distancing from Dennis, 140
DiMaria, Jim (cont.)
on end of Turtle program, 130–31, 135–36
entrepreneurial skills, 154
getting Turtle job, 32, 41
on Jerry Parker, 158
on Lucy Wyatt, 101–2
on office environment, 106
performance of, 116, 118, 123, 202, 209–10
on secrecy, 148
trader expectations, 70
Website, 197
where he is now, 210-–11
Dixon, Barbara, 53
Donchian, Richard, 52–53
Drexel Burnham Lambert, 9, 129–32, 133, 145–46
drugs
Dennis stance on, 24–25
Shannon and, 108–9
Drug Czar, 24
Eckhardt, Williamadmitting defeat in nature-versus-nurture battle, 46–47
commitment to “nature” philosophy, 3–5
Dale Dellutri and, 44
faith in underdog, 4
nature-versus-nurture debate and, xiii,3–8, 46–47
performance of, 46, 207
physical description of, 4
Richard Dennis and. See Dennis/Eckhardt relationshipon trading and intelligence, 47
Website, 215
where he is now, 211
Eckhardt Trading Company, 211, 220
EMC Capital Management, 210
empiricism, 11, 38, 51–52
end of Turtle program, 129–34
endnotes, 227–37
entrepreneurial spirit, 188
entrepreneurs, traits of, 156–58
entries and exits. See exiting markets;rules;
systems (breakout variants)
equity level, basing trades on, 56, 58–59
error types (I and II), 67
essay questions for prospects, 35–36
exiting marketsbuying rallies and, 70–72
importance of, over entering,62–63, 70–72, 79
rules summaries, 94
See also systems (breakout variants)
expectation (edge) calculations,68–70
Faber, David, 104
Faith, Curtis
allocation of trade monies and, 114, 116–18, 120–23
back to trading, 169–70
coming up short, 170
as Dennis’s chosen one, 120
end of Turtle program and, 137
giving Dennis’s rules away, 168–69
interview response, 39
losses, 169
performance of, 124–26, 169
personal and professional problems,169, 202–205
on Russell Sands, 168
on teaching trading and success,168
where he is now, 211
female Turtles, 101–2. See also Cheval, Lizfilter rule, 72–73
Florida State University, 249
Fornengo, John D., 173
fundamentals, 54–55, 84, 106, 160–63
futures contract, defined, 65–66
Gamsky, Joe, 37–38
Garfinkle, Michael, 67
Goldman Sachs, 8, 157, 174, 181
Goodman, Mark, 143
Gorbachev, Mikhail, 267
Gordon, Jeffallocation of trade monies and, 114, 115–16
background of, 33
on Curt Faith, 121
end of Turtle program and, 137, 145
getting Turtle job, 33, 40
performance of, 123, 228–30
political difference with Dennis,102–3, 119
S1, S2, S3 and, 73
on Bill Eckhart, 193
on trading strategy, 107
on Turtle definition, 100
where he is now, 211–12
Gould, Stephen Jay, 4
group dynamic, 109–11
Hare, Martin, 20–21
Hart, Gary, 103
Hawksbill Capital Management, 215
hedge fundsblowups, 163–65
top earners, 188–89
Henry, Scot, 173
Hite, Larry, 77, 132, 133, 187–88
Hume, David, 11, 29, 51
intelligence, trading and, 47, 156
interview process, for Turtles, 37–41
James River Capital, 147, 165–66
Jones, Paul Tudor, 7, 61, 139, 145, 181, 188
Jordan, Shaun, 191
JPD Enterprises Inc., 215, 220
Keefer, Erleon adding on, 107
on allocation of trade monies, 114, 119, 126
Bob Spear software and, 161
on Dennis risk taking, 22
getting Turtle job, 32, 38
on group dynamics, 110
interview challenges, 38
interview process, 38
on other Turtles, 33
on Parker success, 165–66
“proof of concept,” 103
researching/validating trading rules,126–27
risk-taking and, 126–27
on S3 trading, 73–74
on Sands and secrecy, 150
where he is now, 194
Kidder Peabody, 137–38, 147, 165–66, 173
Kovner, Bruce, xii, 7, 133, 181, 188
Kravis, Henry, xiiLampert, Edward, 188, 189
Le Beau, Charles, 37–38
Legg Mason, xiv, 9
Lewis, Michael, 255
Leyland, Jim, 43
Liar’s Poker, 255
Locke, John, 11, 29, 51
long defined, 65
portfolio selection/balancing and,94–98
long/short rule, 96–97
Long Term Capital Management(LTCM), 151
losses, accepting and managing,60–61, 77
Lu, Philip, 107–8, 123, 137, 194, 212–13, 230
Mandel, Stephen, Jr., 189
Marcellus, Robert, 173
market assessing state of, 56, 58
volatility of. See volatility of
