Unknown Market Wizards by Jack D. Schwager

Author:Jack D. Schwager [Schwager, Jack D.]
Language: eng
Format: epub, mobi
Publisher: Harriman House
Published: 2020-11-02T16:00:00+00:00

How did you develop your interest in trading?

Speculating on the outcome of events has always been something very intuitive to me. When I was in high school, I was a bookie for students who wanted to bet on sports events. I would post the point spread on all the football games, and I would take either side. I would charge a vig, though, just like Las Vegas does, which is how I made money. I would charge $1.10 for every $1.00 I had to pay out.

So, you were the casino.

Exactly, I was the casino.

How much money did you make doing this?

I was up about $7,000 by my senior year. I was going to turn 18 on December 17, and I had decided to stop acting as a bookie before my birthday because I didn’t want to be doing something illegal when I was an adult. That Thanksgiving, which was one of the last weekends I was still going to be doing this, 24 out of 28 favorites won. Most people like to bet on the favorite. On that one day, I lost all the money I had made through high school plus an additional $1,500 that I didn’t have.

How did you feel when you realized that you had lost everything you had made over several years, and then some, in a single day?

It was devastating. But the biggest thing I learned from that experience was that no matter how bad things are, the sun always rises the next day.

Did the experience of that weekend when you were a teen have any influence on you when you became a trader years later?

Absolutely. Going through that loss, which I didn’t think was possible, made me aware of the potential for outlier events when I began trading, I appreciated that Lehman Brothers could happen. I understood that these seemingly inconceivable macro events could take place in the market because, at some primal level in my formative years of risk-taking, I was hit by an outlier event. Before I ever began trading, I knew it was imperative to manage risk.

Was that knowledge entirely due to the large loss day you experienced when you were in high school?

I knew it from that event and from my experience as a Marine.

Why did you join the Marines?

I was not an academic achiever when I was in high school. I think my GPA was something like 1.8. My only interest was in running my betting operation and an economics class, which I did well on. Although I realized college was important, I didn’t feel I was ready for it. About a month before my high school graduation, a Navy recruiter, who had come to our school, asked me whether I had thought of joining the Navy. I immediately told him, “No, I’m going to join the Marines.”

At what point before then did you know that you wanted to join the Marines?

I didn’t know. It popped into my head when I was asked to join the Navy. I had poor grades and lacked self-esteem.

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