“Market Wizards” Advice: Doing the Uncomfortable Thing
Excerpted with permission of the publisher, John Wiley & Sons, from “The Little Book of Market Wizards: Lessons from the Greatest Traders,” by Jack D. Schwager. Copyright © 2014 by Jack D. Schwager. All rights reserved. This book is available at all bookstores and online booksellers.
Jack Schwager interviewed the top traders about their experiences and wrote about his conversations in “Market Wizards,” a 1989 book that became a bestseller and spawned three other volumes. This article is an excerpt from his new book, “The Little Book of Market Wizards,” which distills the valuable insights from these interviews over the years into essential lessons every investor can benefit from.
William Eckhardt, a long-term successful trader and commodity trading advisor, believes that the natural human tendency to seek comfort leads people to make decisions that are worse than random in trading.
I want to be clear. You have probably heard the famous quote by Princeton University economics professor Burton Malkiel, “A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts,” or some variation of that theme frequently uttered by those deriding the purported folly of trying to beat the market. Eckhardt is not saying that. He is not saying a monkey could do as well as the professional money managers. Eckhardt is saying the monkey will do better.
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