But Dennis did not select his students for strength of character and drive to win, nor did he train them on the fine art of mental toughness. On that level playing field where he covered the overhead, everyone appeared mentally tough. However, it turned out that only Turtles like Jerry Parker, Paul Rabar, and a few others, and later, Salem Abraham, actually shared the same drive and entrepreneurial spirit that Dennis had.
Think about the annual drafts of professional sports teams. They demonstrate this same inability to screen candidates for mental toughness. For example, every year college stars get drafted with much fanfare. Every year at least one significant stud, one “can’t miss” prospect, fails. Look how many thousands of great college players never make it to the NFL, NBA, or Major League Baseball. Something separates pretenders from contenders. Innate talent alone is never enough.
The same is true when it comes to making money. Take, for example, the top ten earners in the hedge fund industry for 2005:
James Simons, Renaissance Technologies Corp.: $1.5 billion
T. Boone Pickens, Jr., BP Capital Management: $1.4 billion
George Soros, Soros Fund Management: $840 million
Steven Cohen, SAC Capital Advisors: $550 million
Paul Tudor Jones II, Tudor Investment Corp.: $500 million
Edward Lampert, ESL Investments: $425 million
Bruce Kovner, Caxton Associates: $400 million
David Tepper, Appaloosa Management: $400 million
David Shaw, DE Shaw & Co.: $340 million
Stephen Mandel, Jr., Lone Pine Capital: $275 million
Those men got to the top ten by more than rules alone. While not everyone can make Wall Street’s top ten (and many of those top ten are trend-type traders), the story of the Turtles is compelling proof that it is possible to learn the steps top earners took and replicate their process.
The greater challenge, the real “secret,” comes in following the footsteps of those trading entrepreneurs in part two of the story. All of the winners role-model that extra drive — call it self-confidence, toughness, or entrepreneurial passion — that proves it is possible to surmount those biases inherent in human nature that hold the majority of people back.
To cultivate that extra drive, however, requires deliberate practice. Berkshire Hathaway’s Charlie Munger (Warren Buffet’s number two man) has lived it; he has said, “In my whole life, I have known no wise people over a broad subject matter area who didn’t read all the time — none, zero.”2 Most people do not want the real work that comes with real success.
Look at Eddie Lampert, too (number six on the top ten). His nurture process had him reverse-engineering Warren Buffett’s thought process. He said, “Putting myself in his shoes at that time, could I understand why he made the investments? That was part of my learning process.”3 Second-generation Turtles did the same thing when it came to Dennis.
Further, consider the similarities between the skills of a surgeon and those of a trader. Great surgeons are the ones who are conscientious, industrious, and boneheaded enough to keep practicing day and night for years on end.4 Once again, nurture over nature.
The bottom line is that the market doesn’t care about you personally. It doesn’t care about your gender, culture, religion, or race. It’s one of the last frontiers where low barriers to entry allow anyone to bet his cash and take a whack at making big money. In the end, traders like Jerry Parker, Salem Abraham, and Richard Dennis are playing a legitimate game that anyone can play.
And you don’t have to have been lucky enough to answer a Richard Dennis want ad in 1983 to be a successful trader. Salem Abraham only needed to know that Dennis and his philosophy existed; from that point on, he would figure it out. That is the reason why Abraham is so important to the story. He embodies the stubborn determination and entrepreneurial guts played out over the four decades since Dennis first entered the Chicago pits.
However, the best affirmation of this story’s enduring legacy came from Richard Sandor (a legendary figure in his own right, often viewed as a founding father of the financial futures markets) when we shared a few moments at Chicago O’Hare baggage claim in fall 2006. Sandor spoke directly to practicing, winning, and never giving up. Smiling broadly, he said with a glow of admiration and respect as we parted ways, “You do know that Richard Dennis is trading again?”
