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“The biggest challenge I’ve faced with my trading is the lack of a clearly defined system and structure…”

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Dear Michael,

Thanks for the note and I am testing you so hope to hear back. Given that I’m recording these thoughts more for me than for you (no offense) I’ll be as open and candid as possible. Apologies if it is a bit of stream of consciousness. To answer your question, the biggest challenge I’ve faced with my trading is the lack of a clearly defined system and structure. I’ve been investing my own money for the past 25 years (and worked with my mom in learning how to invest family money after my dad died 37 years ago) and have read, watched, met and followed hundreds of books, classes, videos, conferences and investing legends. During that time I’ve been in and out of markets, learned at the feet of a few titans, have built one highly successful business, have tried to build a couple of businesses which never really gained traction, have had some great public market investment successes, have suffered a number of small public market investment losses, have had a few private market investment successes, have had a few private market investment losses, and have lost money in two deals which were straight-up scams. If I were to attribute one constant theme to my history it would be a number of outsized gains combined with a number of smaller losses. This has culminated in a history which provides me with a good life and additional capital but which I couldn’t define as a tremendous success. I’ve reached a point in my life of surrender, not quitting by any means but instead the willingness to surrender the stubborn biases which have been holding me back and follow a path which leads to success. Maybe this is a moment in time where the student is ready and the teacher appears. Maybe it is just me reading a book (Trend Following) which has sat on my shelves for a long time and picking up some interesting knowledge. The former would be great but the later is also cool. What really really really appeals to me is the concept that I can make a lot of money while eschewing a need to predict future outcomes when making an investment decision. If it is possible to implement a system and structure whereby I can follow existing data and make profitable trades then sign me up 1,000%. Hopefully Trend Following lives up to the hype and holds the key to building such a system.

Here are a few things I like:

I like your candor (just listened to Episode 955 of your podcast),

I love the Ned Davis quote you use, “the idea is to make money, not to be right”

I like the idea of a stable and well defined system and structure,

I love the idea that emotional stability and discipline are the top criteria for success with such a system,

I like the idea of a system which generates success but may be a bit boring–boredom is totally under-rated and there are plenty of sources of excitement in life without the need to find it from my profession,

I like that Barry Ritholtz wrote the intro to your book

[…]

Well Michael, that’s about it. God willing I’m on a path to finally finding the Rosetta Stone which has eluded me for decades or maybe I’ll just read what is turning out to be a very good book and find a few nuggets of wisdom. Either way, thank you.

Best wishes,

J.

Keep plugging. Don’t quit. Why do I do what I do? It’s my calling + I’m a capitalist.

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