Jack Schwager’s interview with Steve Clark in Hedge Fund Market Wizards was another interview where we didn’t get a lot of nuts and bolts examples of trades. Instead, we got a very real perspective on what goes on inside the mind of a successful trader. The big shock was that Steve Clark doesn’t seem to consider himself very successful at all. He actually comes off as depressed and disappointed with himself.
Top Five Quotes From Market Wizard Steve Clark
I was so inexperienced that I didn’t have the fear – the fear that cripples people who have been in the business too long. I have seen that so many times. Very few people maintain their ability to take risk throughout their career. Most don’t Most can’t. They have had too many bad things happen to them, too many fat tails, and it damages people – Steve Clark
What Clark is talking about here sounds like the opposite of beginner’s luck. I have seen a number of examples of this in the business world. People who work their whole lives to build something by taking risks suddenly don’t want to take risks anymore. They realize at some point that they now have things that they are no longer willing to lose. They have too much experience watching others fail.
It was a terrible shock to me ego. I began to doubt my ability. It was a very depressing time. It lasted for several months. I’ve seen this happen to many traders, and I have gone through it sever times myself. When you find that you can’t make any money, smaller and smaller losses take on greater and greater emotional significance, and you lose all perspective. – Steve Clark
If Schwager didn’t point out Clark’s tremendous record of returns, we could easily mistake him for someone like me that has never had any trading success. What Clark is saying makes perfect sense, though. When you are depressed and losing, every little thing that goes wrong feels like the end of the world.
Time and time again, I give traders who work for me one piece of advice: Do more of what works and less of what doesn’t. – Steve Clark
This advice sounds so simple. It should be easy to implement. The problem is, we constantly find ourselves striving to improve our weaknesses while allowing our greatest strengths to deteriorate. Find an area where you are having success and focus on that!
I’m searching to be satisfied by something. Let me tell you the trouble with trading. There is no career in trading. You are only as good as your last trade, and that is it. You build nothing; you just trade. The day you stop trading, it’s gone. – Steve Clark
Again, Clark sounds depresses…..almost bitter. Once again though, I can see where he is coming from. After devoting his entire life to trading, he doesn’t have a whole lot to show for it, aside from money. Perhaps he would have been happier building a business or starting a website.
Not everyone who says that they want to be a trader really does. Trading has this macho mystique. People will say they want to be a trader and won’t admit to perhaps wanting to be an analyst, even if they would be happier as an analyst. They might even make more money as an analyst because they would be better at it. – Steve Clark
Example: most of the people who question the Market Wizards quotes I regularly tweet.
Of course, I might very well fall into that category myself. I’ve never had much success trading. I have had a good bit of success writing about trading. Maybe I would be happier overall if I gave up, put my saving into an index fund (or an Ivy Portfolio) and focused on my writing.