noticed that.
Matt: What, well, what possessed you to a certain extent to kind of make the modification from the analytical approach to more of the mindset approach?
Jack: Well, it’s different. It’s different hats. It’s different skills. Um, I did the analytical book because sounds a bit, I don’t know how you say this without sounding egotistical, but I really did it because I didn’t think there was a good book out there, which is marketing analysis. And I thought I could do the best books. I was really sitting and I, and when I did that book, I wasn’t concerned about sales at all. I just want to write the book. And I did things which I knew would decrease sales. For example, I had a whole big section on odd statistics of regression analysis. I mean I know that sales will group are inversely correlated to a number of nations. So I knew that that was not going to, it was a tremendous amount of work. We’re talking pre-peak way pre PC, you know, so this is, you know, literally doing multiple aggressions by hand. So it was a tremendous amount of work to do. But I just wanted to do that spoke. That was my only, yeah, best analytical book. But the next book, I didn’t want to do that again. My next book, I want to reach a more broader audience cause I, I liked writing, just writing. Uh, I knew that analytical book served the purpose, but it wasn’t that. So the market was this idea I had. And eventually, I had an author want to be doing another analytical author, publisher. They wanted to be doing another analytical book at night. I’m actually a series of analytical books. I said, no thanks. I said, but here’s an idea I have. And uh, and so that’s, that was the catalyst to the wizards.
Matt: Well, you know, I, I, I truly do believe that and I like both styles, the analytical approach versus the mindset approach and whatnot. But you know, Jack, I’ve been an educator in the financial world for a decade now and you know what I have found because I have an analytical mindset, that’s kind of the way my mindset works. But what I’ve found is you can reach a greater percentage of your audience with more mindset because they understand it a little bit more than the analytical approach. I, I’m willing to bet if you gave, you know, the complete guide to the futures market to a very, very, very new trader, they would probably be a little overwhelmed with it in comparison to the new market wizards.
Jack: Yeah, I mean certainly and depends on the advocate. If it’s strictly for the skill of trading, the market was just, books would be more apropos. Uh, if it’s, if it’s for devising methodologies or if it’s technical in front of the, meant it, then the analytical book gives you more kind of tools. And so forth. And also one of the very important things I did when I wrote the analytical book, my guideline was, even though I had some stuff in there that was, you know, questions, my guideline was if you were, if you knew high school math, you could
do the doc. He didn’t need more than high school. Yeah. Nothing in that book. You know, rarely if I had anything like a, like something that prefers to approve for something like that, it was calculus oriented, I throw it in a footnote. So in the main textures lit really, even though it has statistics and all sorts of stuff, it’s all written from a free book. And in fact, one of the big problems I had, cause I w I thought I was to do one chapter on regression and I found every word I want, every next word I wanted to use. I couldn’t assume people understood what it meant. So going to write a chapter on preliminary chapter on understanding basic statistics, you know? And so then I had to do simple aggression before I go to multiple. And so I build a chapter by chapter. So you literally could get through that book and understand that if you’re willing to do the work and don’t enough people with that high school math
Matt: you know, that’s funny. And into the new market wizards, what gave you the idea to interview with these great traders? What, what, what started that process?
Jack: I knew some.
Matt: You were friends with some?
Jack: Yeah, well, I, I took my first job that I mentioned that the person vacating that position was Michael Marcus, who was challenging, you know, in market wizards. And so I do hear him. I also feel him, I actually, I thought I also had work, uh, he had hired me to be worker commodities corporation. So I also do some people commodities corporation, like who’s was governor. And uh, and so I just had a head start oh, under a couple of sort of like the best traders, you know, that that generation. And I also thought this will be a neat idea to go around the country and pick the minds of greater traders as a theme for a book. So I thought it’d be a, it was like a fun project to do. So I had the idea, but I’d move a falter by that point. I was a director of research, so I had a staff and you know, more than that, it’s who was more than the full-time job. So there really was no time. But, uh, I didn’t want to do the book and, but I had a publisher say, why don’t you do that? Since I wanted to do it already, I agreed to do it. And back in those days particularly, I was very, very good at focusing and so I could literally stay up doing all-nighter and get done. Uh, I mean I wouldn’t do that. I wouldn’t have to do it that way. Now back then I could.
Matt: When you, when you initially got the conception for the book, eventually after it was released and it became such a wide success and widely it was a hit, did you expect it to be that successful?
Jack: No, I didn’t. Yes and no. Okay. I didn’t know it was going to be successful, but my goal when I wrote it and I keep on, every time I get a question like that, I always forget to go back and see if I mentioned it. But, uh, it, when I know, I know I wrote the original market was this book. At that time I had read revenues as a sort of stock operator and at that time there were 65 years after the fact. I’m always struck by how even though this book was kind of archaic talking, you know, we’ll take your place in your bucket shops and that type of stuff that it’s the, there was still some, a lot of quotes today that really resonated with what I had seen about trading and it still was true 65 years later. So I did have, and that was kind of a classic, you know, obviously, I was reading 65 years after publication, so it was by definition a classic. And I did have the goal that I want to do a modern-day book that hopefully 65 years from when I wrote it, people would still be reading it. So that was my, that was my goal. Now I, that doesn’t mean I expected it to be to come true, but that’s what I was shooting.
Matt: Well, I would say you achieved that goal, Jack, because I mean if you ask any trader, there are top three books, top five books, however you want to rank ’em new market wizards and reminiscence are going to be riding up there
Jack: It’s 30 years later. That original book is still, you know, still,
Matt: oh, I have an original version. I still read it. It’s an amazing book
Jack: amazing. I think you know when it gets to 65 years, that’ll still be there.
Matt: I think so. I think it will as well. You know, in terms of the interviews that you conducted for the new market wizards, there were so many, I mean the 80s was just chock full of all of these great traders with different systems, different approaches to the marketplaces. How did you go about selecting the individuals that eventually became part of those interviews for the book?
