Ep. 1393: Jack Schwager and George Coyle Interview with Michael Covel on Trend Following Radio

My guests today are Jack Schwager and George Coyle. Jack Schwager is a renowned author, trader, and industry expert best known for the Market Wizards series, which profiles some of the world's greatest traders and investors. George Coyle is an investor, researcher, and writer who has spent years studying elite traders and investment performance across markets, with a focus on uncovering the principles behind exceptional success. The topic is their book Market Wizards: The Next Generation. In this episode of Trend Following Radio we discuss: Finding and profiling exceptional traders across generations Timeless trading principles and trader personality traits Verification and due diligence of trading performance Market evolution, adaptation, and competitive edge Unconventional trader journeys and paths to success Jump in! --- I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel https://twitter.com/covel Facebook: @trendfollowing https://www.facebook.com/trendfollowing/ LinkedIn: @covel https://linkedin.com/in/covel/ Instagram: @mikecovel https://www.instagram.com/mikecovel/ Hope you enjoy my never-ending podcast conversation!

• 0:00Speaker 00

  One of my very first early on interviews was with the author Jack Schwager. Jack is of course famous for the most popular market investing books that there are. The Market Wizards series. Today, Jack, along with his co-author George Coyle, bring a new Market Wizards book to the market. Market Wizards: The Next Generation. I enjoyed this conversation, a three-way conversation. And I do appreciate that someone like Jack, along with George, are going down the path of documenting greatness.

• 0:42Speaker 00

  Without any further delay, let's jump right into my conversation today with Jack Schwager and George Coyle.

• 1:03Speaker 00

  For both of you, a great place to start is the past and the future. And I think it's going to be easy for us to talk about the future because, you know, Jack, you proved you can go with these different generations, different decades, and you can find people that are having great success each period of time. But it got me thinking about too, like, how many traders probably existed back in these different centuries and decades that we never considered, that we don't even know about, right? Do you have any thoughts about that, Jack?

• 1:30Speaker 01

  Yeah, even now, we found these traders, but I'm sure there's quite a few others that nobody ever heard of. And in this book particularly, the crazy thing here is, the last book as well, I was thinking with all these giant quant shops and hundreds of PhDs, you know, trading, managing tens of billions of dollars, it's going to be pretty tough for the little guy to make money anymore. But I'm finding track records that are like, really even more amazing than the ones I found in the original Market Wizard book. There are two people in this book who started as prop traders, like one started as a prop trader, one is a solo trader. The solo trader particularly started with, I think, less than 5,000. And here Both of them got up to about a half a billion at this point.

• 2:13Speaker 01

  It's amazing and it's not a fluke because they've done it over a long period of time. It's incredible, but if they're there, I'm sure there are other people that we don't know about, that nobody knows about.

• 2:24Speaker 00

  One thing I was thinking about too, as we were getting on is the name Market Wizard. Now, if I just was sitting around as an author who has had to put books out and trying to figure out names and you're trying to like come up with something that would fit with what these books are about, I don't know if I would ever come across this combination. But the weird thing is the combination, because you've done it so long and they've been so successful, has come to mean something independent of the word combination. Does that make sense?

• 2:53Speaker 01

  Yeah, it does. I think when I used the title back in 88, when I was writing the book, the first one, I don't think it was a term. Maybe it was, I don't think so. First of all, a lot of people appropriate the name various things, some of which are marketing, none of which I appreciate. Not much I can do about it.

• 3:12Speaker 00

  All I ever say is I'm lucky that Jack did not use the term trend following before me. That's all I ever say.

• 3:19Speaker 01

  You got that one.

• 3:20Speaker 00

  You could have put five, six, 10 books out before everybody if you would have hindsight and everybody would have been done. And I know there's a little bit of backstory here. We don't have to go into it too much, but let's talk about the two man team here. My first thought before I knew anything was thinking, okay, maybe Jack is thinking about, how do I keep this great title and term going into the future, even if I don't feel like doing it? I don't necessarily know that that's what happened. Why don't you guys explain this combination?

• 3:49Speaker 01

  First of all, on that particular guest, you got it backwards. So now I didn't have that thought in the beginning, but once George and I, it's a bit of a story how we got together. This book would never have come to be because I wasn't planning to write it. If it wasn't for George's involvement, I don't think I would have written this book. So that's the first thing. But once we worked together and we worked together pretty closely, and it's not just we working together as partners and all that, but I think we also formed a friendship and certainly a trust. I mean, this business certainly has more to this share of not Unhonorable people, to put it mildly. And George is one of these individuals who is just dead honest. You could tell that when you work with somebody and I appreciate that. I try to be that way. I think I'm that way myself.

• 4:31Speaker 01

  And I really, really appreciate when somebody else is just brutally honest all the time and trustworthy and also skillful. So I told George that gee, at some point I'm gonna probably bow out of this thing. But I think I found somebody I'd feel comfortable turning it over to.

• 4:48Speaker 00

  I gotta say, George, before you jump in, my first thought was, since I've been talking to a lot of people for a long time, I was like, have I talked to George? Do I know George? Did I interview George? Like I said, I literally had to go to my own podcast and search my guests to make sure, hold on, have I talked to George? Because I actually talked to a guy with the last name Coyle recently that wrote the Talat Code book. So my mind was already going out there. George, talk about how you came to partner up with Jack on this title.

