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on June 11, 2012
Before I get into my thoughts on Hedge Fund Market Wizards, I think sharing the author's own words will go a long way toward establishing expectations for the book as I've found that those few folks who have panned the series have only really done so because they went into reading the books with a mistaken view of what they would get.

"Readers who are looking for some secret formula that will provide them with an easy way to beat the markets are looking in the wrong place. Readers who are seeking to improve their trading abilities, however, should find much that is useful in the following interviews." (from the Preface)

And of course interviews is what the book is all about. There are 15 in this latest variation on the Market Wizards series, each with its own introduction and concluding summary of key takeaways. Again, we have a diverse collection of money managers represented. They are grouped in to "macro", "multistrategy", and "equity" categories. I wouldn't call this as broad a set of discreet categorizations as we saw in the earlier books, but this probably reflects the way trading and money management has evolved in the 20+ years since the first book came out.

I think those who have read one or more of the prior books will find some subtle differences in this new edition. It is clear Schwager is more confident in both his interviewing and his own views on trading and markets. There is more editorializing in this book than I remember from the others. At the same time, the author isn't shy at all about drilling down on subjects and pressing interviewees to get the most out of them. This adds to the quality of the end product.

I was actually somewhat surprised how into the book I got personally. As an experienced traders, I found a kind of affirmation from some of the interviews. There were also a few "I never really thought about it like that" moments to give me new things to ponder, which is a plus.

I think having a significant recent (financial crisis) event central to the interviews helps. It also creates the same kind of contextual linkage the Crash of 1987 had for the interviews in the first book. This common reference point for readers makes it easier to be engaged by the text. It also helps developing readers from an application perspective in terms of allowing readers to have "Oh, yeah. I see what he was doing there" type of realizations.

There are a couple of interviewees in this book who present a challenge to individual investors in that they operate in markets where no individual really can take part (there is plenty of good footnoting to support explanations and definitions of subjects discussed). Most of them, though, operate in ways largely applicable by individuals, and even those who don't still offer insights into how they are thinking about the strategies they are employing and the way they are positioning themselves in the market.

And really that's really the crux of what's on offer in Hedge Fund Market Wizards.

It's about hearing how successful traders think about risk, strategy, research, and everything else that goes into their efforts - getting inside their heads. There are a couple of more systematic traders in the group who don't share much in the way of specifics, but the rest (who I would largely describe as being discretionary types) seem to have no problem at all in talking pretty specifically about the kind of technical and/or fundamental cues they look for to find good trades. If you're after "I buy when the 15-day average crosses the 30-day" type of rules, you're not going to find any. Most of the gentlemen interviewed (it's all men in this one), though, are very open about the way they look for trades, manage positions, etc. For this reason, I believe there is a lot of value to be had here for new and developing traders.

Schwager ends the book with his own takeaways from all the interviews he's done through these books. Those 40 observations alone are worth getting a copy of Hedge Fund Market Wizards, especially knowing from whence they came. There's also a very good epilogue written by his son talking about his own introduction to the Market Wizards concepts and their presentation which is well worth reading.

The bottom line is I think this is a good read no matter where you are on the spectrum of market experience.
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on January 12, 2013
I have found over the years that Schwager's interview works are must-have resources in finance.

Time and again (and this one being no exception) Schwager has produced valuable works because of what he contributes through the questions he asks and how he presents the material. If you are interested in investing and want to get some inspirational insights from experienced veterans (and, trust me, you do), this book is worth more than you'll pay for it. -- Braden Copeland, Editor at Large, Stansberry Research
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on April 28, 2014
A really really interesting read. It doesn't appear to touch on the actual *strategies* used, at least, from a mathematical or materially useful standpoint.

However, it gives an excellent flavour for successful trading, and is a very fun read. I enjoyed it a lot.
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VINE VOICEon July 6, 2012
It has to be some pressure for Jack Schwager to try to write books that will meet the expectations of his readers after his classic master works in the Market Wizards series that continue to stay on the best seller lists. Most traders I know read the original Market Wizard book over and over until it literally fell apart and they had to get a new copy. Schwager's past books were an amazing success getting the world's greatest traders with the best trading returns and performances to allow an interview and then Schwager was able to really ask the right questions and get them to open up and explain why they are so successful.