Jack: So I was basically looking for, the spectacular story also takes up my, you know, like it was good morning. I’m Michael Marks, I mentioned. Yeah, they give him a, he goes to commodity sculpt, they give them a $30,000 account and it doesn’t, years later he started pay the million and that’s with that taking money out of it or Bruce Kovner when I interviewed him at the time, I think that’s something approaching 10 years of an 80% compounded return. And you can’t keep that up of course, but still just, you know, stupendous treatments. I was looking for the spectacular story. Uh, I was also, I mean in terms of achievement, but ultimately also needed people who, who would give a good material. So, um, I mean if it had a trader we did well, but you know, if you interviewed them just there’s just nothing, just no, he came out of it then it’s very difficult to, to turn that into a, an interview. So I also needed people who had interesting anecdotes and stories and would also be willing to say enough so you could pull lessons from it. I didn’t, some people actually was surprisingly open and how much they did say and some people were more close to the vest, but still set enough. So you could draw some lessons out of it. But I needed that.
Matt: I was thinking about that in terms of getting these great successful individuals to, to talk openly about their success, their systems. A lot of traders are so closed and so closed off and so close to the vest that they have a hard time opening up about their process, their philosophy, their take on the market, their trading systems and whatnot. Was it difficult to get a lot of them to be as open as they eventually became?
Jack: Yeah, well, I mean, I can think of interviews a but one that comes to mind immediately. This is it. This is Bill Lipschitz, the currency trader. Good, excellent. Uh, and now and have their sage, his own firm for decades now. Lipschitz, I remember going to his apartment and for a few hours interviewing him and I just wasn’t getting anything, you know, just, you know, you could tell, in other words, when I’m doing an interview, I, um, even then I could tell, now of course I could tell, but you can almost see it on the page, you know, if somebody says, oh, you know, what is good and what does nothing there, you kind of know where to unfortunately. And for the first few hours, I wasn’t getting anything. And then we, then we stopped for a, I’d go to Chinese food or something like that. Then the pretty cool quota circle, but then he starts talking, you know, it’s like, and so now I continue for multiple hours. After that, I went back a second time. Ultimately I got enough material, but it doesn’t, sometimes it takes quite a few hours before you get the first thing you can literally use. And so part of it is at the time you had to take more time. And the other part is everything is that helped me from the beginning. What I did is I told traders that, oh, I’ll let you see what I write before it’s published because I didn’t want that and I don’t, I didn’t do that because I’m a great guy. I don’t want to, I mean it’s fair. But I also wanted them to know that hey, that they don’t have this kind of mentally censoring themselves constantly because hey, I say this is going to be in a book and so forth. So one of them to know that they could intersect that, that if something was not right or they said something, they really did want that. I gave him my, I gave him my word that I would let them see it and approve it before it got published. And usually, there were virtually no changes ever. And, but once in a while, you know, somebody would say, you know, saying, well this is not quite right and we would find some way to, to make this sentence work or whatever. And there were a few, and there were a few instances where I ended up not being able to use the interview, which had nothing to do with what I wrote, but I had to do with all the circumstances in those cases I guess worked against, but it was worth it because I think it led people to be much more open than they would’ve been had I not made that the get guarantee. They literally had me sign the agreement saying that I worked, you know?
Matt: Yeah. You said, I mean, I just think that’s wise philosophy in the first place. I mean, especially as you start writing more books and more books and more books. There’s a trust with that transparency and so I think it’s very, very intelligent too to make sure, maybe not that they have, you know, the sign off on everything, but yeah, my heads up say, hey listen, this is in the book and if you’re not comfortable with something, because you went into a lot of personal stories in the book as well in terms of how they approach certain things, you know, in terms of all the people you interviewed for that book, I’m sure there were people who said no, right. That just did not want to do the interview. What was that one trader that got away from you that you just wanted to interview?
Jack: Well, the two, the two most prominent traders I could think of. In one case I spoke to directly, which was Jim Simons or the renaissance, who probably has as good a track record as ever in return risk terms as it is, everything a bile, it would’ve been, I wasn’t heartbroken with that actually. I asked him on two different, two different books. You know, the first time I got to go, the second time I went back and he at least thought about it for a week and then said, no, I wasn’t exactly heartbroken because I knew it’d be a very, very difficult to sort of like with the short, you know, who also extremely secretive. And that was also definitely, but he at least agreed. Uh, so Simon’s was one and the other one I never could actually get to speak to because I never got past his circle of people and that Short Soros. So if you ask me who’s, you know, the people who should have been in those books, that word, those are the two names that pop up most prominently.
Matt: You know, George Soros is one of those traders that, you know, people have different opinions of George Soros, but I’ve always felt like George Soros was one of the greatest traders of all time. Would you agree with that?
Jack: Yeah, I mean everything I know about it is, and uh, and like what removed from this from George Services, Stanley Drucker, Miller who I did interview and who did run-sources sponsored for a number of years. Wow. Well, so ours was east of your post-Pearland walk up and down
Matt: kind of opening up the whole markets right there.
Jack: Yeah. You’re trying to get capitalism going and everything else. It’s odd that he gets attacked now for being the leftist where he was really a complete market person.
Matt: he’s a capitalist. He’s a free-market guy.
Jack: I mean it’s a free-market guy. So terms he got really flipped around these days. Um, but in any case, uh, that’s when he was at source and rocky was running his funds but drunk Miller learn, you know, acknowledge a lot to that. He put, he learned from source and of course a great respect for, sorry. So bye drug and being such an amazing training talent himself. His, his feeling that shores was not something traumatic. He was already a very good trader by the time he joined. But somebody he could actually learn from and respected as a great talent. That itself is the highest of those, but you could get worse as this record, uh, of what he’s achieved. Um, and you know, an intellect as well. So,
Matt: you know, one of the things as I, as we work with a lot of new traders, Jack, and a lot of times when I meet a new trader that is just really off the just right off the boat, learning how to trade, doesn’t even know what a stock is. They focus so much on the technical and the analytical process of trading, Trans Pattern support, resistance indicators and so on and so forth. But one of the things in your book that really stands out to me, Jack, is the emotional discipline it takes to really be successful longterm. Can you speak to the concept of emotional discipline and how and why it’s so important?