• 5:16Speaker 02

  I have a long version, my preface in the book, so I'll go with the high points here. But if you really want to get into the nitty gritty, it's in the book. But my background is more buy side, so working for hedge funds, CTA's, family offices. And that included being a trader, being a macro strategist, being a system designer. And along the way, I've always read the Market Wizard books, but I really started to study traders intently, mostly so that I could improve my own process. And along the way, I would read lots of books, lots of articles. And I said to myself, geez, I don't want to have to go dig all this stuff up and do it again. So I started to write research papers. And the first one was actually about Ed Sikoda, and I sent it to him and he published it on his website.

• 5:59Speaker 02

  And then I did one that was just about 25 traders over 100 years and the consistencies. And I did Soros and Druckenmiller and Renaissance Technologies. And then I did Michael Marcus. To back up a little bit, when I wrote the Soros paper, I managed to get it into the hands of some people who knew him from his early days. And they said, George, you really hit the nail on the head with this. And it was all based on public information. So I got to really like to hear firsthand accounts from people that could tell me your research was really good. It was spot on. So when I wrote the Marcus paper, Michael Marcus, who was the first chapter of The Market Wizard's first book. I asked someone that we knew in common, Ray Severt, to send it to Jack to get his input. And ultimately, that led to us working together and to where we are now.

• 6:43Speaker 02

  So that highlights backstory. But the writing, I guess, I have to call myself a writer now, not that I don't want to, but it wasn't like I approached it to be a writer initially. It was just gathering information to improve my trading process and writing papers.

• 6:58Speaker 00

  All three of us will then have an experience with Ed Sikota. I know Jack and I have probably talked about it in the past, and I've talked about it on the episode. But George, why don't you just real quick, and we'll get into more of the new book. Why don't you share your impressions and your understandings? Because you do get into it some, but I think you probably walked away with that same kind of, I don't know, it's almost like being in the matrix in some way.

• 7:20Speaker 02

  With Ed, you mean? Or I like Ed. I love talking to him, partially because you never know what the guy's going to say. I watch a lot of movies and I like when you don't know where the movie's going to go. And conversations with Ed, you never know where they're going to go. But initially, he was a little prickly. He doesn't like to answer questions directly, but I went through and read everything 20 years of his blog or website and managed to aggregate the wisdom. And I think to some degree, I earned his respect from doing that. And so that led to more conversations. But yeah, he's a fun guy to talk to. You got to know when to talk to him about trading and when not to, I guess. I assume, Michael, you've interacted with him enough. You know that to a degree.

• 7:57Speaker 00

  It's been a while, but yeah, we got close enough. He's just one of those guys. It's from a philosophy standpoint, an interesting way of looking at life standpoint. He will leave everyone with an impression. Some people might not like it. I did like it. He was an interesting guy.

• 8:12Speaker 02

  I quote him often to the point that sometimes I say, boy, I sound like an Ed Sikota parrot. But I do that mainly because most of what I've ever learned from him about markets is proven true. And I don't want to take credit for things that he said. As far as markets go, the guy, he knows almost everything, in my opinion. So he's a good guy to listen to.

• 8:32Speaker 00

  Jack, George has brought something up, but I think it's a good point. In terms of what's changed since you started this process going down the Wizards books? Because from my perspective, it does look like there's going to be some precepts, some principles that are going to always be there. Run your winners, cut your losers. Is that always going to be there? Are there other ideas that you think are always going to be there? Or are there some things that have changed so much that it's actually shocked you?

• 8:57Speaker 01

  Well, some things will always be there. Anything to do with risk management will always be there. That isn't going to change. A lot of principles, I think, are still basically true. Like, I've probably mentioned this in prior broadcasts with you. I've noticed, actually, my wife was the first one to point it out, that all the people I interview, or all the ones she's met, let's say, she said, you never noticed they're obsessive? And she's quite right. So this obsessiveness, in this case, obsessiveness with trading and was involved. And that leads to crazy hard work. That's been true for all the books, and I guess it will stay true. It takes that type of personality to excel. There is another one that I think will always be true is that people who succeed like this

• 9:42Speaker 01

  tend to be flexible. They could change their mind. They could admit they're wrong. Those things are timeless. And speaking of Escoda, I think paraphrasing him, I think, is lying about that when I asked him. What are the markets different now than they were 20 years ago? And this is, I asked him this like 35, 40 years ago. But his answer was something along the line, they're the same. They were always, they were changing, then they're still changing. So markets are always changing. And since the early books, the big changes, one I mentioned was the quant stuff, the tremendous increase in quant type of trading. And that is a function of the tremendous computerization, computer power. And that's just grown exponential. That whole thing is a dramatic change, which has led to all the quant.

• 10:23Speaker 01

  And the availability of all the data that just wasn't available or accessible before. So those things have all changed. And a lot of techniques, a lot of hedge funds that exist are using methodologies that couldn't have been done in the pre-computer age. So markets are quite different, but the traits that Succeed in markets other than purely systematic where personality and emotions don't matter. Those things don't change. They're pretty much the same traits that succeeded 40 years ago. I find that traders today as well.

