Mon, Mar 2, 2015
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

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. Investing - Seth Klarman of Baupost outlines his investment process as major stock market indices are stretched, Myriad hedge fund sold bulk of its Alibaba stake last year[more]

    Seth Klarman of Baupost outlines his investment process as major stock market indices are stretched From Valuewalk.com: As hedge fund manager Seth Klarman, leader of the $28 billion Baupost Group, reviews 2014 performance and considers investors gained near 7 percent on the year, he cons

  2. Adamas Asset Management and Ping An Insurance to co-manage $500m debt fund[more]

    Komfie Manalo, Opalesque Asia: Hong Kong-based Adamas Asset Management and Ping An Insurance Group, one of China’s largest financial institutions, have finalized a memorandum of und

  3. Opalesque Exclusive: dbSelect’s top ten FX strategies average almost 10% in January[more]

    Benedicte Gravrand, Opalesque Geneva: In one of Deutsche Asset & Wealth Management (AWM)’s hedge fund platforms, called dbSelect, a number of FX Strategies did very well in January. dbSelect is a managed investment platform for unf

  4. Opalesque Exclusive: SEC’s Mark J. Flannery warns hedge funds against valuation misconduct[more]

    Komfie Manalo, Opalesque Asia: Securities and Exchange Commission chief economist and director of Division of Economic and Risk Analysis (DERA) Mark J. Flannery has warned of the risks posed by market misconduct, particularly in the true valuation of assets by hedge fund managers. In his

  5. Dymon Asia's $3bn macro hedge fund lost 10.45% in January[more]

    From Reuters.com: Dymon Asia's $3.1 billion macro hedge fund lost 10.45 percent in January, performance data seen by Reuters showed, a month where many peers lost heavily after a surprise rise in the Swiss franc. Singapore-based Dymon, set up by Danny Yong, a former founding partner and chie