Convinced that great trading was a skill that could be taught to anyone, he made a bet with his partner and ran a classified ad in the Wall Street Journal looking for novices to train. His recruits, later known as the Turtles, had anything but traditional Wall Street backgrounds; they included a professional blackjack player, a pianist, and a fantasy game designer. For two weeks, Dennis taught them his investment rules and philosophy, and set them loose to start trading, each with a million dollars of his money.
Even though they followed the same rules, there was a wide variation of in each individual’s performance. While the exact reason is unclear, Dennis was having some issues of his own. Many of the Turtles started to trade for clients on their own. There is a whole chapter on Jerry Parker, a successful Turtle who founded Chesapeake Capital and started managing money for clients. But not all Turtles were successful after the program.
An eye-opening story how the Turtles were taught to go against basic human nature, the flaws that we may not notice while making decisions but actually hurt our trading performance significantly. Not only is it well written and easy and exiting to read, but I learned a tremendous amount. For those who like inspiring books about successful trading, this one is as good as they come. But beyond the cheer leading, it examines the darker and more complex side of what winning means and how to keep what you’ve made for the long run. For these reasons this book is an easy pick for my list of top ten trading books of all time. In a bizarre twist to the story, in spite of how rigid the trading rules were, Dennis’s allocation of capital to the Turtles themselves was not uniform.
Book Review: The Complete TurtleTrader
He saw strategies, rules, odds, and numbers as objective and learnable. In the early 1980s, when Chicago’s reigning trader king, Richard Dennis, decided to conduct his real-life social experiment, Wall Street was heating up. The stock market was at the start of a huge bull market.
- They were still floating his boat as he was going to pieces.
- They also tried to trade on their own but failed to repeat the process that they had under Dennis.
- He knew enough to make his students do the right thing, but had a difficult time disciplining himself.”
- This is a complete and objective money making (and in some instances money losing) story with unexpected twists along the way.
- It is the only narrative account of trader Richard Dennis and his student traders nicknamed the ‘Turtles’.
Some have grown even wealthier than ever, and include some of today’s top hedge fund managers. Even today, long after the experiment was started in 1983, it is relevant. For simple starters, turtle Jerry Parker, turtle Paul Rabar and one of their teachers William Eckhardt manage a combined $3+ billion dollars in assets. This is a complete and objective money making (and in some instances money losing) story with unexpected twists along the way. This casting of a wide net was all part of Dennis’s plan to resolve his decade-long nature-versus-nurture debate with his partner William Eckhardt. Dennis believed that his ability to trade was not a natural gift.
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There were couple of guys from the group who tried to make easy money by selling Dennis’s rules. They also tried to trade on their own but failed to repeat the process that they had under Dennis. A second-generation Turtle Salem Abraham got inspired by meeting and talking to Jerry Parker, the original Turtle. Stories like the above are not uncommon – just ask the employees of Bear Stearns. These days buy and hold may as well be called buy and hope, which is definitely not a sound strategy.
Termination of the program
Lotus Development had released Lotus 1-2-3, and Microsoft had put their new word processing program (“Word”) on the market. President Reagan, much to the liberally minded Dennis’s chagrin, declared it “The Year of the Bible.” These rules worked—and still work today—for the Turtles, and any other investor with the desire and commitment to learn from one of the greatest investing stories of all time. If you want the chance for outsized returns trend following is where to be, but this ain’t clipping coupons.
Part one takes place during the experiment, when the Turtles are on the relatively level playing field designed by Richard Dennis. Part two take place after the experiment, when the Turtles have to face the real world as individuals and human nature reenters the picture. The ad invited anyone to join one of Chicago’s most successful trading firms, making “experience” optional. It was as if the Washington Redskins had advertised open positions regardless of age, weight, or football experience. Most beat-the-market books aren’t worth my shelf space.
The Complete TurtleTrader
By the time the experiment ended, Dennis had made a hundred million dollars from his Turtles and created one killer Wall Street legend. In The Complete TurtleTrader, Michael W. Covel tells their riveting story with the first ever on-the-record interviews with individual Turtles. He shows how Dennis’s rules worked—and can still work today—for any investor with the desire and commitment to learn from one of the greatest investing stories of all time. It’s the story of the famous experiment in 1983 about teaching a group of inexperienced people to become traders led by Richard Dennis and his partner William Eckhardt. Dennis believed in teaching someone to become a trader while Eckhardt had serious doubts. They made a bet to give it a try through the experiment and called it the “Turtles” after Dennis had seen how turtles were being grown in Singapore.
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The program was a cash cow, and in spite of the rivalries, overall they were happy with their jobs, and they did it well. More importantly, they were under contract – they couldn’t just up and go work for a competitor. Dennis could have retired himself and let the Turtles keep raking in the dough. But instead he cut them all loose, just as the interview in Market Wizards (1989) was giving them ultra high profiles and putting them into tremendous demand on Wall Street for their knowledge. Dennis’s secret was out and multiplying, but Dennis himself had nothing to show for it. TurtleTrader is the 80,000 word authoritative look at the Turtle complete story – all the good and all the bad are in it.
More detailed descriptions about the legendary ad, people who applied, what they had to do in order to get selected, what kind of traits Dennis and Eckhardt were expecting from the applicants. Many of them were shocked to see such an ad in newspapers in the first place. It sounded too good to be true to many and it did change the life of so many people.
Some of the true / false questions asked from the applicants are listed in the book and I tried to quickly answer them myself. The right answers aren’t included but hopefully I did good enough. One of the key factors here is why people with outstanding intelligence can be terrible traders. He describes the complete turtletrader review how Dennis interviewed and selected his students, details their education and experiences while working for him, and breaks down the Turtle system and rules in full. He reveals how they made astounding fortunes, and follows their lives from the original experiment to the present day.
All from multiple vantage points not a single source. Perhaps most stunning was that C&D Commodities was going to teach proprietary trading concepts. This was unheard of at the time (and still is today), since great moneymaking trading systems were always kept under lock and key.