Jack: Sure. Um, I think that does many miscon well, let’s back up. There are many misconceptions about markets. Uh, and when I say misconception, I mean the general audience and novice traders not talking about professionals. And there’s this, and I think it, I think Hollywood is largely to blame because if you made a movie about real trading, it’d be like an Andy Warhol with VP. Really Boring. The empire state building fade hours, right. You’d see us looking at the screen so it doesn’t make good TV or movies or whatever. So Hollywood, you know, try to use always as this testosterone-filled thing where people screaming and yelling and all this turmoil. And the amazing thing is that it couldn’t be further. It’s just exactly the opposite. Yeah. You know, real trading is like the most boring thing you could ever say. There’s a quote I used, I saw Alex, you know the world-famous free climber when he was on 60 minutes and being interviewed.
Jack: And so for those of you honestly don’t know how all the, what he does, I mean this is the guy who literally scaled three thousand foot checklist share cliffs without any ropes or any protection. That’s a crazy thing to do.
Matt: I could not do that, Jack
Jack: In fact, this movie is pretty amazing. Uh, it’s extraordinary. I mean that’s the same dude, but he has moves in there that are extremely, the film is, it’s leap, you know, and hope will catch on a rock with like a fingertip. And this is without any protection, 1500 feet up. So anyway, they, the Laramie I’ve got her last name Lehrer from 60 minutes. So she has them. Do you ever, do you ever get an adrenaline rush and he looks at her like shocked? Oh No. You know, like if an Annenberg, an adrenaline rush, something is drastically wrong, I’m falling.
Not Everything has to be slow and control. And that’s the say. You know, I said I stopped my, you know, I hit the pause button, I went and grabbed my bed, backed it up and I got the code. Exactly. Cause I said, I never heard a quote about trading. It wasn’t about trading, but I’d never heard a quote that was as appropriate about trading as his comment about free solo climbing. And, uh, and so I put that as kind of in a notebook and mark who uses, I think the first, the first quote I have is that, and so to your question about emotions, that’s what it is. You really don’t want a lot emotion. Good trading is all about getting emotion out of it. You don’t want the emotion. Almost invariably emotional will be negative. And the people that were successful or happen successful because they’ve been able to, to find a way of trading where they control, where the emotion is not part of it. And how they do that is because they’ve got really good control of the risks. And so without that, of course, there would be a lot
Matt: that’s so hard to overcome though. I mean, we’re so emotional about money and making money and not losing money that we get so caught up in the financial aspect of the market when what you really should be focusing on is just the technical side of it. What is the trend? What is the pattern? What is the probability? What is the return versus the risk? It can be a lifelong journey. Really kind of mastering the concept of mindset. What is, what is one recommendation or suggestion you could give our listeners to help them overcome the emulsion of money and the emulsion of trading?
Jack: Yeah. So the important thing does this come up in multiple interviews is no, no. What you can lose before you go into the train. Uh, be clear about that. Be clear about what you’re willing to lose, what you’re risking on the trade. And ideally, a use if you’re using stuff you use stops as, as a risk control man. Uh, measurement, uh, management tool. Then actually put in a stop at the time you put in, you know, time you put in the tray. So the decision’s already been made so you don’t have emotion because one thing that happens is the second you put on a trade, the one thing you automatically lose subjectivity. So if you could make your decision about, well, you’re getting in, that’s, that’s the easy part, but we’re getting out before you put the trade, then you can pretty much get emotion out of it because you’ve already decided, okay, I’m going to get into the trade here, I’m going to risk this amount. And if it gets that amount that I was wrong, I’m out. It’ll cost me x dollars. I know that ahead of time only to accept that I’m willing to, to risk that amount because I think the trade is getting made. Why dollars? So if you do that, then the emotion is you take the emotion out of it to a very large extent. I mean, you can always get out before that point, but at least you know what your worst case,
Matt: which one would accept the risk. Right.
Jack: And I think that’s an accepted risk. Yeah. So I think if you are rigorous about setting your risks before you went to trades, that can really be the most effective way of removing emotion
Matt: out of everyone that you’ve interviewed for anything, bug new market wizards, whatever everything you’ve done in your career. Is there any trader that has influenced your own philosophy to the market more than others?
Jack: Yeah, I mean, I mean there’s been a number, uh, like the drill we just talked about. Uh, so I think maybe the first person in any, if you were to say it was Bruce Kovner cause that was in the first spoken, maybe it wasn’t the only one to say, but he said it most clearly. And uh, I’d say it’s probably if I only had 10 words of advice to give traders that would be as good as anything where’s I could pick in as what we talked about just a moment ago, which is, no, well you’re going to get out before you get hit. And so for me, I think that was probably the most single, most important concept. Uh, overall, the idea that risk management is more important. There have been through, but then there are, there are one-off things like a, so example Marty Schwartz a that is so kind of, I think what you said, uh, if you ever were really worried about a market, no.
Well, you’re going to get out in the market. If you’re really worried about the market, let’s say on a weekend and it opens up Monday, you’re worried about you’re gonna get killed and, and you’re not losing money is a principal is, was don’t get out. Yeah. Uh, I mean, the reason that works, by the way, is because you’re really worried. This good reason, you know, his drastic has come out counter to your position. The market is your short term Walker’s just broken out wildly to new highs. There’s a good reason for you to be scared, you know, and if it wants, despite all of that, it doesn’t go against you more often than not. Your position is probably right. And so like I think when I talk about influence, I can remember, I don’t know, six, seven years ago, but I remember one time I was building a short position in a stock index as it was getting towards the highs and then basically just on a tactical line and I was maybe about 85% short and uh, and uh, unemployment at what came out. I don’t remember the exactly pulled, whatever. All I know is it couldn’t have been more negative for the market at the time. The market behaves differently to unemployment. Ports will get good and bad depending on the time, but not particular timeframe. That unemployment reward was such that it was an, and it was one of those reports, you know, usually, they’ll say, well, this number was bad, but this number, you know, it was not so bad. This report was just nothing, nothing.