That simple comment said it all. It solidified my belief that we all have the opportunity to build upon our inborn gifts. Ultimately, the path that led a regular Chicago guy to the top, that led him to teach a handful of beginners to win big and make millions like him and in many ways inspired a generation of Wall Street titans from up close and afar, is a path we can all take.
Endnotes
Preface
1. David Greising, “Adlai Bankroller Dennis Eschews ‘Millionaire’ Tag,” Chicago Sun-Times, August 3, 1986, A3.
2. Andy Serwer, “The Greatest Money Manager of Our Time,” Fortune, November 15, 2006 (4:07 P.M. EST).
3. Jeffrey Kluger, “Why We Worry About the Things We Shouldn’t and Ignore the Things We Should,” Time, November 26, 2006.
4. Adam Levy, “Brain Scans Show Link Between Lust for Sex and Money,” February 1, 2006. See www.bloomberg.com.
Chapter 1
1. Jack D. Schwager, Market Wizards: Interviews with Top Traders (New York: HarperCollins, 1993).
2. Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders (New York: HarperBusiness, 1992).
3. Stephen Jay Gould, The Mismeasure of Man (New York: W. Norton & Company, 1996).
4. Ibid.
5. Marc E. Pratarelli and Krystal D. Mize, Biological Determinism/ Fatalism: Are They Extreme Cases of Inference in Evolutionary Psychology, 2002.
6. Jeffrey Pfeffer, “Only the Bulldogs Survive,” Business 2.0, September 2006, p. 62.
7. Thomas Petzinger, Jr., “Speculator Richard Dennis Moves Markets and Makes Millions in Commodity Trades,” Wall Street Journal, November 8, 1983.
8. Jenny Anderson, “Hedge Funds Are Back (Were They Ever Gone?),” New York Times, August 4, 2006.
9. Andrew Barber and Rich Blake, Trader Magazine, August/September 2006, p.76.
Chapter 2
1. Making Oodles of Boodle, Time, June 22, 1987, p. 49.
2. Julia M. Flynn, “Market Turmoil; Trader’s Survival Lessons,” New York Times, October 28, 1987.
3. Manager Profiles, Dennis Trading Group, Inc., BMFR, 4th Quarter (1998). See www.barclaygrp.com.
4. Flynn, “Market Turmoil.”
5. David Greising, “Richard Dennis: The Man Behind All That Money,” Chicago Sun-Times, February 1, 1987, p. A1.
6. See www.philosophypages.com.
7. Kevin Koy, The Big Hitters (Chicago: Intermarket Publishing Corp., 1986).
8. Richard J. Dennis, Cato’s Letter #6, “Toward a Moral Drug Policy,” The Cato Institute, 1991.
9. Douglas Bauer, “Prince of the Pit,” New York Times, April 25, 1976.
10. Geoffrey Keating, “How Richard Dennis Became a Commodity Trader and Made $102,000 One Year While Remaining Skeptical of Fat Cats,” Chicago Tribune, November 4, 1973, p. H24.
11. Bauer, “Prince of the Pit.”
12. Keating, “How Richard Dennis Became a Commodity Trader.”
13. Bauer, “Prince of the Pit.”
14. Ibid.
15. Dennis, Cato’s Letter #6.
16. Ibid.
17. Holcomb B. Noble and David C. Anderson, Endpaper, New York Times, December 26, 1976.
18. Art Collins audiotape interview with Richard Dennis, 2005.
19. Bauer, “Prince of the Pit.”
20. Ibid.
21. Thomas Petzinger, Jr., “Speculator Richard Dennis Moves Markets and Makes Millions in Commodity Trades,” Wall Street Journal, November 8, 1983.
22. Ibid.
23. David Greising, “Adlai Bankroller Dennis Eschews ‘Millionaire’ Tag,” Chicago Sun-Times, August 3, 1986, p. A3.
; 24. Ibid.