• 10:55Speaker 00

  You know, that obsessive quality, though, George, and you can comment on this. Doesn't that apply to the three people on this call too? It doesn't apply to anybody that finds any success at anything if they're not obsessive. I mean, that they're just a lot lucky. You almost got to have obsessive built in no matter what, right? I mean, you're obsessive, aren't you, Jack? And I don't know, man.

• 11:14Speaker 01

  Obsessive, not as much as I used to be, but certainly in the early writing career and some of those. I think to do a book like, not getting away from Mark or Wizis, but like to do that first, Complete Guide to the Futures Market, which is an analytical book and almost 800 pages and done pre-PC. I think to do that requires an obsessive personality on the intense focus to do that manually.

• 11:38Speaker 00

  Pre-PC?

• 11:39Speaker 01

  Pre-PC, yeah.

• 11:40Speaker 00

  But you weren't using them a lot for that.

• 11:42Speaker 01

  I mean, they existed in a rudimentary sense. We're talking, I wrote it in 83.

• 11:46Speaker 00

  That's completely different than using Microsoft Word, track changes and all that kind of stuff.

• 11:50Speaker 01

  It's a completely different world. As I talk, we're really manual. And that goes for everything. That goes for the computations. I had a big section on regression analysis. I was literally doing multiple aggressions using an calculator.

• 12:02Speaker 00

  George, let me throw this at you. Talking about the guys that, for example, in the book, the new book, that you have found that can beat the market and beat the competition, not necessarily beat the competition, but survive alongside the competition. So you've got the citadels and Ken Griffiths out there. You've got the Jane Street out there, which I don't even know about. But then you both might call me a homer for this as I bring this guy up. But I can look at a guy like Paul Mulvaney, right? Who runs a relatively small amount of money compared to the larger funds out there, but does exceptionally well. And I'm curious, both of your perspectives on this, that if you're willing to say, I'm going to steer clear of these guys that are sloshing around 100 billion.

• 12:45Speaker 00

  And I'm going to keep myself at a certain level that there's opportunities when you start to think about the money size too, not just. The strategy.

• 12:52Speaker 02

  I mean, I think that a lot of success in markets comes down to being self-aware and clear on what your goals are and what you're trying to achieve. And Paul Mulvaney is a lot of fun to watch from afar. Vicarious living, right? That 60% drawdown, it's good lord, I couldn't handle that. But you listen to the guy talk, he was on your show, I think, two, three years ago, right? But he sounds like he just has ice running in his veins. But anyway, at a higher level, I think that he's very clear on what he's trying to do. And he's very consistent and persistent. And he's willing to ride through what it takes to achieve what he sets out to achieve.

• 13:30Speaker 02

  So I think people in all walks of market life can find success if they become clear on who they are, what their goals are, what they're trying to do, and then design a process to achieve it. And, you know, there are differences to size and what people can do. So we found one guy for this book. And I found these strategies over the years that are too sophisticated for retail, but too small for Citadel. And one of the guys in the upcoming book does a strategy where he is basically watching the tape, the news wire, all day. And when an article comes out about an ARB deal, he'll put it on before the ARBs get there. So he's basically beating the robots and beating the ARBs. And I just don't think that's something that the hundred billion dollar firms could or would want to do,

• 14:15Speaker 02

  because it won't move the needle and they don't want to dedicate the resources. So I think that the clarity of goals is important, but also there are always going to be opportunities in markets because of things like if Citadel puts three guys on this and codifies it, is it going to make enough to pay for the three guys that they're going to have to pay plus profit, et cetera, et cetera? So in my opinion, there's always going to be ways to make money in markets. And I think we've proven that true by finding the people from this book, despite the fact that competition and the number of hedge funds and everything has gotten harder, I would say.

• 14:47Speaker 00

  Okay, speak to finding people for this book. So there's the lucky, I'm counting, I think nine names, nine, nine, yeah. So why is it not 25? Why is it not 100? And were you dealing with 100, paring it down? How does this happen?

• 15:01Speaker 01

  Actually, there were more. We had too many. And so we had to divide. We had to say that we've got too many good people for this book. And it would just be too long to have one book with all the people we had. So we came to the decision pretty early on that we'd have to divide this in some way. And the vision we came up with was to make the first book solo traders and to make the second book hedge fund people. So there were more, there were more. We could have found more beyond that. It's just even at the stage we were in, we found we had too many for the first book and just decided to hold the hedge fund interviews we did for another volume and stop searching for people and just use the solo traders that we had at that point, which were more than enough for one book.

• 15:45Speaker 00

  How do you find people? And how do you vet people that they're not potentially not what they say they are?

• 15:52Speaker 01

  Oh, of course, people who not being what they say they are, that comes down to verification. And I'm going to turn that over to George because for this book, one of the big advantages I had working with George is that he took that all on in a very intensive way. And so that I'll let him talk about the verification. And as far as finding the people, always multiple ways. But one interesting thing that I've done from the beginning, which seems to work, is when you find a really good trader, say, hey, who else do you know? Who's this caliber who might be interested? And that gave us more names as well. And so word of mouth was a big deal.