Matt: The board averaging unemployment,
Jack: only negative for the market. I’m mostly positioned. Shore market starts selling off. It’s a Friday. I figured, Hey, you know, perfect trade. You know what I’m saying? This is the trade rooms scaling into a shore. I’m going and I don’t do that. I don’t sell into strength per se. I’ll do that only if I can’t because it’s coming up to her resistance. I have several points, which is just the resistance zone and I’m willing to sell it in that zone or risk beyond that, the section. So it’s not like I’m applying to excel. You get to new highs. So it seemed like, hey, perfect. You know, so right into the zone and failed. Right. It’s kind of down and then it stops and starts going up and it goes up and it goes up. And the finishes of the day, I don’t remember, finish all your finished clothes, Don change and that, I remember my son coming over, one of my sons came over. Yeah. And at that time he was working for, uh, he was, he was working for as a system trader in a prop property prop trading company. And I’m telling them, you know, Zack point, you know, it doesn’t look good. Yeah. I’ll show you how to talk about the train anyway. Sunday night comes and yeah, I’m expecting it to open higher and it opens lower. Yeah, the stock index is open lower. And I think shorts, I honestly think if shorts, I mean otherwise I would have been out. Right. And I stayed and then it goes down to that. And then I just, I had just two peas, the gauze, I didn’t want it to have to gods. I got out of the middle of it just to just, just so, you know, but I kept getting by, but I kept most of the position and I strictly kept it because the first thing that came into my mind was that, so things like that, you know, come up all the time.
Matt: Well, and speaking about that, when on when I’m reading the book and I’m sure our listeners when they’re reading the book, there’s certain common traits that stand out amongst these successful traders. What would you say are the two to three most successful traits that are commonality with these individuals?
Jack: Okay. Uh, the, I, I probably have 50 in my books, but the, most of the ones that come immediately to mind, what is risk management discipline is second and not in order here. And Flexibility to change your, your opinion. Um, he does. One trader said, you know, it’s going higher, it’s going higher, it’s going higher, it’s going to lower. That’s the mindset of a tree. You know, you have to be able to switch on a dime if, if the facts dictate that,
Matt: you know, as I was given an interview, and I can’t remember who I was talking to Jack, but it was probably about three, four months ago and we were talking about politics and they were, I enjoy getting into the political discussions and you know, I was talking about how politicians are flip-floppers and they flip flop on anything. And I said, you guys might not understand this, but politicians, they’re not the biggest flip. Floppers traders are the biggest flip-floppers we’ll go from bolster parish in a second. Right. You gotta be flexible in your approach to the markets and you can’t, yeah, I think Jesse Livermore said it best in reminiscence when he said you could have your opinions all day long. And I’m obviously paraphrasing, but markets are never wrong. Your opinion certainly can be, you know, read the tale of the tape. And that’s what the most important thing is in terms of these, these traders that you’ve interviewed back in the eighties in comparison to, to now our traders today better than they were 30 years ago.
Jack: Well, some of the traders of the same tree. I’m actually working on a new market with this book. So yeah,
Matt: I wanted to get your take on that one.
Jack: Are the traders, you know, is, is, is someone who was trading back, you know, in the 70s. So he’s still trading. Uh, so some cases they’re the same. And when I did hedge fund market wizards, one of the people I interviewed was that Thorpe who started trading back in the 60s. So, uh, some of the traders that I enter your later books really have been around for a long time. Well then in the new book I’m working on, I’ve only done a few of the interviews, but like two of them are something completely different than I would have accounted ever before. And so like one example, and maybe about the details here, but I’ve always thought the trader is a fund that is either fundamentally-oriented or technically oriented or some combination of the two I never even conceived of. Can’t be anything else. Right. It’s gotta be something. But yet one of the interviews I’ve done for this book, um, the trader, and I call it the, I, I know what the title is and stuff, that chapter, it’s neither because he doesn’t use fundamentals and he doesn’t use technical. And as amazing as that sounds, yeah, not going to give it away. But that’s true statement. So what are he and what I’ll tell you what he’s doing could not have been done back in the 80s so part of it is a, he, his technique could only been possible in more recent times.
Matt: Oh, and I want to talk about that Jack, because you know, obviously over the last 30 years, since you wrote the new market wizards in 1989, you know, the technology boom, the technological and information era has just exploded. And you know, I first started trading back in Oh seven in Oh eight Jack and yeah. Or Oh five oh six and, and really kind of started getting, you know, decent and good back in oh seven oh eight and oh nine. But you know, it’s, it’s even in the last 10 years, the markets have evolved so much with algorithms and high-frequency trading. In terms of the market from 89 to 2019, what are the most fundamental differences the market has, has changed in that course of that 30 years?
Jack: Well, I think you’ve put your finger on it. This is the computerization of trading. So we come my early days in the markets, um, you know, you’re talking pre, pre where you had computers and mainframes basically, and they weren’t very powerful and uh, wait before personal computers, right? So you come from that type of world. In a type of world where somebody that gets a code is talking about using it on an IBM three 60 mainframe, which feels the size of a room and following, you know, what you could do on the, on the most, the least powerful PC you could probably buy in the market. Um, you don’t let alone the supercomputing computer power. It’s a, it’s just extraordinary. I mean it’s, it’s, it’s like a different world. So that has been a big transition. So a lot of methodologies that would’ve been impossible, uh, years ago now become doable because of that, that computer power. And that also once you have that computer power, then you have certain mathematics that can be applied, which could practically be applied before, like artificial intelligence, certain types of artificial intelligence and big data, which require a lot of computing power. You could have theoretically could maybe come up with you. Theoretically, you could have come up with the mathematics of that 50, 60 years ago, what it would have been no way to execute it. So, uh, so those are the big, those are changes. So that means that you now have money being made in the markets in a different way that could have been made before and now you have certain techniques that were very effective. He had the 70s 80s such as trend-following, which are, which, and then why? Because member in the seventies this was pre computer days pretty much for everybody. So the few people who were writing these programs are doing simple trend following., we’re able to do very well. Nice.
Matt: Makes me think of Richard Nana’s, the turtle trader story when you had the turtles.
