Nassim Taleb makes the rounds again

you're a fund of funds manager now??

:eek:

 

There is no such thing as luck

 

only the perception that something or someone was "lucky"

 

Very true. When you're hitting on all cylinders and doing it consistently, people immediately associate it with "luck". Those are the same people that would beg you to go with them to vegas, all expense paid, so your "luck" can help them hit the jack pot. They usually possess a shallow understanding about the true definition of "luck".

 

Your statement is so categoric and dry that invites comments.

In my opinion chance (something beyond humans' control, call it supreme power if you like) dictates our lives. We can just modulate it a little through our will.

Now, in trading I'd agree that you can modulate your chance to a larger degree, but only if you acknowledge it.

 

Just good and bad streaks of randomness.

(Actually, I had a dog named "Lucky", but he died. )

 

Only perceptions of luck exist and therefore luck only exists in someone's mind. Generally someone is considered to be lucky when they were out of control and escaped harm due to perhaps randomness or skill, but not a supreme power or so called "luck"

 

Agree.

But - compare it to racehorces. Only a very few % can win race after race. All the rest are forgotten as losers.

 

Very few people make money trading Surf. This is the unfortunate truth. That's not to say every dog doesn't have his day, but to find truly consistent traders, day in and day out, week in and week out, month in and month out, year in and year out, is very difficult.

Everyone has a strategy, everyone has an edge, everyone thinks they are super smart, everyone thinks they know how to manage risk, etc.

Surf, I think trading starts with character. Very few people have it. I am more interested in what a trader's genetic makeup is rather then hearing about his automated system. I came into this business years ago all bright eyed and bushy tailed and excited. What I have seen since I have been in this business has been very depressing. There is very little character or integrity if any. Everyone wants the money and they want it at someone else's expense.

I'll inject a quote here from our friend Seth Davis from the movie "Boiler Room":

"I read this article a while back, that said that Microsoft employs more millionaire secretary's that any other company in the world. They took stock options over Christmas bonuses. It was a good move. I remember there was this picture, of one of the groundskeepers next to his Ferrari. Blew my mind. you see shit like that, and it just plants seeds, makes you think its possible, even easy. And then you turn on the TV, and there's just more of it. The $87 Million lottery winner, that kid actor that just made 20 million o his last movie, that internet stock that shot through the roof, you could have made millions if you had just gotten in early, and that's exactly what I wanted to do: get in. I didn't want to be an innovator any more, i just wanted to make the quick and easy buck, i just wanted in. The Notorious BIG said it best: "Either you're slingin' crack-rock, or you've got a wicked jump-shot." Nobody wants to work for it anymore. There's no honor in taking that after school job at Mickey Dee's, honor's in the dollar, kid. So I went the white boy way of slinging crack-rock: I became a prop trader."

Notice I changed the last line. LOL. Unfortunately this is the truth. Our parents fought in wars, laid brick, laid track across the country, built our homes, our highways, laid the foundation for us so we could build nothing, create nothing, so we could hyper actively click a mouse button using someone else's money trying to create wealth. Most traders will end up flushing other people's money down the drain. They will ruin lives, break up families, some will turn to drugs or alcohol, some will hit the seminar circuit or sell something. I have noticed a tendency for most failed traders to go into sales of some sort since they are usually not qualified to do anything else.

So back to your question Surf, I don't really look at track records because I believe they have no value unless they established that track record on your watch. I believe in personal character, I believe in humility, I believe in people that openly admit they know nothing about the world or the markets, they simply want to play the odds and make trades with favorable outcomes. They believe they can manage risk better then the other guy.

Since a great part of this post has to deal with character, I want to close with a quote from one of my favorite movies "The Big Kahuna" which starred Kevin Spacey and Danny Devito. Towards the end of the film, Phil Cooper, played brilliantly by Danny Devito is having a conversation with a young cocky kid about character towards the end of a sales convention in Wichita, KS selling lubricants.

Devito asks the young kid if he believes he has character in which Devito tells the kid he believes he doesn't have any. Devito continues: "I'm saying you've already done plenty of things to regret, you just don't know what they are. It's when you discover them, when you see the folly in something you've done, and you wish that you had it do over, but you know you can't, because it's too late. So you pick that thing up, and carry it with you to remind you that life goes on, the world will spin without you, you really don't matter in the end. Then you will gain character, because honesty will reach out from inside and tattoo itself across your face."

 

Great quote from the film "Match Point":

"The man who said 'I'd rather be lucky than good’ saw deeply into life. People are afraid to face how great a part of life is dependent on luck. It's scary to think so much is out of one's control. There are moments in a match when the ball hits the top of the net and for a split second it can either go forward or fall back. With a little luck, it goes forward and you win…or maybe it doesn’t, and you lose.”