• 16:28Speaker 02

  Yeah, the original intent wasn't to write a Market Wizards book. I actually approached Jack with an idea for a book that would focus on the early struggle of big name people in the business, like Warren Buffett, John Bogle. And the editor ultimately said, why don't you guys do a Wizards book? So we started to find people with the intent of focusing on early struggle. And then it morphed. So the way we found people wasn't as potentially linear as it might have been if we had set out and said, this is what we're going to do. From A to Z for whatever that's worth. But as far as verification, it's tough. I think in the old days, Jack would look at statements and he would look at potentially tax returns and things of that nature. And in a pre-AI world, it took some doing to

• 17:11Speaker 02

  forge those types of documents. And it still does, but it's gotten harder. So there were really no two verification processes that were exactly the same because no two traders were the same. And so we would look at things like what country did a trader live in, what markets did he trade, what brokers did he use? Were they US brokers, subject to US regulation? Were they outside the US and we didn't quite know the regulation? Did we know people who knew them? Because that can account for a lot. So ultimately, we designed about a 20-factor model that had various sub-factors that would subject these guys to behind the scenes. And to go through every facet of the model would be painful. We don't want to do it. But we would look at, obviously, statements. We would look at

• 17:55Speaker 02

  sometimes tax returns. Sometimes we would talk to their brokers with their permission and have the brokers verify that, yes, these are real trades and I watched this guy make this money. One time, we brought in an auditor because we were just out over our skis in terms of forensic accounting. And so those guys went through the material and said that it was good. So it varied from person to person, but it was very thorough, in my opinion, and we really walked away. You can never know 100% that anything is real, right? But I think we were 99.9% of the way there, just based on the process that we used.

• 18:29Speaker 00

  Jack, can you recall, I don't know if I've ever asked you this, can you recall any situations where you got scammed, where it made it to print, where you got scammed and it got close?

• 18:42Speaker 01

  Yeah, I did. And I hosted a difficulty of doing this. So in Stock Market Wizards, there was a trader, I can't remember the name now. But in any case, I was going off, there was a top five auditor for the fund, and I had all the statements, I had all the audited statements for the fund going all the way back. And so it seemed legitimate. That was number one. Number two, I had an industry professional. Investor who was actually the source of this name and always was Lance, what was the Lancer was name of the fund was Michael something. But anyway, what it turned out that what he was doing was buying some small cap stocks right at the end of the month and boosting their valuation.

• 19:24Speaker 01

  And made his tracker look a little lot better and it wasn't liquidatable. But in any case, I got a sense that there was something wrong so long time ago. So I think I where I've got the initial sense and I was in the middle of updating the book from hardback to paperback. Which was really important in that case because stock market wizards came out a few months of the peak of the market in March 2000. So the natural question was that I was doing this two years later after we had it. We're in the midst of a two year bear market and how did those guys do in this bear market that are all fall. So it was important to do that update and while I was working on this, I got a sense that I got it some inkling that there might be something wrong. And I met with the fund guy and he couldn't convince me.

• 20:08Speaker 01

  I'll say this, he brought a very expensive bottle of wine as a bribe, but I remember that part. But in any case, I told him, I'm not, you know, I took him out of the book. He was in the hardback, he wasn't in the paperback. So yeah, certainly happened.

• 20:22Speaker 00

  It's got to be tough. I dealt with this issue early on and I guess with the CTAs, it was nice because you could at least see the disclosure documents. I think as time goes on, it's a little harder because back in the day, if you were just dealing with the CFTC and CTA documents. We do a FOIA request or something, even if an outside perspective was somewhat, I say easy, but it wasn't hard to verify CTA. But things change.

• 20:47Speaker 02

  Yeah. One thing I might add, if you don't mind, is just, I think there are games that people can play that really only regulators can catch. And we learned some of these through the process of screening people. And we don't want to go into it because that would be giving a roadmap to potential criminals. But I think if anybody would bet their life on somebody else's returns being 100% accurate, like we say this in the book, that would be a mistake. Because there's always a chance that someone is willing to cheat or collude with someone else. But in our due diligence for this book, we got to a point where we felt very comfortable that was not the case. So I think probabilistically, we don't believe that any of that's going on. Is it possible? Is there some very remote chance? Sure. To your point, what happened with the earlier

• 21:32Speaker 02

  book? And Michael, it sounds like you've faced things like this before as well. But yeah, just for whatever that's worth.

• 21:38Speaker 00

  I like having this part of the conversation because if you're going to go out there, and I salute you guys for doing it, if you're going to go out there and you're going to raise awareness on people that are doing really well, I think the audience wants to know, hey, did these authors, did they get down and dirty? Did they really do the homework and get into it? And so I think it's nice for people to hear the process. You hinted at, hey, there was a very detailed process, but you're talking about IRS tax statements and talking to brokers and stuff. Getting under the hood like that, that adds a lot of credibility to the whole overall idea of what the story is.

• 22:08Speaker 02

  But I'll just add one more thing. You probably see some gray hairs here. I picked up a few more from the process because I've been reading the books for a lot of years. And I wanted to make sure, to the extent possible, that I didn't allow anybody who was potentially fraudulent into the book or the series. I took it very seriously and had some sort of stressful days and nights, as Jack will tell you. We had some intense conversations. So I definitely took it very, very seriously.