This book is no different, this time around Jack Schwager was able to get the top hedge fund managers to grant him interviews and explain why they were at the very top of their games. I could hardly put this book down hanging on the words of these amazing traders. Reading this book for me as a trader was a delicious experience much like eating a Fillet Mignon is that is perfectly cooked and seasoned.

After the 200 plus trading books I have read I still consider Jack Schwagers Market Wizards Series the best of the best. Why? His trading books are not based on theories, opinions, predictions, or beliefs, he goes down a completely different path. His books are based on interviewing the very best traders in the world, the ones with the very best returns year after year, the millionaires, the traders that trade for a living. The new embodiment of the Hedge Fund Wizards book belongs right along side his others and gives the reader an up close look at how the world's best hedge fund managers were able to find and master a trading style that fit their personality and allowed them to beat the market and the vast majority of other hedge funds year after year. If you read this book carefully and pay attention you should find some trading principles that are gems that could revolutionize your trading. I know his books have done that for me. If other trading books are like letting you see a trader's trading plan then Schwagers books are like allowing the reader to see directly into the mind of the rich trader.

One Hedge fund manager even made a call during his interview saying that Apple stock was an amazing buy and that it would sky rocket based on earnings projections over the next few years with the new iPad added to its arsenal of products and that Research in Motion stock would collapse with all the companies terrible missteps it was doomed. Since the interview in 2011 Apple went on to almost double and Research in Motion lost over 80% of its book value. That was pretty amazing to make a call like that in a Wizard book and it was one of the best calls that could have been made. But more importantly the book shows the reader how to to think like a great hedge fund manager.

I would put this book on my top ten must read trading books.
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on January 4, 2013
I'm in the business, and have been following the hedge fund world, trading techniques, and most of the people who were interviewed for many years. It seems like Schwager is getting a little testy as he gets older, but he usually asks good questions and doesn't allow himself, or the reader, to be sidetracked. And doesn't allow the trader to duck the question. I think his footnote explanations of some of the terms are helpful to readers, also. I have already recommended the book to others.
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on July 11, 2012
I have been wanting to write a review of the new Market Wizards book for some time, but it took me a few weeks to slog through it in my spare time. I'll come right to the point: I think I got more out of this book than any of the prior Wizard books. All of them are good, starting with the first back in 1989 (side note: years ago, I worked for one of the Wizards in the original compilation...........err, don't ask).

I think the quality and sophistication of the information in the book is a cut above the others, probably because the individuals featured in this volume tend to be seasoned managers of very large funds. If you're a serious trader, I urge you to buy the book; I heavily highlighted my copy, and I've retyped some of the favorite segments below. The quotations are from different parts of the interview, so please read its paragraph as an independent snippet. The only organization I've provided is to precede each block of quotes with the name of the person who was being interviewed:

Colm O'Shea:

We recognized that we would underperform the bulls by quite a bit because in a bubble the true believers will always win. That's fine. you just need to make decent returns and wait until the market turns. Then you can make great returns. What I believe in is compounding and not losing money. We were quite happy to be part of the bubble, but to do it in positions that were highly liquid, so that we could exit the market quickly if we wanted to.

The great trades don't require predictions. The Soros trade of going short the pound in 1992 was based on something that had already happened - an ongoing deep recession that made it inevitable that the U.K. would not maintain the high interest rates required by remaining in the ERM. Afterward, everyone said, "That was incredibly obvious." Most of the great trades are incredibly obvious. It was the same in late 2007. In my mind, it was clear that the financial system was imploding and that most market participants hadn't noticed.

Never underestimate the ability of people to be optimistic and believe that everything is going to be okay. Historically, what is important to the market is not whether growth is good or bad, but whether it is getting better or worse.

