“There are a million ways to make money in the markets. The irony is that they are all very difficult to find.”
― Jack D. Schwager
“Michael Jordan didn’t become a great basketball player because he wanted to do product endorsements. Van Gogh didn’t become a great painter because he dreamed that one day his paintings would sell for $50 million.”
― Jack D. Schwager, Stock Market Wizards
“Being wrong is acceptable, but staying wrong is totally unacceptable.”
― Jack D. Schwager, Stock Market Wizards
“You just stay focused on what you have to do. Exactly.”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“Make the calls. Maybe they won’t talk to you, but I guarantee that if you don’t call, they won’t talk to you.”
― Jack D. Schwager, Stock Market Wizards
“One of my favorite patterns is the tendency for the markets to move from relative lows to relative highs and vice versa every two to four days. This pattern is a function of human behavior. It takes several days of a market rallying before it looks really good. That’s when everyone wants to buy it, and that’s the time when the professionals, like myself, are selling. Conversely, when the market has been down for a few days, and everyone is bearish, that’s the time I like to be buying.”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“I discovered that you can’t train people how to trade by just imparting knowledge. The key to trading success is emotional discipline. Making money has nothing to do with intelligence. Think of all the bright people that choose careers on Wall Street. If intelligence were the key, there would be a lot more people making money trading.”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“You need to be willing to call people to get information.”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“Another way to determine the direction of the general market is to focus on how the leading stocks are performing. If the stocks that have been leading the bull market start breaking down, that is a major sign the market has topped. Another important factor to watch is the Federal Reserve discount rate. Usually, after the Fed raises the rate two or three times, the market runs into trouble.”
― Jack D. Schwager, Market Wizards: Interviews With Top Traders
“If you don’t stay with your winners, you are not going to be able to pay for the losers.”
― Jack D. Schwager, Market Wizards: Interviews With Top Traders
“You don’t want to have a position before a move has started. You want to wait until the move is already under way before you get into the market.”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“If instead of saying, “I’m going to do this trade,” you say, “I’m going to watch myself do this trade,” all of a sudden you find that the process is a lot easier.”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“My goal on Wall Street was never to get rich but to stay in business. There’s a big difference. If you’re out of the business, you can never get rich. That’s why you have to be especially cautious when you’re trading a larger position size.”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“Actually, the best traders have no ego.”
― Jack D. Schwager, Market Wizards: Interviews With Top Traders
“you have enough monkeys randomly striking keyboard keys (they have recently traded in their typewriters for PCs), one of them will eventually type Hamlet”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“Buffett being penalized for underperforming versus managers riding the long side of the dot-com bubble is a perfect illustration of a common investor mistake—failing to realize that often the managers with the highest returns achieve those results because they’re taking the most risk, not because they have the greatest skill.”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“Indeed, I have found that confidence is one of the most consistent traits exhibited by the successful traders I have interviewed.”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
“Even a poor trading system could make money with good money management.”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
“There is no single market secret to discover, no single correct way to trade the markets. Those seeking the one true answer to the markets haven’t even gotten as far as asking the right question, let alone getting the right answer.”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
“Investors often make the mistake of equating manager performance in a given year with manager skill. In some instances, more skilled managers will underperform because they refuse to participate in market bubbles. In fact, during market bubbles, the best performers are often the most imprudent rather than the most skilled managers.”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“One of the jobs of a good trader is to imagine alternative scenarios. I try to form many different mental pictures of what the world should be like and wait for one of them to be confirmed. You keep trying them on one at a time. Inevitably, most of these pictures will turn out to be wrong—that is, only a few elements of the picture may prove correct. But then, all of a sudden, you will find that in one picture, nine out of ten elements click. That scenario then becomes your image of the world reality.”
― Jack D. Schwager, Market Wizards: Interviews With Top Traders
“But the fact is: The people who are really successful in trading are tremendously hard workers.”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
“About every two generations—roughly every forty-seven to sixty years—there’s a deflationary market. For example, in respect to the commodity markets, we’re currently in a deflationary phase that began in 1980. Over the past two hundred years, these deflationary phases have typically lasted between eight and twelve years. Since we’re currently in the twelfth year of commodity price deflation, I think we’re very close to a major bottom in commodity prices.”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“Traders focus almost entirely on where to enter a trade. In reality, the entry size is often more important than the entry price”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“The idea that trading success is tied to finding some specific ideal approach is misguided. There is no single correct methodology.”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
“Generals always fight the last war,”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
“relationships. For example, if the S&P was moving in an inverse lockstep to the bonds, and bonds were down for the day, but the S&P was not responding on the upside, it would tell me I should sell the S&P.”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“Coming back again to the investment bank world, they have meetings and all sorts of stuff going on that suck up time. Traders would all complain about the waste of time, but what it actually meant was that it limited the amount of time they were in front of their screens staring at their positions. You don’t want to be sitting in front of your screen and staring at market prices for 12 hours a day. Staring at the price is not going to tell you very much.”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“So, one of your shortcomings has been in letting your rational assessment of a situation keep you from participating in a psychologically driven trade. Yes, failing to participate in markets when the fundamentals are less important than the psychology. But how do you recognize that type of situation? Well, that’s the key question, isn’t it? [He laughs.]”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“If trading (or any other job or endeavor) is a source of anxiety, fear, frustration, depression, or anger, something is wrong—even if you are successful in a conventional sense,”
― Jack D. Schwager, The New Market Wizards: Conversations with America’s Top Traders
“Those who want to win and lack skill can get someone with skill to help them. I”
― Jack D. Schwager, Market Wizards: Interviews With Top Traders
“Either go at it full force or don’t go at it at all. Don’t dabble.”
― Jack D. Schwager, Stock Market Wizards
“Failure Is Not Predictive”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
“I have what I call my Evel Knievel screen. These are companies that are trying to jump the Grand Canyon and probably won’t make it. There are only two conditions for the screen. First, the company is trading at more than five times book value. Second, the company is losing money. My job is to figure out which stocks won’t make it across the Grand Canyon and then go short those stocks.”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“You can use charts to give you a plus or minus toward your view, but you can never start with the chart.”
― Jack D. Schwager, Hedge Fund Market Wizards: How Winning Traders Win
“In trading, 80 percent of your profits come from 20 percent of your ideas.”
― Jack D. Schwager, The Little Book of Market Wizards: Lessons from the Greatest Traders
Leave a Reply