Thu, Nov 26, 2015
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

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. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  2. Investing - BlackRock targets ETF investors with flexible currency hedging, Nelson Peltz bets on General Electric Company and Mondelez International, Apple plummets to 4th place among hedge holdings, from No. 1, Top Q3 equity purchases and sales of top 50 hedge funds[more]

    BlackRock targets ETF investors with flexible currency hedging From BlackRock Inc., the world’s largest asset manager, is changing course on exchange-traded funds that protect against currency volatility. After stressing the easy switch between hedged and unhedged ET

  3. BlackRock is shutting down its Global Ascent macro fund[more]

    Komfie Manalo, Opalesque Asia: BlackRock, the world’s largest asset manager, has announced plans to shut down a macro fund, Global Ascent Fund, because of "headwinds facing the industry". The hedge fund, which makes bets on stock, bond and currency markets, will return money to investors. Ac

  4. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the

  5. Opalesque Roundtable: Family offices flock to co-investment[more]

    Bailey McCann, Opalesque New York: Co-investments have been a hot topic for pension funds in recent years, as they try to move away from high fees and improve transparency. But now, family offices are more readily getting into the mix and establishing in-house deal teams, according to the delega