Jack Schwager is author of the Market Wizards series and just completed his second edition of A Complete Guide to the Futures Markets: Fundamental Analysis, Technical Analysis, Trading, Spreads, and Options. Jack has gone into great detail updating his 1984 original edition with over 600 pages of educational insights.
At the beginning of his trading career technical analysis never made much sense. However, as he worked in markets over the years, he came to see that those who used charts and technical analysis tended to make more money. He also saw that fundamental analysis almost goes against the idea of money management. He found that the same went for risk management: How does risk management work with a truly fundamental perspective? It doesn’t for most.
The basics of futures trading for most is fuzzy. Jack gives a short summation of the basics: 1. Futures are very liquid. 2. They trade for every type of instrument you could think of. 3. You can go short or long just as easy. 4. Futures are truly a zero sum game. 5. They are real markets and have real fundamentals pushing trends. 6. Basic trends do have some sort of rational behind them in futures markets and the skilled fundamental players will beat the unskilled players if they are good at assessing probabilities. Michael and Jack finish talking about trading as an art vs. science, whipsaws, failure to exploit major trends, drawdowns and the efficient market hypothesis.
Michael and Jack Schwager talk about his new venture Fund Seeder. Jack is the author of the Market Wizard series. His books have remained relevant over the past 25 years, and for many traders they are the best trading books on the shelves today. Michael and Jack talk about the structure of the Market Wizards books and how they evolved to interview style format. Michael thanks Jack for opening his mind on the direction he took the Trend Following Radio podcast.
Many of the traders Jack was able to interview, such as Bruce Kovner and Michael Marcus, never did another interview after “Market Wizards.” A lot of the secret to the book series success was the exclusivity of the interviews. Michael asks, “Of all the traders you have talked to, what trader impressed you the most?” Jack has a hard time, of course, narrowing it down to just one because there has been so many extraordinary people that he has interviewed. That being said, in terms of track records and sheer intellect, he would chose one. Jack was completely awed by his accomplishments and was surprised how great he was on a personal level.
There has been a strong trend over the years for money to go to bigger and bigger asset managers. It has become a safer thing to do, to put money with a larger manager. It isn’t performance driven, it is purely safety driven. Jack says that even if you have skill it is becoming exceedingly more difficult to gain new clients and get big. Jack’s new venture is focused on helping these start up traders. The firm helps connect investors as well as companies that may want to find new and upcoming traders. Jack elaborates on the match making process and how they present verified and unverified track records.
Michael Covel talks with writer and trader Jack Schwager, author of the Market Wizards series, in his third visit to the podcast. Today, Covel and Schwager discuss his newest book, The Little Book of Market Wizards. Schwager also has a new program out called Fund Seeder. Covel and Schwager discuss how Fund Seeder acts as a liaison for traders and investors; the difficulty of starting out as a new trader; how Fund Seeder is a global opportunity; Schwager’s last book, Hedge Fund Market Wizards; the timeless quality of the Market Wizards books; Jesse Livermore’s Reminiscences of a Stock Operator; how human nature is the only thing that will never change; looking for a “secret recipe” in the Market Wizards book; “The Upside of Down: Why Failing Well Is The Key To Success” by Megan McArdle; why failure is smart and an essential part of success; the importance of failure in the context of education; behavioral economics; Jack Horner and thinking outside of the box; the importance of loving what you do for a living; and the importance of travel. More information about Fund Seeder can be found at fundseeder.com. The Little Book of Market Wizards is also available now from all major retailers.
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