marketmarket order, defined, 66
Market Wizards, 133–34, 137–38, 158, 170
Massey, James, 268
Mauboussin, Michael J., xiv, 9
mean reversion, 38, 164–65
Mechanica, 161
Melnick, Jim, 31, 123, 213–15
memo, on trading levels, 127–28
“memory-less trading,” 58
mental toughness, 187–88, 190
Meriwether, John W., 151
Merton, Robert H., 151
Meyer, Jack R., 8
MidAmerican Commodity Exchangebuying seat on, 12
Dennis experience at, 15–18
Miller, Bill, xiv-xvMiller, Dennis, 135
Mondale, Walter, 23, 42, 102–-3, 116
moneybasing trades on equity levels,58–59, 60
Dennis attitude toward, 12, 13, 21–22
leveraging, 88. See also
pyramidingperspective on trading, 49–50
See also allocation of trade monies
Moss, Robert, 16, 45, 48, 99-–100, 193
moving average defined, 66
process. See average true range (N)or ATR
Munger, Charlie, 189
Murphy, Eddie, 29, 30, 135
“N.” See average true range (N) orATR
nature-versus-nurture debate, 1–8
Dennis vs. Eckhardt views, 3–-4, 30–31
diverse backgrounds of participants,5–6, 31–36, 101–-2
Eckhardt admitting defeat, 46–47
IQ and, 4
key ingredient of participants, 6
learning environment, 7
measures/ratios and, 4
recruitment ad,1–3
Trading Places and, 29–30, 32, 113, 135
New Market Wizards, 183
number of Turtles, 99-–00
O’Brien, Mike, 123, 136, 233–34
Occam’s razor, 67
office environment, 100-–03, 106
Ortiz, David, 8
Ostgaard, Stig, 123, 137, 140
Parker, Jerry R.after
Turtle program, 7, 137–38, 153–66, 194-–97
allocation of trade monies and, 119
author discovering, xii-xiiibackground of, 34
on benefits of Turtle program,154–55
Bob Spear software and, 161
echoing Turtle message, 160
entrepreneurial skills, 156–58
faith philosophy, 158–59
fundamentals and, 160–63
getting Turtle job, 34
going solo, 136–37
hedge fund blowups and, 163–65
James River Capital and, 165–66
performance of, 119, 123, 124, 154, 155–56, 207
personal life, 154
political perspective, 102, 155
preparation and downtime, 104
reducing risk and succeeding, 138–41
return to Virginia, 106, 136, 137–38
Russell Sands and, 137–38, 147, 154
Salem Abraham and, 175–77
on simple systems, 74–75
success after Turtle program,138–41, 153–60
trader expectations, 70
trading tips and rules, 74–75, 77, 85–86
uniqueness of, compared to other Turtles, 156–58
where he is now, 7, 153–54, 213
Parker, Virginia, 143
Patton, George S., 153
performance, of Turtles, 123–26, 217-–44
philosophy of trading, 51–66
accepting/managing losses, 60–61, 77
core axioms, 55
equity level and, 56, 58
fundamentals and, 54–55, 84, 106, 160–63
importance of rules, 57–58
logic and consistent approaches,59–60
“memory-less trading” and, 58
optimal trade questions, 56–57, 58
reinforcing objectivity, 58, 59
risk aversion and, 57, 58, 59
rules vs. judgments, 52
scientific method and, 51–52
security cravings ascounterproductive, 60
similarity of markets, 53–54
state of market and, 56, 58
trading numbers, 54
volatility of market and, 56, 58, 64
worrying about exit point, not entry,62–63
See also systems (breakout variants);trend trading
Pickens, T. Boone, 173, 178, 186, 188
Plyam, Yuri, 169, 170
political ambitions, 23–25
political differences, 101–3, 119, 155
portfolio selection and balancing,94–98
Proctor, Brian, 123, 137, 220–21
pyramidingdescribed, 87–88
risk of, 92–94
sample trade, 88–92
questions, for optimal trade, 56–57, 58
Rabar, Paulafter Turtle program, 137, 138, 165–66, 188
allocation of trade monies, 119
background of, 37
entrepreneurial skills, 154, 188
getting Turtle job, 37–38, 40
interview process, 37–38
performance of, 123, 194, 207
researching/validating trading rules,126–27
trader expectations, 70
where he is now, 213
Rabar Market Research, Inc. Diversified, 220
rallies, buying, 70–72
random entries, 79
Reason Foundation, 24
recruiting Turtles, –-3
Richmond Group Fund, 173
risk, reducing after Turtle program,138–41
risk aversion, 57, 58, 59
Risk board game, 37
risk management, 45, 57, 79, 80–87, 96, 161, 177.