• 22:33Speaker 00

  Jack, I asked about ones that may have gotten into the book that didn't deserve it, a scammer perhaps. What about traders that made it into the book or made it into the series that had a strategy that was valid for a point in time? They were legit, but it just fell apart and it didn't continue.

• 22:54Speaker 01

  One problem is I didn't follow up on a lot of traders I interviewed. In some cases, I know they continued to do extremely well, but in some cases, I don't know what happened, particularly with some of these solo traders that were low profile. The only way they got their results was back then getting their statements, but I don't know what they did subsequently. So there's certainly quite possible that some of the people I interviewed stopped doing well, which is especially true of the, like I say, the solo traders where there's no public record to check on after the post-interview. Wasn't that a creative view at that point in time, I did get the statement. So I don't know in some cases that that would have occurred. I'm sure it must have occurred in some cases.

• 23:35Speaker 01

  And you have some well-known phenomenal traders were successful. As you can appreciate, you would know this best as well as I do. Cause that your all trend following book and everything else was focused on the turtles a lot. Dennis and Dennis is an example of someone who had one of the most spectacular achievements of trading going for literally, I think by $200 to 200 billion. But he is a difficult patch subsequently. And I don't know what his record is in past couple of decades even. But I do know that after spectacular success, he had some difficult periods. So whether that continued or not, I don't know.

• 24:13Speaker 00

  That's something really interesting that you bring up with Dennis is that his legacy was the fact that even if he did not do it himself consistently over a very long time. He influenced others, right? He influenced others and those others influenced others. And I know guys like Paul Mulvaney will say that influenced me. So it's like, that's the crazy thing about someone like Dennis is that just having such an influence on other people, even if he didn't keep doing it himself.

• 24:45Speaker 01

  Yeah, no, that's certainly true.

• 24:47Speaker 00

  Yeah.

• 24:47Speaker 01

  Anybody who did what he did, taking like as like literally a few hundred dollars and turning it to $200 billion. I don't care what else happens thereafter. It is an amazing achievement.

• 24:58Speaker 00

  I pulled up, Jack, I went and bought it off eBay a couple of years ago. His very first article, it was, I'd be saying 1976 New York Times Magazine. There's this big black and white picture of him on the floor with the mutton chops and everything. It's a great memento. I believe it's the only thing I've ever bought because that was so cool. It's like, oh, I could buy that off eBay for a hundred bucks or whatever, but it was cool.

• 25:20Speaker 02

  Was gonna do one of my papers on Dennis and I went and read everything I could from the Chicago Tribune and the Sun Times, got every article about Dennis and read pretty much every book you wrote. And it was interesting, you talked about Drexel, who he managed money. And I think it was maybe Larry Hyde at one point who said that whatever he was doing, his returns were not synonymous with trend following at the time. And the more research I did on Dennis, it was very interesting because he started as a market maker. And then he kind of morphed into trend to be able to know when to get in and out of positions or hold them because he became the biggest market maker. And then he shifted to trend following and he said, no filters, which the turtles took.

• 26:01Speaker 02

  But then that legend in the lore article in 2003 that he did for stocks and commodities, he said, oh, you should use volatility filters. And then throughout he was doing different things. So his approach changed so much over his career, which I always just thought was very interesting. And I think the best run was that turtle window. But if you run simulations on that model, specifically the 40 in 20 out or whatever, I know it was in your book, there was 55, I can't remember. But it really stopped working for a very long period of time, which sort of speaks in my mind to the fact that there is a golden window where people do their best work. And it's probably partially the markets, but it's their skill and it's their risk tolerance.

• 26:42Speaker 02

  And all of these things combined to allow them to create these just amazing returns that maybe aren't sustainable over a 50 year career.

• 26:50Speaker 00

  You mentioned getting gray hair from doing your due diligence. You're making me remember that in doing the turtle traitor book that I did, I lost hair for sure, dealing with that group. Okay, that was an ornery group. And I don't know why, I guess, I just theorized that they were so successful and the secrecy had worked. And then there's some guy, this guy Covel, who's nosing around and asking questions. And like, I'd have to go back and find all my paperwork somewhere. But the numbers of legal threats that came for doing the turtle trader book were off the hook. Now that was like, half of them were very happy, do an interview. The other half were like, get ready to go to court, boy. It was crazy town.

• 27:34Speaker 00

  I was like, what is going on here? And the thing was, I had people literally saying, I'm going to sue you if you put my name in the book. What the hell?

• 27:42Speaker 01

  I could actually emphasize completely on that because in New Market Wizards, I had a chapter on turtle traders, a few of them, and I interviewed a number of them for that particular chapter. But some of them, I think I used the analogy, it was like in those World War II movies, grand serial numbers, all we got out of them was every answer was like, I can't say, or something ambiguous. And I had to throw some of them completely out. It was a really difficult chore.