Jack: Yeah, they were, they were predominantly successful in the seventies and eighties not the turtles, but yeah. And traders. But people like Dennis and uh, and then it really changed and it changed because, because now too many lot of people were able to do the same thing. So certain approaches have lost a lot of the graphic ESY, like trend. There were still trends, but the markets will do the damnedest to knock you out and it shouldn’t, you know, they just, they just didn’t,
Matt: that’s forced traders to really focus on shorter time frames from a trading perspective because of the, you know, the speed of the market
Jack: probably shorter and longer. Either one. Yeah. Anything but in between. Right. Yeah, because if kind got enough, uh, a Navcom Shit, if you, if you could really, you know, you have to, you have to be right about the long term but, and the losses are much larger if you’re wrong. Uh, but the long term trend, and now I haven’t done it recently. I do remember the days where I did look at the, you know, through the analysis. It would even back in the, even back in the 80s, long term always did better than short term. It just returned risk-wise it always did better. I suspect it’s probably still true. Um, but all that, all of those approaches now we’re probably less, our Are are less effective. It could go through extended period, extended drawdowns, larger than you would have got previously with the same approach. So you have, so go back to your prior question. That’s you have new, new methodologies in also old methodologies, Ya know, certain things like completely gone like the pits, right? I, when I started out it was all pit trading in futures. Now it’s all electronic trading. So sorry. So things have changed and now, but I still think that there are certain inherent things about the market that haven’t changed because ultimately even if a lot of us speak computer-driven though the program is done, don’t, maybe at some point the programs we’ll write to maybe computers, we’ll write to programs, but now basically humans are writing the programs and so human emotion still comes in even if it’s kind of one removed.
Matt: And I wanted to talk about that jacket because when, when you, and it’s at the very beginning of new market wizards when you’re talking about the things that you personally have learned from this, markets are not random. Markets are not random because it’s based on human behavior. There’s no holy grills. And so on and so forth that that point number two markets are not random because it’s based on human behavior. Has that changed? I know humans still program the algorithms but you know, algorithms now speak to other algorithms and AI kind of takes over. Do you see that changing in the future where the market is removed from a human behavior perspective?
Jack: I used to answer that as probably not for a very long time, but one thing that gives me a bit of a pause, I mean I don’t think we’re there yet, but one thing that gives me a bit, Paul, a bit of pause is the rapidity of computer power, how it’s progressing and not, not that I shouldn’t say computer power, I should say. Also artificial intelligence
Matt: the last decades been absolutely insane with the evolution of technology.
Jack: You know, so if you take something like take something like chess and blue, deep blue, the idea of computer, I believe, I’m not an expert here, but I believe that was still is just pure power procure, just the processing power. Uh, cause I did just as a, you know, enormous amount of, uh, of, of moves, but, and I guess with some subprogram at the limit that the selection somewhat that processing power could take you there, but then you go to something go like go, which a, which I don’t know even how to play, but I do know that it’s many, many, many, many multitudes. Uh, more, more combinations said. Yeah, it’s way, way. It’s too even today’s prostituting power, I don’t think you’d go there, but for artificial intelligence, they, it recently, the last couple of years have actually come up with a program that can beat the best scope player. So that’s kind of sobering. Uh,
Matt: now does it concern you?
Jack: The one thing that’s still really worked in favor of humans having a role in the markets is unlike chess or I don’t like whether specific rules, rules never change, uh, to use a jib Rogers as to, or the markets that are like does 10,000, that puzzle with 10,000 pieces and they’re always taking out some pieces and frog and new pieces. There’s always variables. So the thing is the, the way the markets behave always changing. So it may make it a problem that is even so far we are the complexity of, of subjects. Even as difficult as go to solve for artificial damages that may be, it still leaves a niche there for, for humans. But today, I mean, I’m so fine to traders who are basically, you know, we really beat in the market with numbers that are strong enough that, I mean anything could be walked but probably not. You know, I mean it’s just, uh, there’s a certain consistency there. Well, if enough people, so, uh, and it’s a well-defined approach. Each one has one and they’re doing it and it’s working. So I think it’s still possible. We haven’t gotten, gotten to the point where, where humans can’t one anymore. And if we ever do get to that point, I guess the irony of that is that the efficient market hypothesis we’ll find out maybe. Right.
Matt: Okay. I was just going to say that it finally is the efficient market theory. He might’ve just been a century early. That’s funny right there, Jack. You know, in terms of the algorithms and you know, AI and everything. In your opinion, does it make the markets more consistent from a short term trend trading perspective than it was even two, three decades ago?
Jack: I don’t know the answer to that. Uh, I don’t know. Um, I don’t know how other than, uh, other than introducing new ways of making money, I really, it’s kind of difficult to say and seeing the trends pick up much shop here. But other than that, I don’t really know how it’s changed the way the market behaves,
Matt: you know. In terms in terms of where we’re talking about AI and algorithms and whatnot, what are some of those biggest obstacles that you see that the market is faced with over the course of the next few years?
Jack: What do you say to Markets? What do you mean by like, like the, the stock market?
Matt: What, what concerns you, I guess is my question regarding the financial world.
Jack: Yeah. One answer for the market’s change. I think, well, right now we’re seeing very, very long steady prize in the markets, you know, stock market, these, right. Um, I don’t think we, we’ve abolished the bubbles and bursts, you know, panics a thing. So, uh, I think that is still, you still have that situation where you can get markets having these very, very long sustained moves beyond true valuation and then at some point to have collapses. Uh, so, uh, I think that still would, I still expect panics. I don’t think 2008 was, uh, was the last time we have that. I think I am now going to, I, you know, that was Kinda my, uh, what I was trying to ask me obstacles, this CEO, the two stems, it’s an eight because what happens is the longer these trends go, the more complacent people pick up and, uh, and the more complacent they become, the more danger there is. Uh, there is a, of having a market collapse at some point. It’s sort of like a, like an earthquake, you know, there’s no words 200 years, so people could come on places, you know, but, uh, it doesn’t mean in fact alarm it goes to the longer you go without an earthquake at a fault line, the more dangerous it is because there’s more type of power. So, um, but people don’t look at it a way they, they look at what’s the best in the five, the past five years, past 10 years, and, and the answer is always going to be in that market that’s been most overdone in a direction. So I’m not saying that the market has thought about here or whatever. I have no idea, but I’m thinking at some point, I mean the markets in evaluation valuation anyway, but at some point you do reach a point where, and you have other problems that are being totally ignored.
Uh, which I just, because we’ll be leaving a debt deficits and I do have trouble believing. I mean, I don’t think the, the modern model, uh, the modern economic theory that, that, that’s deficits don’t matter is right. I just can’t get my heart of hearts. I just can’t believe that’s true. I don’t 100% on that 100% cause we kind of print our own currency. And right now we’re where the safe haven. But you never know what’s going to change the, the, you know, the market mentality. And uh, I wanna does every, it’s like the floodgates are open. So I think there are real dangers there. And, uh, so that will come. What concerns me most? I think what concerns me most probably is, is this complete this thing for the deficits. And I think, I think oddly enough, uh, the right is more guilty than the left. Uh, although they’re both guilty.
