Were you influenced by Michael? Oh, yes, very much. Michael taught me one thing that was incredibly important [pause].
That is a great lead-in. What is the punch line? He taught me that you
could make a million dollars. He showed me that if you applied yourself, great things
could happen. It is very easy to miss the point that you really can do it. He showed me that if you take a position and
use discipline, you can actually make it.
It sounds like he gave you confidence. Right. He also taught me one other thing that is absolutely critical: You have to be willing to make mistakes
regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making
your next best judgment, being wrong, making your third best judgment, and then doubling your money.
You are one of the most successful traders in the world. There are only a small number of traders of your caliber. What makes you different from the average guy? I'm not sure one can really define why some traders make it, while others do not. For myself, I can think of
two important elements. First, I have the ability to imagine configurations of the world different from today and really
believe it can happen. I can imagine that soybean prices can double or that the dollar can fall to 100 yen. Second, I
stay rational and disciplined under pressure.
Can trading skills be taught? Only to a limited extent. Over the years, I have tried to train perhaps thirty people, and only four or five of
those have turned out to be good traders.
What happened to the other twenty-five? They are out of the business—and it had nothing to do with intelligence.
When you compare the trainees that made it to the majority that did not, do you find any distinguishing traits? They are strong, independent, and contrary in the extreme. They are able to take positions others are
unwilling to take. They are disciplined enough to take the right size positions. A greedy trader always blows out. I
know some really inspired traders who never managed to keep the money they made. One trader at Commodities
Corporation—I don't want to mention his name—always struck me as a brilliant trader. The ideas he came up with
were wonderful; the markets he picked were often the right markets. Intellectually, he knew markets much better
than I did, yet I was keeping money, and he was not.
