I play poker and trade options, seeking edges from study, reflection and analytics.

Search, Listen and Read

Search, Listen and Read

I got to swap podcasts with a not-so-old, old friend recently. The exchange gave this post a needed nudge.

The idea is simple: a recurring Medium-style post that highlights where I'm finding value in books, podcasts and on the web.

About: Lifestyle & Passion

Source: Jim Cramer's "Confessions of a Street Addict"

This is a clear and compelling read for those interested in classic Wall Street stories from exceptional performers. Cramer's early timeline is motivating yet envious as luck and timing (coupled with amazing talent, intellect and energy) put is career on an incredible trajectory.

I'm just a few chapters in, but the last section I read was eye-opening -- about how Street "insiders" and traders, through high-volume trading (i.e. commission generation), create business relationships with influential analysts and bankers to gain insight into future market drivers...

"I still can't explain the choice to anybody in my family. I still can't explain why I wanted Goldman Sachs so badly that I risked the wrath of my family and the anger of my conscience. I knew, however, that I loved the rigor, the intensity of the company. And, yes, I wanted the money. I wanted to be successful at the pinnacle of capitalism and there was no sense going back after you finally made it to base camp. I wanted it, in the end, too much, because, as I would later learn, I was always too willing to postpone or sacrifice the people and things in life that mattered in favor of the need to be successful."

About: Entrepreneurship & Investing

Source: Marketwatch article, "Ashton Kutcher's best investments" (http://www.marketwatch.com/story/ashton-kutchers-best-investments-2017-05-08)

Quoting Kutcher:

"Optimism is priceless—but only when coupled with measurement.
Double down on your own expertise, your passion, the thing you do when you have free time."

About: Trading, Awareness & Discipline

Source: Chat with Traders podcast, Episode 121 "Tactics for better decision making, and skill versus luck w/ Michael Mauboussin" (https://chatwithtraders.com/ep-121-michael-mauboussin/)

Michael is widely-recognized as a thought leader on the subject of decision making, as well as thinking about things in the way of process over outcome, and skill vs luck. His discussion of journaling reinforced what I have experienced writing this blog and my trades.

"Journal what, why and expectations (Daniel Kahneman), repository to audit decisions to combat hindsight bias, creeping determinism, log quality of decisions [requires discipline]."

About: Trading Best Practices

Source: Blog by Brett Steenbarger, "Three Best Practices of Currently Successful Traders"  (http://traderfeed.blogspot.com/2017/04/three-best-practices-of-currently.html)

"It was simply a time period where opportunity was more scarce in that trader's strategy.
We've recently begun talking about each person's psychological setups: the cognitive, emotional, and physical factors that need to align for best trading. Edge occurs when our psychological setups overlap the setups offered by the market.
A process focus: being immersed in the doing rather than the results of the doing.
The worst traders have a passion for trading.  They need to trade. The best traders have a passion for trading well. They need to get better.  Show me what traders are doing outside of market hours, and I'll show you the odds on those traders' success."

About: Volatility & Science

Source: Real Vision's Adventures in Finance podcast, Episode 13 "What Lies Beneath: Volatility in a Peaceful World" (http://adventuresinfinance.realvision.libsynpro.com/website/what-lies-beneath-volatility-in-a-peaceful-world)

A timely topic for anyone participating meaningfully in the financial markets.

The guest also discusses an interesting product that might change your perception of time -- Tikker Watch.

About: Trading & Outperformance

Source: Valuewalk article, "Lessons from a Trading Great: Stanley Druckenmiller" (http://www.valuewalk.com/2016/12/lessons-from-a-trading-great-stanley-druckenmiller/)

Author highlights: 

"Mental flexibility
Independent thinking
Extreme competitiveness
Tireless inquisitiveness
Deep self-awareness

Maybe he’s a freak of nature or perhaps a secret Jesse Livermore / George Soros lovechild… or maybe he’s just a relentlessly determined trader who’s been on a lifelong path of mastery.

Stanley Druckenmiller throws conventional wisdom out the window. Instead of placing a lot of small diversified bets, he practices what we call the “Big Bet” philosophy, which consists of deploying a few large concentrated bets."

Quoting Druckenmiller:

"I never use valuation to time the market. I use liquidity considerations and technical analysis for timing. Valuation only tells me how far the market can go once a catalyst enters the picture to change the market direction.
The first thing I heard when I got in the business, not from my mentor, was bulls make money, bears make money, and pigs get slaughtered. I’m here to tell you I was a pig.
Avoiding loss should be the primary goal of every investor. This does not mean that investors should never incur the risk of any loss at all. Rather “don’t lose money” means that over several years an investment portfolio should not be exposed to appreciable loss of capital.
I’ve learned many things from [George Soros], but perhaps the most significant is that it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong. The few times that Soros has ever criticized me was when I was really right on a market and didn’t maximize the opportunity.
The practice of having “strong opinions, weakly held” is difficult but paramount to success.
If you’re extremely confident, taking a loss doesn’t bother you."

About: Trading Tips & Lessons

Source: The Trade Risk blog, "Trading Tips, Tricks, and Painfully Learned Lessons" (http://www.thetraderisk.com/trading-tips-tricks-and-painfully-learned-lessons/)

"Research, trade, adjust, document, rinse and repeat.

Master a setup and then expand.

Trade the market you have, not the one you want.

Some setups and strategies just don’t work well under certain market conditions. Want to trade momentum breakouts on the last week of the year with light volumes and no ranges? Good luck.

Get comfortable with the probabilities and variance of your trading strategy and create a review process to stop and reflect when times get challenging.

Remember, when you’re thinking about returns, you always need to factor in the relative risk required to achieve those results.

What can you automate to make your trading life easier?"

Let me know what you're searching for, listening to and reading about -- click "Leave a comment" below.

The "Not So and Sos" Return

The "Not So and Sos" Return

Trading Three Figures - Take Two

Trading Three Figures - Take Two