Matt: I blame them both.
Jack: Yeah. Because, uh, because you know, at least the left only you say, you know, you, you, you know, you’ve got to increase deficits. Uh, Keynesian and Kane’s, not electric, but canes never said increase deficits when there’s a new expansion going on. The recessions. I mean, Keynes would turn over in his grave at the way, you know, but of course people, the people pushing deficits, now we’re not Keynesian or anti Keynesian, but I, Ron ugly, they, they, they’re like Keynesian on, on, you know, something like that. They’re on, you know, it’s like just complete abandoned. So I think the, the economic policies have become so reckless and sounding like there’s any hope because the Democrats are on there saying, God, this is just a, we can’t do this. They’re, they’re saying, no, we shouldn’t, we shouldn’t push the deficit because of the cut taxes. We should, we should do deficits to do infrastructure. Well, at least they get something of value, but still you have to deal with the problem. You can’t just completely ignore, uh, that the size of the deficit, especially in expansion of time. What do you do when there’s a recession?
Matt: Well, yeah, and I want to get your take on this, Jack, because I read an interview you did a few years ago. I can’t remember if it was 2014, 13 or 2012 but you basically, it was a very similar question. You know, what concerns you and you talked about the deficit and in the last six years, Jack, I mean, President Obama, a Republican Senate president Trump or republican controlled congress, our deficits and our debt has been absolutely blown out of any economic, you know, conservative type philosophy. And it doesn’t seem like there’s a political answer to this. If we continue to expand the deficit and the debt as we have over the last 10 years, what, where do we go from an economy or are we talking Japanese stagnation at that point?
Jack: Uh, well, Japan is their church pans and up. It’s, I mean, I don’t know how champion Japan resolves itself either. I mean, there, there’s regular currency events. This isn’t as much worse than ours even, um, what I’m afraid of, I mean, I don’t know how it ends, but I kind of can’t think of a scenario that I described is one what scares me. Uh, I just can’t think of a scenario. At least, you know, previously at least that did debt, the deficit was coming down. It was, we are still adding to the debt, but at least the, the amount we were adding every year was going down. Now we’ve gone into a situation where the amount rating every year is going up and it’s, and we’re in, we’re at full employment. So you know, it’s, I think it’s much worse than it was.
Matt: It sounds like you’re a, you’re a deficit hawk, a monetary hoc, you know, and those are the things that that concerned me, concerned me as well. In the last six months there’s been a lot of political pressure being put on the central bank jack to start lowering interest rates to even spark even more of this insanity. But we really do start lowering interest rates in, in, in the back half of 2019 how do you think the market would respond to that?
Jack: Okay, well, I mean the market will go up. I mean the market will go up because the market is looking, is looking for the immediate near term. And for the immediate near term it’ll make, we have, we used to have inflation going into, you know, inflation of goods and stuff like that. Now we have inflation going into assets. The last, last, uh, the last financial meltdown we had, it was going into housing to a large extent then and all housing related. Now, you know, it’s going into financial assets. So what’s changed is that type of assets. And so, I mean in place you’d always go somewhere, you know, it goes with the goods and services or it goes into a housing or it goes into, so now we’re going into financial assets and now if you make it even more favorable for fun, the total financial assets by, by making it unfavorable as to have any other, you know, to put it in bonds or whatever, then you just increase prices even more So I think the stock market would go up. Of course the bond market, you know, we’ll react, uh, you know, will react to the low, you know, go up and uh, but you have both a dangerous both in dangerous territory, one being very overvalued. And in the case of bonds, you’re kind of dingy on everybody continuing to buy the story. And if they don’t, then you run into a vicious cycle where once interest rate starts going up, the deficit gets worse. And, and the more you know, and the more you try to counter the deficit, the more interest you, you. So there were some horrible scenarios out there and it seems like everybody’s ignoring it because a political expediency
Matt: Jack, I just feel it’s completely insane after 10 years of price appreciation to Paris to even talk about, you know, stimulating the marketplace. It’s, it’s been stimulated like on the market,
Jack: it’s political expediency and economic ignorance or, well, if I’m being kind to second advocate ignorance, I’m not sure. It’s like either it’s economic ignorance or political expediency. It’s one or the other.
Matt: It could be political and competence as well. I mean, it’s just, it’s absolutely
Jack: I mean, it’s not political, you know, politically, they’re doing the right thing. If people react to incentives. Unfortunately, the way our system is about he is our political system is congressman and senators, especially Congress are on every two years who are incentivized to win the next election. Yeah. So concerned and they should be, but they’re not concerned about 30 years out, 20 years out, 10 years out about the election cycle, concerned about the next election. And so, and, and, you know, for presidents the same thing, you know, they concerned about the next election. So, uh, I think that’s the problem. That problem is the short term focus. Now it does make political sense. If you, you know, uh, as much as I disagree with Trump, I just about everything, especially economics. Um, he bug for political Expedia, he’s doing it right. He’s, he’s got, he’s doing the right thing to maximize his incentives to get reelected, to get reelected. If he can push interest rates down, jawbone the Fed into following his, his instructions, then that will push the market higher. We’ll probably even, you know, make the economy stronger. Short term, short term, we’re retreading some additional short term sugar highs for a lot of problems later on. So he’s doing the right thing politically to get reelected
Matt: Well, , I said this just the other week Jack, that the only way he doesn’t yeah. Get reelected. In my opinion, if the economy starts faltering in the stock market comes down and every policy from a monitoring of fiscal perspective we’re seeing coming out of Congress or the White House is to push that type of a type of an agenda and you know, as somebody who is it, you know, I’m not a Trump guy in any capacity, I’m kind of like you and that I don’t agree with this approach economically. And that’s kind of one of the number one voting things that I personally take into account when I’m voting for the president., but at the end of the day, we can’t control that. We have to trade the price action will leave the political, the political situations out there, but that can be much harder and harder. It’s easier to say that than it is to do it. Correct. How do you, how do you go about this with your wealth of experience, Jack? How do you go about removing all of the noise and just focusing on what you need to do as a trader?