• 28:09Speaker 00

  At that time, during that window, Jerry Parker, who probably was the most successful of all the turtles, he didn't end up speaking a lot, but he does speak a lot now. And I got to say, Jerry is absolutely not anything like what I just described. He's one of the best interviewees. He's so open. It was an interesting experiment, to say the least. Let me ask you of the new book. I don't want to throw a name out there because I don't know, but who inspired, surprised you? And again, I want people to go read the book. I don't want to sit here and go through the whole table of contents. But is there a particular name or a story that you might want to share that really caused you to be like, wow, this takes me all the way back to my first Market Wizards book in terms of the feeling of surprise and excitement and just awe?

• 28:52Speaker 01

  I'll let George answer with his take on it. But I could say probably the one that maybe hit me the most out of all of them, they're all virtually all amazing in a wrong way. But there was one, and which is unique in another way. I've never done an anonymous chapter in a Market Wizard book. There was one case where it was a trader. I ended up not being able to use the interview for reasons which are completely tangential. We could get into if you wanted. But in any case, I just probably said to him, look, I love this two-page section of this interview. Could I use this on the trader exit? He agreed. And there was, I think, you know, it was a New Market Wizard. So it's literally a two-page section. But other than that, there was really never an anonymous chapter. And in this book, we hit somebody, it's one of the two people I talked about who took a

• 29:36Speaker 01

  tiny stake into Half Billion. And I just thought the story was just so good that it doesn't make a difference. Nobody knows this guy anyway. It's completely under the radar. He's a solo trader, not in the US even. Anyway, so that story, he was a musician because one of the Conservatories in his college years, that's what he was doing. He was about a year away from getting his degree there. And he was somebody who was completely, completely immersed in music and just had that super passion for the music side and skill, apparently, because he wouldn't be in that school if it wasn't for that. So, but then he gives it all up because he gets a passion for trading. But you don't think of a musician necessarily as somebody who's going to be the ideal, the incredibly successful trader.

• 30:22Speaker 01

  And then he goes on and he actually loses all his money three or four times. So not just once. So it's a bit like the Marcus interview and that was, so that's another surprising thing. Sticks through it, becomes extraordinarily successful. And then even when he knows better, does have a couple of instances in the career, he completely breaks his own rules and literally has a trade that cost him like a hundred million plus. And it was a trade that if he had let go, could have knocked him out of the business totally, even though he had made several hundred million of them. So it's just a phenomenal story. If I had to pick one, that's the one that was most impactful for me.

• 31:01Speaker 00

  George?

• 31:02Speaker 02

  I'll do three kind of shorter ones. One was Christian Kula Maggi. He was live streaming most of his journey for years and became sort of, he captured the hearts and minds of traders all over social media. And his is a pretty great story. He was very transparent about his drawdowns, but just the fact that in the first salvo, writing with Jack, I get to talk to this guy who's the legend that everybody wants to talk to was really cool. Another one was Rick Bendazian, who I talked about earlier. He's doing the arb stuff, but Rick is not a tech savvy guy for the most part. And yet he had found this way to beat the robots. And at an era where AI is taking over everything, I gotta say, there was some part of it that

• 31:44Speaker 02

  was like, yes, a human is still beating the robots. But outside of that, there were a lot of stories in there that really just made me challenge my assumptions and pre-existing beliefs about what was possible. So one of the guys, Kelvin Chu, made a bunch of money trading ag spreads. And after years. Years of seeing nobody really succeed trading ag futures, I was fairly convinced that nobody could do it well. And here he is crushing it, right? And there were a lot of other guys, multiple, that were shorting these parabolic shorts. So it's usually day trades, shorting small cap stocks. And that's something that I was always told, never day trade, don't trade small caps, don't short them,

• 32:24Speaker 02

  for God's sake, because that could be the end. So the fact that we found these guys that were doing things that arguably you quote unquote shouldn't do or be able to succeed doing, really made me realize that a lot of what I thought I believed or believed going into it wasn't accurate. And as annoying as it can be to challenge your belief system, I think ultimately it's really nice because it forces you to open your mind and think that other things are possible. So that's, I guess, those three are the big things that stood out to me.

• 32:52Speaker 01

  One of the traders made most of his money doing something not only that I would not advise against, but that I think 90% plus of the traders I've interviewed would advise against, and that is selling options, which is the opposite of the positive resimetry trades that most market wisdom traders use. But he did it in a way where he did control the risk. Even somebody might say, he's going to blow up eventually. Well, maybe, but we had the April tariff deal, the so-called liberation day, where the markets like tanked in four days an incredible amount. He had a short option position. He walked away with only losing a billion or so because he was really quick on getting out of it all.

• 33:36Speaker 01

  Very, on the first instance, he's pulled off this money machine out of selling options and yet having enough risk control in what he's doing to avoid getting wiped out on these sudden bear moves.

• 33:51Speaker 00

  Jack, over time, going back, your first book, the first one in this series, is like a Hall of Fame names. It's like all the names that people know to this day. It's amazing just to get all these names in one book. But were there names that got away from you? That you got close and they walked away? Or I'm sure there were some well-known names that you were this close. And then something happened.

