The Traders Journal

This is What Made a Top Hedge Manager So Successful

Gatis Roze

Gatis Roze

Author, Tensile Trading: The 10 Essential Stages of Stock Market Mastery

I just read The Buy Side, Turney Duff’s book about his years as the biggest and most successful healthcare hedge fund manager on Wall Street.  Let me say up front that I am not reviewing or endorsing the book or its content in any manner.  In fact, I’m certain that I’ll take heat from my trading buddies for even acknowledging this particular Wall Street insider’s sordid story.  Nevertheless, this book reinforced one very significant nugget of truth for me, and I’d like to focus on that alone.  

A simplistic encapsulation of this heavy weight confessional by an obviously talented wordsmith is that he is capable of telling an extremely personal story in a naked, undisguised manner far beyond what a normal self-deprecating person could ever do.  His introspection is courageously painful, and the authenticity, honesty and exactness of what he is willing to recognize in himself is, I believe, precisely the personal attribute that made him such an extraordinary trader.  

In this arena – and frankly, only in this arena – do I personally identify with Turney.  It punctuates the point I’ve tried to make in this blog for years.  The unique ability to be brutally honest about yourself and about the markets you trade is difficult and rare, but it empowers you as an investor as few things can.  My thesis is supported by the mere fact that Turney lives such a dysfunctional and decadent lifestyle after the market closes, yet during market hours he sees things clearly and profits from that clarity.  The importance of brutal honesty as it relates to the investor self has been the overriding message in many of my blogs.  This core belief emanates from my own experience and growth as a trader, and it is one of the sermons I preach in teaching my seminars.  Failing to achieve brutal honesty about your own investor self is the single largest impediment to producing consistent profitability in the stock markets.

Turney alluded to this in his book a number of times.  He talks about being able to remain unemotional and detached, thereby seeing the markets and his trades for what they actually were – not seeing them filtered through some wishful personal lenses.  His writings in the book reinforce that skill.  He freely admits that he does not have the Ivy League pedigree or intellectual horsepower of his Wall Street colleagues.  But the fact is that he’s the one who actually excels in trading and produces the extraordinary profits.  

This is precisely my point.  It’s not the brains, the scholastic lineage or proprietary computer models that propelled his success.  It is simply his unique ability for perceptual candor that allowed him to remain unemotional in seeing the markets for what they were and pulling the trigger without hesitation.  Turney figures out what truly matters.  That singular ability allowed him to manage a ten-figure hedge fund and produce spectacular profits.  It can be that straightforward, but so few investors ever figure it out!  

The vast majority of investors are naturally hard-wired to filter stock market signals in subjective and biased ways that actually work against them in trading the markets.  I won’t lie and tell you that it was easy to revise my own hardwired tendencies, but I did so over time and with a focused determination.  It has had a profound impact on my investing.  The bottom line is that people like Turney are both blessed and cursed with an innate perceptional wiring that they can use to excel in trading the markets.  But as the book reveals, this may come at a cost that leads them to fail in their personal life.  It takes one skill to be able to actually see reality and truth.  It takes another skill to behave in a manner by which you are able to profit from that clarity and vision. 

Trade well; trade with discipline!
-- Gatis Roze  

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Gatis Roze
About the author: , MBA, CMT, is a veteran full-time stock market investor who has traded his own account since 1989 unburdened by the distraction of clients. He holds an MBA from the Stanford Graduate School of Business, is a past president of the Technical Securities Analysts Association (TSAA), and is a Chartered Market Technician (CMT). After several successful entrepreneurial business ventures, Gatis retired in his early 40s to focus on investing in the financial markets. With consistent success as a stock market trader, he began teaching investments at the post-college level in 2000 and continues to do so today. Learn More