See also averagetrue range (N) or ATR
Robertson, Julian, xiiRotter, Bradley, 22, 32, 64–65, 165, 213
rules, 67–98
Curtis Faith giving away, 168–69
entries and exits, 70–72. See also
systems (breakout variants)error types (I and II), 67
examples illustrating, 74–79
exceptions to, 107
exit rule summaries, 94
expectation (edge) calculations,68–70
importance of following, 57–58, 64–65
judgments vs., 52
keeping them simple, 67, 74–75
long/short, 96–97
portfolio selection and balancing,94–98
pyramiding, 87–92
random entries, 79
reducing risk of, 138–41
Russell Sands selling, 147–50
unit limits, 86
validating, 127
See also average true range (N) orATR
Salomon Brothers, 20, 151, 268
Sandor, Richard, 10, 131, 190
Sands, Russell, 147–50
Curtis Faith and, 122, 168
Jerry Parker and, 137–38, 147, 154
on lack of supervision, 100
leaving program, 106, 147
selling Dennis’s rules, 147–50
Saxon Investment Corporation, 215, 220
Scholes, Myron S., 151
Schwager, Jack, 133–34, 137, 170
scientific method, 51–52
Second-generation Turtles, 173–74.
See also Abraham, Salem
security cravings as counterproductive,60
Seidler, Howard, 70, 114, 118, 123, 137, 154, 207, 215, 220, 241–42
Selling the Invisible, 158
Seykota, Ed, 75, 133, 181
Shanks, Tomafter Turtle program, 141–42
background of, 33
on dissimilarities in Turtle tradingstyles, 142–43
on Jiri “George” Svoboda, 201
end of Turtle program and, 137
entrepreneurial skills, 154
getting Turtle job, 33
performance of, 123, 141–42, 207, 220, 243
researching/validating trading rules,126–27
trading rules, 107, 141–42
on value of mentor, 155
Website, 215
where he is now, 213
Shannon, Michaelon Curt Faith, 122–23
on Dennis concerns, 128
on Dennis image, 21
on Dennis risk taking, 132–33
drug trial and Dennis, 10–-9
falsifying résumé, 31
getting Turtle job, 31, 37
on Liz Cheval, 105
on office environment, 102, 105, 122–23, 128
on political diversity in office, 102
on symbiosis of Dennis andEckhardt, 45–46
on trader egos, 137
on Trading Places, 30
on Turtle secrecy, 148
on Turtle trading skills, 136
where he is now, 214
Shaw, David, 189
short(ing)defined, 65
long/short rule and, 96–97
portfolio selection/balancing and,94–98
as Turtle strategy, 71
understanding process, 72
Simons, James, 188
Soderquist, Craig, 99, 137
Soros, George, xii, 9, 25, 188
Spear, Bob, 161
stop order, defined, 66
Svoboda, Jiri “George”
allocation of trade monies and, 118
background, 33
getting Turtle job, 33
leaving and returning, 105
performance of, 118
researching/validating trading rules,126–27
trading strategies, 105
where he is now, 214
Synopsis of Contract for Trading
Advisor Trainees, 41–42
systems (breakout variants), 72–79
examples illustrating, 74–79
true range. See average true range (N)or ATR
Turtlesafter Turtle program, 135–43, 167–71, 209–14.
See also specific Turtle names boring trading strategy, 103–-9
classroom training, 43–50
competition among, 100, 111, 11
8, 143
contract, 41–42
diverse personalities/backgrounds of,5–6, 31–36, 101–-2
downtime, 101–5
end of program, 129–34
essay questions for, 35–36
failures, 188–89
female, 101–-2.
See also Cheval, Lizgroup dynamic, 109–11
hiring process, 31–41
hiring strategy, 36
interview challenges, 37–41
key trait of, 6
mental toughness of, 187–88, 190
monies traded by. See allocation oftrade moniesnumber of, 99-–00
office environment, 100-–03, 106
origin of name, xiii-xiv, 193
original profit share deal, 7
original stake given to, 7
performance levels, 123–26, 217-–44
recognizing chance of lifetime, 41
recruitment ad, 1–-3
screening test for, 34–36
second-generation, 173–74.
See also Abraham, Salem
Trading Places and, 29–30, 32, 113, 135
true-false test for, 34–35
typical trading day, 105–-6
where they are now, 209–14
willingness to listen, 43
TurtleTrader.com, 215
Union League Club, 43–44
unit limits, 86
Vandergrift, Justin, xvii
volatility of market
assessing, for trades, 56, 58, 64
defined, 65
measuring. See average true range(N) or ATR
Volker, Paul, 24
Waksman, Sol, 123, 124, 146
Walsh, Mark J., 70, 99, 173, 215
Webb, Bob, 160–61
Websites, related, 197
Willis, Tom, 16–17, 18, 20, 44, 53, 100, 150, 187
Willis, Tom R., 48–49
Wood, Jon, 7
Wyatt, Lucy, 101–-2, 197-–01
Acknowledgments
“Do not speak to me of rules. This is war! This is not a game of cricket!”
Colonel Saito,
from the movie The Bridge on the River Kwai
Justin Vandergrift assisted in bringing the Turtle trading rules to life, and also developed many of the accompanying charts. Celia Straus served as editor extraordinaire for the life of the project. Justin and Celia’s value as sounding boards can’t be stated strongly enough. A special thanks goes out to Shaun Jordan for finding me “access” and to Art Collins for all of his invaluable insights. Sara Sia, Tricia Lucero, and Maria Scinto provided help along the way. The following people also made significant contributions that allowed this book to come to life: