Jack Schwager’s Market Wizards is a must read for any trader who wishes for success in trading. The premise is this: learn from the best in business which includes Ed Seykota, who realised over 250,000 percent return over 16 years. While any two traders in the book may differ drastically on implementation their visions, they all exhibit similar characteristics. Since its first publication in 1990, these lessons still relevant today. With minor alteration, I would suggest further that these lessons are applicable to life as well.
Pain is a great defence mechanism. It reminds us of lessons from past mistakes, alters our behaviours in the hope that we avoid getting hurt in the future. The same can be said about the financial markets. We wouldn’t expect to see investors pouring their hard-earned savings into Madoff-like investment funds in search of yield anytime soon. Nor, we will see investors rushing to buy complex real estate CDOs with “AAA” guaranteed by the big three. However, for the Millennials who observed their parents’ life savings evaporated during the GFC (not Geelong Football Club) the lessons they learnt are not necessarily the right ones.