Lessons From A Trading Great: Stanley Druckenmiller

Stanley Druckenmiller

The “greatest money making machine in history”, a man with “Jim Roger’s analytical ability, George Soros’ trading ability, and the stomach of a riverboat gambler” is how fund manager Scott Bessent describes Stanley Druckenmiller. That’s high praise, but if you look at Druckenmiller’s track record, you’ll find it’s well deserved.

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Lessons From a Trading Great: Michael Marcus

Michael Marcus

Michael Marcus turned $30,000 into $80 million over a 20 year period — not too shabby.

He was profiled in Schwager’s original classic Market Wizards, giving one of the more impressive interviews in a book filled with many.

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The Philosopher on Playing the Player

The Philosopher On Playing The Player

Market sentiment is a fuzzy concept.

In its most basic sense, it’s the aggregate beliefs and moods of actors that comprise the total market.

It’s tough to measure, gauge and test. And so, it’s often discarded completely or superfluously used to confirm one’s own biases.

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Lessons from a Trading Great: Bruce Kovner

Bruce Kovner

Bruce Kovner retired in 2011 from Caxton Associates, the hedge fund he founded and ran for 28 years.

Over that time the fund returned an average of 21 percent a year since its inception. In comparison, the SPX averaged just 11%. Kovner had only one losing year (in 94’). Before Caxton, while trading at the famous Commodities Corp, he averaged close to 90% over 10 years. Impressive numbers by any measure.

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Variant Perception and How the Market Is Always Wrong

Variant Perception

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“The generally accepted view is that markets are always right — that is, market prices tend to discount future developments accurately even when it is unclear what those developments are. I start with the opposite view. I believe the market prices are always wrong in the sense that they present a biased view of the future.” ~ George Soros

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Understanding George Soros’ Theory of Reflexivity in Markets

My conceptual framework enabled me both to anticipate the crisis and to deal with it when it finally struck. It has also enabled me to explain and predict events better than most others. This has changed my own evaluation and that of many others. My philosophy is no longer a personal matter; it deserves to be taken seriously as a possible contribution to our understanding of reality. ~ George Soros (via FT)

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Ruthless Reductionism and Occam’s Razor

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In the classroom we were constantly praised and awarded for complexity. A desire for higher marks meant creating more pages of writing, more conclusions, more assumptions, more models, more complexity, more and more. Yet when we exit the sterile classroom and apply that approach to the real world in search of profits, it often translates into less success, not more. Complex approaches usually fizzle out, whereas simple ones, combined with basic common sense and perseverance, tend to bring home the bacon.

The market teaches this lesson the hard way. It will take the complex, highly involved PhD thesis and spit it right back into your face in the form of a giant loss or even worse, a completely blown out trading account. The market doesn’t care about fancy complexity and therefore tends to reward the practical street hustler over the high level academic.

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