Jack: Well, as a trader, you’ve got to, uh, actually one of my, you’ve really got to ignore. You got to know what you want. In fact, I forget who said it, but somebody says, so. I think one of the quotes somewhere, one of the books was, uh, you have to do what you know the market will do and not what you hope it will do. You know, along that line, I’m paraphrasing here. Um, and it’s the same. Maybe you’re talking, now we’re going back to training my training perspective. You have to ignore what you want or what you think is good. Oh, or anything else. You just have to focus on what you think. Basically, whatever your approach is, the market’s going to do. And I can think, this is still pains me to think about this, but one of the things I s I realized at the time like did absolutely nothing was our, the last election where, you know, it was a complete surprise that Trump won. Initially the market starts selling off like it, like you, people don’t realize that cause it was on the overnight or selling off sharply, like expect. Then all of a sudden it starts rounding sharply. I kind of knew that’s the classic, that’s the classic example of where the market is, you know, you, you see yourself in the room or by the news or whatever and and so that, that price action and it was in the fact that I was acting so completely opposite to expectations was I, I kind of knew it was a great signal, but I just couldn’t be myself. I was so disappointed with the outcome. But I let that
Matt: I missed out on the entire run in November, Jack 2016 like literally and I was, I was trading the futures market that night during the election and I was so surprised by the outcome of the election that and I had this opinion and and you know, we should leave our opinions out of it.
Jack: Well yeah, that’s what I’m saying. So yeah,
Matt: I, I had this opinion that if Trump was elected, he represents a little bit of a shock to the market. He represents a little one certainty to the market that I didn’t know how the market would respond. Right. And so I missed out on that 10% price movement that happened from November 9th through, through mid December. And like I said, you just kind of work on removing that emotion from the equation and that certainly can be a lifelong journey here. Jack has got a few more questions with you if you don’t mind. A couple of them very quickly just goes to kind of your own personal process here. You’re starting a new book to the next series of the new market wizards? Correct. When, when is that out?
Jack: So I’ve only done three of the interviews so far writing those up before I do more interviews. I’m also, you know, I’ve got this gift fund seeder, uh, uh, fantastic. Definitely want to talk to you about financing as well. I’ve got that. So I’m, you know, nothing is full time here, but as I figure I will probably get the book done hopefully quarter one of next year.
Matt: Mm. And, and when you’re going into that, and I’m sure that there’s a tremendous amount of time and effort and, and research and work that goes into that. Does your trading, how do you go about adjusting your trading, your investing? Do you make any modifications when you’re in like research and writing mode?
Jack: Yeah, I don’t drink, I stopped trading in a number of months ago. Uh, cause I just didn’t want to, I just don’t want the distraction. Also, I don’t trade all the time. I just trade. I tried, but I want to, when I’m in the mood or who have ty extra time or feel like it that I just always go and I’ve never considered myself a trader. It’s just just another hobby or whatever that do sometimes and don’t do other times. But I do know enough that if I’m busy, I’ve got too many things going on. I don’t want the, uh, I don’t want the distraction. And also heard that you’re also not good for trading at night. Now I always think of something that has said, which I found incredulous. Uh, when I, when he first said it and I just, he can be almost, my attitude was you can’t be serious. And he said, everybody gets what they want out of the markets. And I said, you mean they lose at? He said, everybody gets what they want out of markets. And I’ve since discovered that that space for myself, that’s basically true because when I don’t want to be trading, you know, oh, I have to be things about, of things going on. I’ve other reasons I don’t want to be trading. I’ll make money and then I’ll blow it on or doing something stupid. You know? It’s like I’ve just learned that if, if I know I shouldn’t be trading, I’m better off not trading.
Matt: So let’s handle it. Jack one of the things you talk about in your books is the, the importance of being humble as a trader. Right? And you are just extremely humble as a trader because I’ve heard you are a much better trader than you give yourself credit.
Jack: No, I’m not. I’m not, I, mean the, all I can say is I’d be a horrible traitor if I hadn’t experienced it. That the experience of the books, at least I’m that profitable, loose credit is I’ll get me. But I’m always, I always tell people I’m not a trader. I’m more of a, you know, more an analyst, a writer and editor. Actually, AHCA wizard books are more about editing than writing or they’re both. But editing is very critical. I, they’re more about editing an interview. Let me put it down. Uh, so I’ve got other skills I think I have, but trading is not use what my skills are. I guarantee you that trading would not be on that list.
Matt: Okay. I got, I got four quick rapid fire questions for you. Okay. Number one, outside of your own books, what is your favorite trading book?
Jack: Well, you’re not trading but quiet mentioned reminiscences is a good book. Um, I think, uh, I think a good both just first basic philosophy and understanding is not entirely full by random is now all of his books are worthwhile. It’s, I don’t think that’s his own personal favorite, but that’s the one I think, you know, for me that’s the one, I think the message of that book I think is, is important for people to understand. Um, and I should say preference. Say I don’t read really trading books per se.
Matt: So it’s kind of a lot of the best trading books out. There are more mindset driven, kind of like new market wizards, you know, reminiscence, uh, those types of great books in other questions for you very quickly. New Traders, new investors they want to get into the market. What’s one piece of advice you would give a new trader that’s fresh off the boat?
Jack: Okay. So maybe the most important advice is what you do start trading trade with less than you want to because odds are, as a new trader, you’re going to lose. You might as well get the experience at a cheaper tuition cost. I would say figure out what your methodology is before you actually start trading. And I know paper trading is not the same as real. It isn’t, but still, I think it’s a good idea for people to develop figuring out what their methodology is, trying to pay betrayal and get some feel for it before they committed any real money. When they committed real money, have it be a smaller sub. One thing I’ve done a, even though I don’t sit, I’m not a very good trader, but one thing I’ve done that smart in my trading career when I do trade is I always, whenever I go back to trading, I started with a small amount of money and, or I shouldn’t say this, I, have a mental stop point and how much I’m willing to risk and it can be very, really very small amount. So if I start trading and I lose that and now I walk away, that’s it. So then tells me that anytime I start trading, it’s never going to cost me very much. I may give my biggest sins have been giving away profits. I’ve made Dave, at least for for a long, long time. They have a date losing money from what I saw. Cause I’ve really, one thing I do correctly in my mind is that I do control the risk very tightly for by state. I think for the beginners too, it’s a good idea. Just limit a small amount. If you lose it, that means you weren’t, something was wrong with your approach. It’s not there. Or your approach could be fine, but it’s just not the right timing. Take a break. We think things come back when you’re ready. The risk, another small step. So that’s, that’s another piece of advice I would give, which for me is personally work well. It means that I’ve, I know I can ever lose much in the markets because I started out losing. I’ve lost a dilemma
Matt: Now I love it Jack too to ask questions very quickly. In new market wizards in the eight things you list that you learned to excel in trading, it takes talent and hard work. Okay. You talked about you can go buy a $300 system, a $3,000 system, but if you don’t understand the question, you’re not going to be successful. When you, when you, when you said that, what is the question that you’re, that you were referencing?