25. Donald R. Katz, “Richard Dennis: The Once and Futures King,” Esquire, December 1986.
26. Jonathan R. Laing, “$200 Million Swinger: Meet Richard Dennis, Commodities Speculator,” Barron’s National Business and Financial Weekly, vol. 66, no. 7 (February 17, 1986), 8.
27. Laurie Cohen, “Farmers Fume Over Prices,” Chicago Tribune, January 15, 1984.
28. Ibid.
29. Michael Ervin, “Trader Richard Dennis Gets Back Into the Game … Again,” Central Penn Business Journal, vol. 7, no. 2, sec. 1 (September 1992), 12.
30. Ibid.
31. Peter Newcomb, “Would You Play Poker With This Man? Do You Think You’d Win?” Forbes (October 27, 1986), p. 324.
32. Kevin Koy, The Big Hitters (Chicago: Intermarket Publishing Corp., 1986).
33. Laurie Cohen, “A Rare Trip: Trading Pit to Think Tank,” Chicago Tribune, July 31, 1983.
34. Dennis, Cato’s Letter #6.
35. Laing, “$200 Million Swinger.”
36. Ibid.
37. Collins Audiotape interview with Richard Dennis.
38. Ginger Szala, “Once a Trader … Profile of Richard J. Dennis, Futures Funds Trader,” Futures, August 1991, p. 46.
Chapter 3
1. Trading Places, directed by John Landis and written by Timothy Harris and Herschel Weingrod. Don Ameche, Dan Aykroyd, Ralph Bellamy and Eddie Murphy, performers. Distributed by Paramount, 1983.
2. Collins audiotape interview with Richard Dennis.
3. Koy, The Big Hitters.
4. Keith Button, “A Turtle’s Take.” Managed Account Reports, February 2004, p. 8.
5. “The Billion Dollar Club,” Financial Trader Magazine, vol. 1, no. 7 (September/October 1994).
6. Stanley W. Angrist, “Winning Commodity Traders May Be Made, Not Born,” Wall Street Journal, September 5, 1989.
7. Greg Burns, “Financial on the Move: Former ‘Turtle’ Turns Caution into an Asset,” Chicago Sun-Times, 1989.
8. Koy, The Big Hitters.
9. “The Life Blood of Chicago,” Managed Account Reports, September 2004, pp. 11–12.
10. Ibid.
11. Button, “A Turtle’s Take.”
12. Schwager, The New Market Wizards.
13. Ibid.
14. Ibid.
15. Laing, “$200 Million Swinger.”
16. Ibid.
17. Katz, “Richard Dennis: The Once and Futures King.”
18. Adam Hamilton, “Surviving Speculation,” December 31, 2004. See www.ZealLLC.com.
19. “Turtles Outperform Industry in a Challenging Year,” The Barclay Group (1995), 1st quarter.
20. Ibid.
21. Button, “A Turtle’s Take.”
Chapter 4
1. en.wikipedia.org/wiki/Scientific_method.
2. Ibid.
3. Collins audiotape interview with Richard Dennis.
4. Van Tharp. See www.iitm.com.
5. Collins audio tape interview with Richard Dennis.
6. Ibid.
7. Barbara Saslaw Dixon, “Confessions of a Trend Follower,” Commodities Magazine, December 1974, pp. 19–21.
8. Ibid.
9. Darrell Jobman, “Richard Donchian: Pioneer of Trend-Trading,” Commodities Magazine, September 1980, pp. 40–42.
10. Koy, The Big Hitters.
11. Katz, “Richard Dennis: The Once and Futures King.”
12. Laing, “$200 Million Swinger.”
13. “The Whiz Kid of Futures Trading,” Business Week, 1982, p. 102.
14. Susan Abbott, “Richard Dennis: Turning a Summer Job into a Legend,” Futures Magazine, September 1983.
15. Collins audiotape interview with Richard Dennis.
16. Abbott, “Richard Dennis.”
17. “William Eckhardt: Top Systems Traders,” Futures Industry Association. Speech on audiotape, 1992.