Gold is the only commodity where the amount of supply is literally about 100 times as much as the amount physically used in any year....there is never any shortage of gold. So gold's value is entirely dependent on psychology or those fundamentals that drive psychology....I always found it ridiculous when other analysts would write lengthy reports on gold analyzing such things as annual production prospects and jewelry usage. Annual production and consumption of gold are always a tiny fraction of supply, maybe around 1 percent, so who cares how much they change. It has nothing to do with price.

Ray Dalio:

People think that a thing called correlation exists. That's wrong. What is really happening is that each market is behaving logically based on its own determinants, and as the nature of those determinants changes, what we call correlation changes.

One of the greatest problems that plagues mankind is that people are always saying, "I think this, and I think that," when there is a high probability they are wrong. After all, to the extend that there is strong disagreement about an issue, a lot of the people must be wrong. Yet most of them are totally confident they are right. How is that possible? Imagine how much better almost all decision making would be if people who disagree were less confident and more open to trying to get at the truth through thoughtful discourse."

Scott Ramsey:

The reality is that I'm not being paid to be right; I am being paid to make money. You have to have a degree of flexibility. Whenever I talk to investors, I make it clear to them that whatever I say today about the markets may or may not reflect the positions I have tomorrow or the next day. I recently reviewed a presentation I gave about six months ago, and I realized that everything I predicted didn't happen - and yet, I made money in almost every month since then.

The market doesnt' care if you lost money on a trade. It doesn't matter. Think about your next trade. You have to get past the idea that just because you lost money on a trade, it means you failed. Every trading decision you make it subject to some randomness. It doesn't matter whether you win or lose on any individual trade, as long as you get the process correct.

Michael Platt:

I always regarded financial markets as the ultimate puzzle because everyone is trying to solve it, and infinite wealth lies at the end of solving it. When you are solving any puzzle, you have to start off from the perspective, "What do I know for sure? Do I have any bedrock to start off my analysis?" It's shocking how little you know for certain in financial markets.

There are three things you need to make money in a market. You need a decent fundamental story, a good trend that looks like it will carry on, and the market handling news the way you think it should. Bull markets ignore any bad news, and any good news is the reason for a further rally.

Steve Clark:

Let me tell you the trouble with trading. There is no career in trading. You are only as good as your last trade, and that is it. You build nothing; you just trade. The day you stop trading, it's gone. So what you have spent doing for X hours every working day of your life has ended, and there is nothing left to show for it, except for money. You have to keep trading because you don't want to stop and look back. Because what have you done? You have built nothing. You have achieved nothing.

Nearly all successful traders I have known are one-trick ponies. They do one thing, and they do it very well. When they stray from that single focus, it often ends in disaster. In the hedge fund world, you will see traders who do one thing very well, make a lot of money at it, and then think, "This one thing is rather boring. I can do other things because I am a genius." So they start doing other things.

Really good traders are also capable of changing their mind in an instant. They can be dogmatic in their opinion and then immediately change it. If you can't do that, you will get caught in a position and be wiped out.
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on April 13, 2016
Good
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on June 22, 2014
This book in particular was extremely useful as it contrasted vastly different trading styles and philosophies from successful fund managers. I particularly enjoyed that not all all are Long or Long/Short Equity focused but also Global Macro, believe it gives the reader a good balance from which to take bits and pieces from each manager. I highly recommend this for anyone who's income is derived from Trading.
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on May 23, 2014
Love Schwagers look into what makes different trader/investors tick. It continues to prove that in order to be successful, you need to find something that works for you. It may be a patchwork of things that you pick up from other investors, but as long as it makes sense to you and works reasonably well and you are consistent, you should at least do okay.
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on November 29, 2012
I bought this book because I wanted insight into trading strategies used by hedge fund managers, and it more than delivered on that promise. Schwager is a gifted writer and interviewer and really brings out the best in his subjects.

After reading this, I immediately bought the other books in the Market Wizards series. I would highly recommend this to anyone interested in hedge funds or unconventional investment strategies.
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