Wed, Oct 1, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Opalesque Book Review: Learning from losses rather than winnings

Thursday, September 12, 2013

amb
Brendan Moynihan
Benedicte Gravrand, Opalesque Geneva:

Nick Leeson of Barings Bank, Toshihide Iguchi of Daiwa Bank, Yasuo Haminaka (Mr. Cooper) of Sumitomo, John Rusnak of Allfirst Bank, Chen Juilin of China Aviation Oil Corporation, Jerome Kerviel of Société Générale, and more recently, Bruno Iksil of JP Morgan (the London Whale)… were all people who made large trading losses. What goes on in a trader’s mind when he is losing on his positions and yet sticks to them? What are the psychological flaws that lead to such great losses? To know more about it, you could read the second edition of "What I Learned Losing a Million Dollars" (Columbia Business School Publishing), which came out this year.

This book of less than 200 pages was first published 20 years ago, but the story is timeless. Written by Jim Paul (1943-2001), who had a 25-year career in the futures industry, and Brendan Moynihan, editor-at-large for Bloomberg News, the first half of the book tells the story of a trader who made it and lost it. The second half of the book examines the psychological factors behind trading loses, and offers some points to take home.

"The mistakes are timeless and so are the reasons for avoiding them," writes Moynihan. "The book simply identifies the mental processes, characteristics, and emotions – and the losses that accompany them."

The story of Jim Paul, who rose very fast ......................

To view our full article Click here

Banner

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Legal - Court throws out lawsuits related to Fannie Mae, Freddie Mac profits, Insider case by SEC is a step removed from Herbalife itself, SEC grants Citigroup waivers, easing hedge-fund curbs[more]

    Court throws out lawsuits related to Fannie Mae, Freddie Mac profits From WSJ.com: A group of Wall Street investors on Tuesday suffered a blow in their attempts to sue the federal government over their treatment of the shareholders of mortgage finance giants Fannie Mae and Freddie Mac af

  2. CalPERS’ move might alter hedge fund fees for good[more]

    Benedicte Gravrand, Opalesque Geneva: When CalPERS, the California Public Employees’ Retirement System, announced on September 15th that it was unwinding its hedge-fund portfolio, it was seen by many as is a significant blow to the sector’s appeal. The Fund is

  3. Opalesque Exclusive: Institutions eye private credit over traditional fixed income[more]

    Bailey McCann, Opalesque New York: Investing in private insurance, realty tax receivables, or investment-grade short-term accounts receivable may not spring to mind as a means of mitigating risk in a portfolio, but one firm, New York-based BroadRiver Asset Management is out to change all that. Th

  4. Short-term trading quant fund beats S&P since '09[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A relatively new multi-strategy, market-neutral quantitative hedge fund has managed to outperform the S&P500 and the HFRX Global since 2009. New Jersey-ba

  5. Unconstrained bond funds: Where hedge fund strategies meet mutual funds[more]

    From CNBC.com: For all the talk and buzz around indexes, or passive investing, the next big thing for bond mutual fund investors may be strategies that are the exact opposite. The rapid growth of "unconstrained bond funds" has been thrust into investor spotlight given last Friday's stunning news tha