• 34:15Speaker 01

  That wasn't this close, but the couple of big ones that I missed were Soros, who they tried a number of times. In my mind, Soros has to be like at the top of the list, or if not the top, very close to it in terms of discretionary traders, of great discretionary traders, not only of our lifespans, but maybe of all time. I never could get past this inner circle. I've tried a couple of times. I don't know why he never agreed, but like I said, I've never spoken. I even had Druckenmiller, who was in the second Market Wizards book, and Stanley, as you know, but the audience might not. For a good segment of the Soros's Quantum Fund, Druckenmiller was really the head manager. Soros was off in Eastern Europe and Russia

• 34:57Speaker 01

  tried to convert those countries to a capitalistic system and so forth. And that was his big focus. And he turned it over to Druckenmiller. And that's how I interviewed Druckenmiller and then asked him why he would ever agree. I don't know. And the other one was Jim Simons, who I guess maybe probably the best performing fund of all time has to be the classic, the original Renaissance Fund, which had enormous, extraordinary returns and extraordinary return to risk. Those numbers never exist side by side. I tried one for two books. The first one, he turned me down. The second one, he thought about it for two weeks and then turned me down. And I gotta say, I was almost a little bit relieved because I knew that was going to be a very difficult, very difficult interview because he was so secretive.

• 35:41Speaker 00

  By the way, that Simons in the Zuckerman book says that Rich Dennis was his influence.

• 35:46Speaker 01

  Zuckerman's book, by the way, is a really good book. He did extraordinarily well, getting so many people connected with Renaissance to talk. I'm amazed at the access he got.

• 35:56Speaker 00

  And you mentioned bringing up Soros. To this day, and obviously it's on the record, I'd look back at those Financial World magazines and every year, he was the number one guy just making a bloody fortune, 80s and 90s, before anybody was at his level. To this day, I can pick up the Market Wizards book, the first one, the second one, many of the others, the hedge fund market wizards. And I could read those and I could walk away with an understanding, an aha moment. If I pick up The Alchemy of Finance by Soros, I walk away with, I don't know what I walk away with.

• 36:26Speaker 01

  Yeah, he's not a great writer and that was another disappointment. I consider myself a writer, not a trader. I thought that if I had the chance, I could have done a good job getting his story better than he could because that was not his skill. But I agree, it's difficult to read some of his stuff. It certainly could be said better.

• 36:43Speaker 02

  For what it's worth, if I could jump in, one of the things I do well is gather information from a lot of different sources and find connecting the dots, essentially. That's the papers that I do. So I wrote a paper about Soros that relied on lots of articles from the New York Times and little excerpts from the Wizards books like Colomoché talking in Hedge Fund Market Wizards or Druckenmiller in New Market Wizards. And I also read two of Soros's biography, the authorized, the unauthorized. But anyway, I put all this together and wrote about a 30-page document that summarizes what I think is how Soros did what he did. And it made me of interest because I think it's the closest thing, obviously I'm tooting my own horn here.

• 37:23Speaker 00

  Where can we find it?

• 37:23Speaker 02

  By websites, triinv.com/Soros. But I can send it so you could post it. It's a free paper, but it really digs in on everything, like a longitudinal study from different people, from different sources across time, including Soros. And I think it paints a good picture. So maybe if you think it's interesting, we could talk about it another time.

• 37:44Speaker 01

  The Druckenmiller interview has a segment that talks a lot about Soros and everything I know about Soros really is in that Druckenmiller interview, which you get a good feel for what he did, at least in that small section.

• 37:55Speaker 00

  I got one final question. I think you could both give an answer to this one. We talk about adaption, people adapting, and you brought that up, Jack. If I look at something, if I'm the average person sitting out there, I want to get involved in trading, and I go look at some charts, for example, I'll just pick something and I don't know the exact numbers off the top of my head. But if I look at the Oracle chart, Larry Ellison's company for the last one year, it's one of the biggest companies in the world, and it's basically goes straight up in the fall and then comes straight down, right? This is a huge company that every retirement fund has a piece of. And you're saying to yourself, how can that happen? But that's not

• 38:35Speaker 00

  Really, and I'm gonna let you both go on this, that's not really the point. The point is, it did happen. This seems to always happen. So if this kind of thing can always happen, what do you do? How can you approach the world if something like this, which might be behind the scenes? And I don't know here, but it might not be so pretty. It might not be so nice to see something so big go up so fast, come down so fast. And you say to yourself, what's going on? But from a trading perspective, that's not really the way to look at it, is it?

• 39:07Speaker 01

  I think, I don't know if it's in one of my books or elsewhere, but basically the comment is the market can do anything. And that has to be in your mind all the time. You can't ever say, oh, this is impossible, or the stock's down 70%. It can't go down 90% or whatever it is. Anything is possible, really, anything. And anybody who's been watching markets for any length of time will have seen a number of things that would have seemed impossible, yet they happen and they happen all the time. So you have to approach your trading that you can never say this can't happen. Anything can happen. And your risk management has to be the tool that keeps you from getting killed when what seems impossible could happen.

• 39:47Speaker 02

  I was gonna start with, I think it was Bruce Covner who said, any market can do anything. But a lot of different traders over the years have said some version of that sentence, which is what Jack said. And I think once you start to believe that, you also come to believe that markets are ultimately governed by crowd psychology. They're not governed by fundamentals and anything can happen. And per all the research I've done, there's really only one way to deal with crowd psychology in the long haul with markets. And that's to use what I call the trading principles. There's three core principles that are inherent to the greatest traders of the past 100 years or so. One of them is respect the price action of the market, follow price trends. Michael, you're familiar with that one, right?