Jack: Uh, I mean knowing what your, what your approach is basically. Uh, I had the exact quote, IDP had the exact quote. I might be able to tell you what I was thinking of. Yeah,
Matt: I was paraphrasing.
Jack: Maybe. Maybe when you rephrase it is, is uh, yeah, I think it’s more a matter of, I think it comes more about the guys that people who are trying to get somebody else to, to show them how to kind of show them the training, to hand them a training approach on it in a recipe book.
They haven’t. When I say I think that that’s, that’s the context I’ve used this, those people have not yet learned to ask the right question because it’s never, almost never, I shouldn’t say never because nothing is never, I’ve discovered exceptions to every rule. That’s what existed in certain people I interviewed, but almost almost without exception, the people who are successful, I may have had some people they learn things from, they may have some things from arbitrators, they may have had other traders give them a start and then they developed their own methodologies or whatever. But almost to a trader, they develop their own approach. So I think the context of that have a question, uh, comment. I think I use it in the context of people who are asking for you to give them the answer on a silver tray that would have an a trying to discover the answer.
Matt: And that doesn’t exist obviously
Jack: because it’s different for every person. It’s just not, you know, you could, you could show a very successful trade show in other, I want to be a trader. They approach it. They’ll still lose money because they won’t have the same confidence. They won’t have the same feel for it. So you have the, you have to know that it’s not a matter of getting somebody to give you the answer. It’s a matter of you try to discover the answer with your all and it’s every person,
Matt: you know, the way I interpreted the first time I read your book, Jack, was kind of what you talked about, you know, you, you asking the relevant questions going through the process. And as I was preparing for this interview, I was just thinking about it, my own personal journey and you know, the evolution that I had and the question really kind of, it reminded me a little bit of that great book by Simon Sinek. Start with why is that? Well why do you want to trade in the first place, right?What is, what is your why? And it can’t be about money. It shouldn’t be about I want to get rich and I want to make money. There’s gotta be something else beyond that. Jack, the last question I have for you is regarding to fund seeker. You’re one of the co founders of a fundseeder i love the concept Jack. But I want you to explain what the concept is and why you started
Jack: fun sooner. Yeah, so it wasn’t my original idea that your credit or credit where it’s due. Uh, my, the CEO and, and the other co-founder Emanuel Belardi is the one who pitched the idea to me. And at the time I was working acting as a consultant to a fun put for the company he was with. And we were at a conference and we were talking and he pitched this idea and the idea was to create a central website which would, which would find undiscovered trading talent world worldwide and connected with investors looking for new training. The idea was that we’ve evolved into a financial world where the largest hedge funds managed and ungodly out of the total assets. And then you’re ever in the second year of funds which pick up the rest of the crops. And you can have talented people out there if they’re in the wrong country. If they didn’t go to Princeton or whatever, how good they are. They will, no matter how many emails I send out, they’ll never get the outlook that they’ll never have a chance to manage. Just as you, you can have the help in iron stone of trading somewhere in uh, in eastern Europe, maybe at the litigate discovered because they just want access to the capital. So the idea was to create aside where people could have their account, link it so the carrots be empty, data coming from the broker. So like they get a verified track record. Now they get all the analytics on that. No, that’s the enticement is they get the analytics to graphics on their account. They can either do technical analysis, a Oh their equity curve, stuff like that. So that’s, that’s the enticement, to like it also the possibility of getting discovered for those who want that.
So you create that one side, but then you find people that would not, you would not have ever the Scott, but any other way. And they would never have had a chance to, to succeed in any other way, sort of democratizing the asset management. So we’ve, we’ve worked on the detective technology side and the trader platform, and this is the first year we’re now beginning to focus on the oddly investment sides. So for plan to do a fruit, the fruit separate company for regulatory reasons called funds in our investments to we have an index that’s been going in real time for almost four years, which has done well, which is based on, you know, a hindsight free selection of traders at the database and so that that can ultimately be an investable product. That’s our plan. We’re also looking at, uh, seeding, finding investors who want to seed. It’s promising traders and sense haven’t you? So that’s the basic idea is to act as a connecting link for traders trying to break into the asset batch world who have the edge and skill but not the connections or anything else. And on the other hand, bringing it to investors or investors that are looking for a product that taps into a different source of, of a management skill.
Matt: You know,when I, when I first read about your project, fun, it’s fun Cedar, when I first read about it, the first thing I thought about, amazing concept, amazing idea. I’ve traveled the World Jack as an educator, teaching people how to invest in trade and the basic concepts of technical and fundamental and behavioral analysis and so on and so forth. And I’m telling you right now, there is some great traders out there that would never be found, never, never identified, never get that opportunity if it wasn’t for people like yourself.
Jack: Yeah. And if you notice, uh, not only directed the fund seeder, but also I’m going to use that as a tool to find some to trade herself. That’s awesome. This book. So if you know some undiscovered great trading town, I’m interested,
Matt: we’ll do Jack, we’ll do Jack. Jack, we’re going to have to bring you back on the podcast when a, when you released your new market wizards book next year. So Jack, this has been so awesome. Thank you so much for coming on the trading justice podcast. Our listeners are going to absolutely love this interview and what we will be more than happy to bring you on again to talk about that next book when you release the Jack. Thank you so much. Thank you. All right. We’ll be right back with more with more of the Trading Justice Podcast after this.
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