Take physic, pomp

Excellent trader’s rant from Jack Crooks of Black Swan Capital today

You need to click through here to get the whole thing and every word is recommended, but here below is an excerpt. Crooks nails a few basic and valuable points in his short article:

  • don’t try to know everything about the market
  • don’t expect anyone else to know everything about the market
  • play to your strong points, acknowledge your weak points
  • and as Livermore said “be right, sit tight”

Those and plenty more. Good headcheck material. Here’s that excerpt:

I once spoke with a very smart man. A man who has made hundreds of millions of dollars for himself and investors over the years—his name is Bill Dunn. I don’t know Mr. Dunn personally, unfortunately, even though we live in the same town. But I do greatly respect him and what he has achieved. He is one of the largest Commodities Trading Advisors out there, and one of the most successful investors ever—real Hall of Fame material.

When I spoke to Mr. Dunn, about 15-years ago, we talked a bit about a man named Ludwig von Mises—a favorite of Mr. Dunn’s and me. We discussed briefly the economy, etc. He was very gracious to even spend time with me—I was impressed. I asked him about how he thought x-y-z would impact the prices of x-y-z…I don’t remember the exact question. But I do remember the answer, he said: “I don’t know nor do I care. I’m interested in that stuff, but I never let it impact our trading decisions at Dunn Capital Management.” That was a wake-up call to me at the time.

Here is arguably one of the best investors ever that doesn’t try to forecast or predict, and by the way, you will likely never see him on TV. Years later read an interview of him in a book about trend trading, he hadn’t changed a bit. He said this:

“I ride the bucking bronco.”

Bingo! An ah-ha moment indeed!

Not sure there is a moral to this rant other than this: be careful about prediction and do it in time frame and during periods that appear seemingly better than normal for prediction, based on some knowledge of your edge (system for getting you in and out of trades). And of course, be careful of the most confident TV guests.

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