18. Ibid.
19. Abbott, “Richard Dennis.”
20. “William Eckhardt: Top Systems Traders.”
21. Ibid.
22. Ibid.
23. Ibid.
24. Ibid.
25. Ibid.
26. Keating, “How Richard Dennis Became a Commodity Trader.”
27. “William Eckhardt: Top Systems Traders.”
28. “The Whiz Kid of Futures Trading.”
29. Abbott, “Richard Dennis.”
30. Kevin, The Big Hitters.
31. Laing, “$200 Million Swinger.”
32. “William Eckhardt: Top Systems Traders.”
33. Koy, The Big Hitters.
34. Abbott, “Richard Dennis.”
35. “William Eckhardt: Top Systems Traders.”
36. Ibid.
37. Bradley Rotter interview.
Chapter 5
1. http://en.wikipedia.org/wiki/Type_I_and_type_II_errors.
2. TASS, “Twenty Traders Talk,” William Eckhardt. June 29, 1996.
3. http://en.wikipedia.org/wiki/Occam’s_Razor.
4. Collins audiotape interview.
5. TASS, “Twenty Traders Talk.”
6. Ibid.
7. Trading Systems Review, FIA Futures and Options Expo Audio, November 8, 2002.
8. Stanley W. Angrist, “Traders in the Slippery Oil Market Bet That Slide Won’t Last,” Wall Street Journal, October 25, 1990.
9. Ibid.
10. Trading Systems Review, FIA Futures and Options Expo Audio.
11. TASS, “Twenty Traders Talk.”
12. Ben Warwick, “Turtle Wisdom.” Managed Account Reports, Inc., 2001.
13. “William Eckhardt: Top Systems Traders.”
14. David Cheval and Patricia N. Gillman. How to Become a CTA: Based on CME Seminars, 1992–1994, edited by Susan Abbott Gidel (Chicago Mercantile Exchange, 1994).
15. FIA Futures and Options Expo Audio.
16. Ibid.
17. McRae, “Top Traders.” Managed Derivatives, May 1996.
18. Ibid.
19. Ibid.
20. Ibid.
21. Cheval and Gillman, How to Become a CTA.
22. McRae, “Top Traders.”
23. Boris Schlossberg, “Trading House,” Stocks, Futures & Options Magazine, vol. 5, no. 2 (February 2006).
24. Ibid.
Chapter 6
1. RAM Management Group, Ltd., Barclays Managed Futures Report, 2nd Quarter (1998).
2. Ervin, “Trader Richard Dennis Gets Back Into the Game … Again.”
3. Ginger Szala, “Even Without Dennis, ‘Turtles’ Still Keeping Apace in Trading Race: Traders Following Methods of Retired Trader Richard J. Dennis,” Futures, vol. 18, no. 5 (May 1989), 72.
4. Greg Burns, “Rich Dennis: A Gunslinger No More,” Business Week, April 7, 1997.
5. Brett N. Steenbarger, “Trading the Ranger Way: Training the Elite Trader.” See www.BrettSteenbarger.com
6. Brace E. Barber, Ranger School: No Excuse Leadership (Brace E. Barber, 2000).
7. Button, “A Turtle’s Take.”
Chapter 7
1. Trading Places.
2. Stanley W. Angrist, “Winning Commodity Traders May Be Made, Not Born,” Wall Street Journal, September 5, 1989.
3. See www.turtletradingsoftware.com, April 16, 2003.
4. Ibid.
5. Ibid.
6. See www.turtletradingsoftware.com, July 25, 2003.
7. See www.turtletradingsoftware.com, November 14, 2005.
8. See www.turtletradingsoftware.com, February 08, 2006.
9. Richard Dennis memo, April 23, 1986.
10. Collins audiotape interview with Richard Dennis.
The Complete TurtleTrader Page 21
