Wednesday, 18 April 2018

Book review: Veteran traders telling their fascinating war stories


It's been a while since the last time I read New Market Wizards, when I was in university. And since then a lot of developments have occurred in the financial markets, including the rapid evolution of hedge funds. This 4th sequel of market wizards shows how far the industry has evolved. The wizards interviewed in the book are more technical, discussing more complex methods of trading, in an environment very different than the previous interviews.

Like the previous Market Wizards books, and indeed just like in the market, the trading methods or philosophy applied by the wizards could not be more different from one another. Some even directly contradict one another, with surprisingly good results for each of them. This, of course, remains the underlying message of the Market Wizards books: bottom line, we need to figure out who we are and what kind of strategies could work with our temperament and world view.

One interesting remark made by Jack Schwager when people were asking him to introduce them to one of the wizards, to work under their apprenticeship and learn about their methods/system that bring success, in which he answers that it will be useless because the main point is to develop our own trading system that cater to our character. Just like Colm O’shea said “If I try to teach you what I do, you will fail because you are not me. If you hang around me, you will observe what I do, and you may pick up some good habits. But there are a lot of things you will want to do differently.”

Nevertheless, as different as these Wizards can be, they all share some similar traits that become the foundation of their trading approach.

First and foremost, they're all very dilligent about risk management, minimizing risk is almost the most sacred part of each one of these traders. They also trade only the size they're comfortable with. To them the market is always right, Steve Clark commented that the market is not about facts but people's opinion and positions that reflects their opinions, and they aren't afraid to cut losses when they're wrong. In a similar tone, Scott Ramsey said that there is one principle that you cannot violate: know what you can lose.

Meanwhile, as one wizards believe that price is not actually important (instead the size of your position is more crucial, to determine whether or not you can get out quickly), Edward Thorp complement this view by saying don’t bet more than you are comfortable with (and just take your time until you’re ready). Moreover, Jamie Mai highlighted that finding answers is much easier when you know in advance what the questions are, and another wizard gives the simplest wisdom of all when he said do what you do best, and so less of what you do badly.

Furthermore, as different as they may be, almost all of them point out the fact that profit is nice but it wont teach us anything, and one of the most important parts of trading is to make as much mistakes as we can, learn from them, and create our own system to avoid those mistakes.

And the interviews in this book provide us with exactly that, the raw and honest stories about their hopes, fears, and doubts, and their struggle and journey from nothing to become one of the best in the world. It is also, perhaps more importantly, about the long road on how they come to acquire/develop the skills or tools or principles that they eventually use to make them very successful (like Ray Dalio’s principles, which he then expanded into a very good book). And it’s all very human, and the lessons are also very applicable in any walks of life other than trading.

Just like the format in Dale Carnegie’s books, by the end of each chapter Jack Schwager provides a concluding paragraph to sum up the interviews, which is very helpful. But the real gem of the book is definitely the conclusion chapter, where everything are summarized so neatly, in which Schwager lists the ultimate 40 Market Wizards lessons, which, of course, I won’t spoil in this review.

This would definitely be the 1st book I recommend on anyone asking about trading/investing. An absolutely useful real-life manual for the battle on the financial market ground.

For more reviews, please visit my book review page on Amazon

Monday, 19 March 2018

Book review: The perfect introduction to Stoicism

"The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living" by Ryan Holiday

Stoicism is not a religion. In religion the sacred texts lay out the ideal way of life and guide us to try our best to live a sinless (perfect) life. Stoicism sees the world completely the opposite, it acknowledges the harsh realities of life, the chaotic mess of the world that is filled with imperfections. And instead of demanding us to live up to a certain perfect standard, it gives us the tools to handle the real broken situations on the ground.

Founded in Athens by Zeno of Citium in 3rd century BC, this branch of Greek philosophy got big in the Roman Empire, with its principle philosophers of Epictetus, Seneca, and ultimately Marcus Aurelius with his most-quoted memoir “Meditations.” The author of this book, Ryan Holiday, reads and re-reads Marcus Aurelius’ Meditations for 100+ times, which was the main reason why I choose this book as the 1st book I read on Stoicism.