• 40:30Speaker 02

  The second is stick with your winning positions and the third is cut your losses. And I think those three principles are inherent in the success or the strategies or systems of successful traders for the past 100 years. So I would say use those, adopt that philosophy that anything can happen and use the principles to protect yourself against the bad anything happening.

• 40:54Speaker 00

  The book Market Wizards, The Next Generation, The World's Top Young Traders Reveal How They Beat the Market, that's a final little question there because for the Gen Z out there, the millennial, the Gen X that are hearing us talk, maybe they're saying, oh, you guys had a conversation talking about some older guys and this and that. But the average age of this book is something very different, right? It's a very young group.

• 41:19Speaker 01

  It is. And keep in mind, we're looking for people with records at least 10 years and optimally 15, 20 years. There's a limit to how young they could be, but these traders started very young in most cases. So they're either started trading right out of college, in some cases even when they were in their high school. The group is by far the youngest of any cohort, any market wizard.

• 41:43Speaker 00

  George, have you ever thought there?

• 41:44Speaker 02

  It's not your father's market wizard.

• 41:47Speaker 00

  Your father's market wizards books are generally timeless.

• 41:50Speaker 02

  I love all the books. I put myself in the camp of I have read my father's market wizards. Those are my market wizards. I guess I'm old enough. I am a father, so.

• 41:59Speaker 00

  And I think, Jack, that obviously was one of your desires early and George getting involved now is, look, markets change, strategies change, but I think the whole idea is people pick up one of these books and they walk away with a timeless perspective and they say, I can apply this to my life in some way, even if I can't become this guy. Because, look, there's only so many billionaires. But still, you walk away with a timeless precepts. And I think to some degree, if people are wise about this, that allows them to calm their mind a little bit. When you know what the lay of the landscape is, when you know what it looks like, you can say, oh, I don't want to do that much dedication. I'm not that obsessive. I want a different life. So I think it's nice that it gives people a look

• 42:42Speaker 00

  behind the curtain to say, what is this? And do I want this? In some ways, it's comforting.

• 42:48Speaker 02

  One of the things that I tried to do was incorporate all the wisdom that I've learned through my research before writing with Jack to highlight those points as far as trading. But we also did a lot of adding in the personality traits, or I did my part to. To add in the personality traits that are consistent across these wizards and others. And some of that self-awareness, clear goals, there's a list of them in the book. But I think that those, I guess I'll call them principles or traits, can be applied to success in a more general sense. I really believe that if people read it, it'll help them to think about trading, but it could also apply to other goals in life and how to achieve them.

• 43:27Speaker 00

  Jack, you got anything finally you want to add, anything that's stuck in your mind that I haven't brought up today that you want to share?

• 43:33Speaker 01

  No, you did a good job. Let me that pops into my mind on that score. I would add on this last point. Another interesting difference in this book is I think more than any other book, the number of the traders have reached a point where they're questioning, really, is this what I want to continue doing? They do think in some cases, I made all this money, what else do I really want to do for my life? And really, and it's a difficult, there's a struggle that goes on that hopefully is captured in the book and where it applies between these traders deciding. On one hand, if they stop trading, they're so good that they're literally walking away from making millions every year. But on the other hand, there's other things they want to do. That struggle and that thought process that you raised is visible in this book in a number of cases.

• 44:18Speaker 00

  Again, the book, Market Wizards, The Next Generation, The World's Top Young Traders, Reveal How They Beat the Market, Jack Schwager, George Coyle, guys, good stuff. If we can always have another conversation like this, I enjoy this, this is fun. Not a big plan here, just a nice chat. The book, Herrmann House, who I know well, coming soon. Where can people go? Where would you like to direct them? There's probably, I guess, at least two different websites here, or maybe with a combination website you're going to tell me about. But where would you like people to go to check you guys out or find out more?

• 44:48Speaker 02

  I have a link tree that sort of routes to multiple things, including the best website provided by the publisher to buy the book. To try to read it here would be very painful for everyone because it's a bit long, but I could share it, I could send it over, and then maybe you could link to it in the material. Or if you could find me on X, my handle is GFC4, and then I have a link tree link there that shows other papers I've written, but also the link to The new book and everything.

• 45:15Speaker 01

  And there is a link that George will provide where people who are pre-buying the book at this point, it's not due out until a month from now, but people getting the book now can get access to the first chapter and it's a preface and the first chapter is Kula Maji.

• 45:31Speaker 00

  Well, I always say too, I think for folks that have, hey, Jack, you fit this bill, for people that have been at the game for a long time, if they can't find you, Jack, if they can't find information about you, if they can't find your books, they probably should not be trying, meaning it's easy to find you. If I go to Amazon and I start looking around and poking around for stock market, futures market, whatever, if I don't find Jack, then something's messed up. But hey, guys, listen, I appreciate it. Nice chatting.

• 45:57Speaker 02

  Thank you, Michael. Thanks for having us.

• 45:59Speaker 01

  Talking to you again.

• 46:05Speaker 03

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