Market Wizard Mark Cook

market wizards

Stock Market WizardsJack Schwager’s interview with Mark Cook from Stock Market Wizards was the first interview in quite some time that really excited me. It is also the first time that I have ever looked up how far away from me a trader lives (just under 2 hours). Even more than most of the traders featured, Cook came across as a very down to earth,, normal guy. I like that.

I would love the experience of sitting and talking to him for a while. I also like his strategy. He seems very systematic in the way he approaches options trading. While I don’t know much about options, I am always attracted to systematic trading approaches. I would be very interested in learning more about Cook’s approach.

Top Five Quotes From Market Wizard Mark Cook:

“I realized that the money I had lost had been made by the traders who sold the options that I bought.” – Mark Cook

Michael Covel was the first person I heard talk about who the winners were on the opposite side of losing trades. Here we see Cook referencing the same point. Covel was talking about funds that made huge profits from the financial meltdown and the dot com bubble, while Cook was discussing a much smaller scale. The principle is the same, however. Trading is a zero sum game. It is important to remember that in order to make profits, you must take them from someone else.

“In 1981 I worked out a system for selling options when their premiums seemed too high and found someone to program the rules for me. Every week, the program would spit out a list of potential trades.” – Mark Cook

Cook was obviously ahead of his time when it came to technology. Imagine what people must have thought to hear that he was trading based on a computer printout in 1981. I was very impressed with the idea that he was developing systems over 30 years ago. It’s no wonder that someone on the cutting edge of technology ended up using it successfully.

“There is nothing more debilitating than borrowing money to put into a brokerage account to bring it up to zero. I was only twenty-eight years old at the time, and I was determined to claw my way back. I worked fourteen-hour days.” – Mark Cook

There are two takeaways from this quote. How terrible must he have felt to have to borrow $350,000 just to get back to even. I can remember a few times years ago when I lost more than I could afford to lose playing poker online. While that allows me to relate somewhat to Cook, I was handling a couple hundred dollars, not a couple hundred thousand dollars.

It is also worth noting how dedicated Cook was to earning the money back. The way he talks about his work ethic makes almost any other trader lazy by comparison. One of the things I would love to talk about with him is how he handled balancing that much work with the rest of his life.

“Gaining proficiency is the same in trading as in any other profession – it requires experience, and experience takes time.” – Mark Cook

This seemed to be a key point that Cook wanted to make. I like that he mentioned that you wouldn’t expect to become a doctor or lawyer by putting in a few hours a week. Trading is a serious business. In order to become successful, you absolutely must put in the long hours to gain both knowledge and experience.

“The main thing is that every trader has to be honest about his or her weakness and deal with it.” – Mark Cook

Cook followed this up with a couple of examples of people he attempted to help over the years. I thought it was very similar to the Van Tharp interview. In order to improve your trading, you have to take an honest look at your approach and figure out what your weakness is. Then you have to take the next step and actually correct that flaw. One thing I have learned this year is that I am still learning what my weaknesses are.