Monday, 5 February 2018

Book review: A vital book to understand political Islam


This is an absolute important book to understand today's current affairs, which heavily linked with the rise of Islamic terrorism. The book is written by an ex-CIA analyst stationed in the Middle East, whom possess an incredible clarity over the geopolitics dynamics on the ground.

The premise of this book is to picture a world without Islam. How different it would have been, how the butterfly effects that never happened would turned out to be, and it's very sobering. This, in effect, becomes a book about the history of the world that has nothing to do with Islam.

Thursday, 18 January 2018

We need to talk about cryptomania

Every market crash is sparked by a trigger. Every trigger is preceded by a mania. Every mania began as an overshoot optimism. And every optimism started off by a justifying reason to be positive.

In 1880s the optimism was the invention of US railways. In 1920s the radio and motorcar companies. In 1980s the invention of microcomputers. In 1990s the optimism was the internet. In 2000s a complex invention of derivatives. And in 2010s? It's the blockchain technology and its cryptocurrencies.

Saturday, 16 December 2017

100 things I learned and did in 2017

  1. Hot damn, it’s already that time of the year again and 2017 is almost over! And what a crazy ride it has been, the North Korean nuclear threats, Zimbabwe’s [not a] military coup, Saudi Crown Prince offensives, Pakistan’s Fontgate, Prince Harry’s engagement to Rachel Zane, King of the North did it with his aunt, insane Bitcoin rally, the floodgate #MeToo has opened, Arsène Wenger contract extension at the very last minute, and I haven’t even mentioned the numerous shits Trump did.
  2. More than 70% of our planet's surface are covered by the oceans, but yet till this day we have only explored less than 5% of the ocean.
  3. In Michelangelo's painting "The Creation of Adam" the angels and the God who touch David's fingers were all inside of a brain. It took 500 years for someone to notice this in the painting, and the hidden message is that the divine gift does not come from a higher power, but from our own minds.
  4. The founder of South Korean giant Lotte, Shin Kyuk-ho, gave his company's name from a character from a novel "The Sorrows of Young Werther" by Johann Wolfgang von Goethe that he loved so much, Charlotte. Hence, the name of the company was taken from the last 4 letters of Charlotte.
  5. Have you ever wondered why almost every Vietnamese's last name are Nguyen? As it turns out it all started by Minh Mang emperor, whom during his 50 years life had 78 sons and 64 daughters. Now this is where it gets interesting: his 1st son had 64 children, his 3rd son had 144 children, his 4th son had 74 children, his 9th son had 62 children, his 37th son had 61 children. Not to mention the rest of his children who also had children of their own.
  6. But the record for the most children born to one woman belongs to Valentina Vassilyeva from Shuya, Russia. She gave birth to a total of 69 children in 27 births between 1725 and 1765, which consist of 16 pairs of twins, 7 sets of triplets and 4 sets of quadruplets. Holy crap.
  7. Do you know why football jersey number designate certain number to a position? For example no 1 goalkeeper, 2 normally for right back, 11 for left winger, and 9 for central striker? Because when jersey numbers were first made compulsory by the FA in 1939, the common formation was 2-3-5 and in the team sheet it would look like this (including goalkeeper): 1 ; 2,3 ; 4,5,6 ; 7,8,9,10,11. Meanwhile, football and rugby went their separate ways on 8 December 1863, at 7 PM, at a meeting at the Freemason's Tavern in Lincoln's Inn Fields in London, where the divided participants on the laws of the game disputed over hacking, that is, whether kicking opponents in the shins should be allowed or not.
  8. The oldest verified alphabet is the Phoenician alphabet (from c. 1050 BC). It is also the first widely used alphabet, which formed the basis of the Latin alphabet that is used in many parts of the world today.
  9. The 2nd atomic bomb, the Fat Man, wasn't intended to bomb Nagasaki. The chosen city was originally Kokura, but on that day 9 August 1945 a dense cloud covered Kokura. And the plane, after circling three times in vain and almost low in fuel, then decided to change course to Nagasaki. Hence, in Japan there's a phrase “the luck of Kokura."
  10. Viagra was first created to cure angina. But the drug's developer noticed some "side effects", which then became the main selling point of the drug. So I guess it's safe to say: have a chest pain? Get an erection!