In today’s episode, hosts Tim Bohen and Stephen Johnson are going to discuss something a little different: turtles.
No, Steady Trade Podcast didn’t take a turn toward Animal Planet. In the episode, Tim and Stephen are covering Michael Covel’s incredible book The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires. Throughout this two-part episode, they evaluate 8 excerpts from the book in hopes of ascertaining whether or not it’s possible for new traders to truly make millions.
TurtleTraders: the premise
This true-story book details how trader Richard Dennis, who made millions on Wall Street, believed that anyone could follow his trajectory to make their own fortune. He made a wager with a partner to prove it, and recruited novice traders via the Wall Street Journal to prove his point. As it turned out, by teaching his methods, a significant majority of the applicants became successful traders.
Throughout this and next week’s episodes, Tim and Stephen explore 8 key points from the book to determine if these principles are appropriate for you. Here are points 1-4:
- The gazelle and the lion. Every morning, a gazelle wakes up and knows it must run faster than a lion to survive. At the same time, every morning a lion has to wake up knowing that it must run faster than a gazelle to eat. As a trader, it doesn’t matter if you’re a gazelle or a lion: every morning when you wake up you have to start running.
This leads to the question: is trading teachable? While Tim and Stephen agree that the book makes a compelling case for that idea, they talk about how traders need to adopt the right mindset before they’ll ever gain success or learn as traders. They need to decide to be that hungry lion! An underlying fire and a belief that you can do it no matter what can make it a reality.
- The market cannot be beat. Traders and academics have argued about the ability to beat the market for years. However, can you win in the market if you have the right rules and attitude to play by?
One of the biggest reasons we trade stocks is that the efficient market theory does not apply to these stocks. Tim and Stephen discuss how as a penny stock trader you must think outside of the box and this can lead to potential winning against market odds.
- Trading is hard. As the book suggests, trading will take a toll on you. You must go through failure and go through mistakes to truly learn the most valuable lessons of trading. It is panicking and breaking that will help you learn the lessons. But by working through that experience it can be the best thing that happens to you.
Tim agrees that it’s best to take these painful losses early in your career; both he and Stephen offer insight on why it’s better to take these losses early than to build yourself up and lose it all. Losing can actually force you to become a better seller. It also makes you more cautious and aware of patterns, which can help you in the long term as a trader.
- How much of a role does luck play? As the book posits, none at all. Nobody stays in the game because of luck. It will run out sooner or later.
Tim and Stephen discuss this; while luck does exist, it can’t be counted on. You have to find your edge and stick to it. This leads to a discussion of how to find your edge by looking at your own progress and improving over time.
Moreover, Tim and Stephen agree that The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires is an invaluable resource that every new trader should read for insight and inspiration on their trading journey!
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