Hedge Fund Market Wizards: How Winning Traders Win Hardcover – 22 May 2012
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Praise for HEDGE FUND MARKET WIZARDS
Traders regularly use passages and chapters from Schwager's books as a reference for their own methods and to guide their own trading. His work is an inseparable part of the consciousness and language of trading itself. Schwager's books are essential reading for anyone who trades, wants to trade, or wants to pick a trader.--From the Foreword by Ed Seykota
Jack Schwager is the era's premier chronicler of financial talent. When historians look back at this mad time and wonder who the key players were, they will turn to Schwager's books.
--Robert R. Prechter, Jr., Editor, The Elliott Wave Theorist
Hedge funds have evolved into a market force, and the timing of Hedge Fund Market Wizards is as valuable as the lessons it contains. Jack's book excels in knowledge and insight, rather than specific rules that are short-lived. Among the gems are mistakes are the catalyst for improvement, stable returns are suspicious, and you can't succeed without embracing the risk inherent to your trading style. As you would expect, the book is masterful.
--Perry J. Kaufman, Managing Director, Kaufman Analytics, Ltd., and author of New Trading Systems and Methods
Great traders are almost always fascinating human beings. Jack Schwager is the perfect interviewer, equally adept at eliciting life stories and professional secrets. A must-read.
--William Poundstone, author of Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
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Most helpful customer reviews on Amazon.com
Like the previous Market Wizards books, and indeed just like in the market, the trading methods or philosophy applied by the wizards could not be more different from one another. Some even directly contradict one another, with surprisingly good results for each of them. This, of course, remains the underlying message of the Market Wizards books: bottom line, we need to figure out who we are and what kind of strategies could work with our temperament and world view.
One interesting remark made by Jack Schwager when people were asking him to introduce them to one of the wizards, to work under their apprenticeship and learn about their methods/system that bring success, in which he answers that it will be useless because the main point is to develop our own trading system that cater to our character. Just like Colm O’shea said “If I try to teach you what I do, you will fail because you are not me. If you hang around me, you will observe what I do, and you may pick up some good habits. But there are a lot of things you will want to do differently.”
Nevertheless, as different as these Wizards can be, they all share some similar traits that become the foundation of their trading approach.
First and foremost, they're all very dilligent about risk management, minimizing risk is almost the most sacred part of each one of these traders. They also trade only the size they're comfortable with. To them the market is always right, Steve Clark commented that the market is not about facts but people's opinion and positions that reflects their opinions, and they aren't afraid to cut losses when they're wrong. In a similar tone, Scott Ramsey said that there is one principle that you cannot violate: know what you can lose.
Meanwhile, as one wizards believe that price is not actually important (instead the size of your position is more crucial, to determine whether or not you can get out quickly), Edward Thorp complement this view by saying don’t bet more than you are comfortable with (and just take your time until you’re ready). Moreover, Jamie Mai highlighted that finding answers is much easier when you know in advance what the questions are, and another wizard gives the simplest wisdom of all when he said do what you do best, and so less of what you do badly.
Furthermore, as different as they may be, almost all of them point out the fact that profit is nice but it wont teach us anything, and one of the most important parts of trading is to make as much mistakes as we can, learn from them, and create our own system to avoid those mistakes.
And the interviews in this book provide us with exactly that, the raw and honest stories about their hopes, fears, and doubts, and their struggle and journey from nothing to become one of the best in the world. It is also, perhaps more importantly, about the long road on how they come to acquire/develop the skills or tools or principles that they eventually use to make them very successful (like Ray Dalio’s principles, which he then expanded into a very good book). And it’s all very human, and the lessons are also very applicable in any walks of life other than trading.
Just like the format in Dale Carnegie’s books, by the end of each chapter Jack Schwager provides a concluding paragraph to sum up the interviews, which is very helpful. But the real gem of the book is definitely the conclusion chapter, where everything are summarized so neatly, in which Schwager lists the ultimate 40 Market Wizards lessons, which, of course, I won’t spoil in this review.
This would definitely be the 1st book I recommend on anyone asking about trading/investing. An absolutely useful real-life manual for the battle on the financial market ground.
This particular edition is good because it is rather new compared to the other versions. Some of the legends profiled here include Ray Dalio, Jamie Mae, Joel Greenblatt, and the incredible Ed Thorp.
I would recommend this, as well as all the other books that are part of the collection, to any person who is considering starting a career as a trader. There are not many books out there that provide the wide range of strategies presented here. The trader wannabe should pick up these books, read through the interviews, and then select the strategy that best suits his/her personality. Then, use that knowledge to look for other books that explore that strategy in detail. Once they have done all that, they should come back and re read the wizards to extract the real gems.
No matter what strategy you end up following, you should always keep these books close as an invaluable reference.
Of course, there are some flaws. This book is populated with american and british (at least) traders. Mr Schwager does not extend his research further than that and on one occasion even says that he only searches through indications of friends (there is one exception in the book). It is sad, as I personally know of South American and European (and no doubt there are others too) traders who deserved to be here and could add to the book. Even so, this is a interesting group with plenty of insights. Although, as someone who has been solely a full time futures trader for the past 15 years, I don't think he draws necessarily the correct inferences or conclusions on some interviews, but to his great credit, the information is there for you to make your own (in a few instances I would like to have asked other questions, but in general he was okay).
Even when he apparently strays off course, like when he interviews his son's boss (really???)... well, that's what I thought... but after reading the interview I thought it was indeed a good choice and very interesting interview, although Mr. Schwager get asking some wrong questions and insists on how he could "improve" his results, without taking into account what the trader had been saying between the lines all the time, which is his knowledge of his style, his emotional capacity, etc...
Anyway, this book's qualities OUTSHINE these small flaws by a wide margin. And, Mr Schwager has done something few people have... he has written 2 exceptional books about the markets. For authors writing a book like the first market wizards is hard, because following it up is very difficult. But he has done it with this one. If you, like some reviewers, are looking for specific techniques and trading tips, you are already searching for the wrong things my friend, and it won't make a difference which book you buy. But if you are interested in reading about some great traders according to their own words, reading about different perspectives, approaches and a lot of information to digest and reflect on, this is DEFINITELY A BUY!
Let me say it for the record, this is an exceptional book and Mr Schwager is to be commended for the work he has done the "trading community".