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moneysense.ca, 9/07/09
Book Review: Inside the Mind of the Turtles
![[Front Cover of Inside the Mind of the Turtles]](http://www.canadiancapitalist.com/images/books/inside_the_mind_of_the_turtles.jpg)
Behold the turtle. He makes progress only when he sticks his neck out.
– James Bryant Conant
I didn’t have high expectations when I requested a review copy of this book by Curtis Faith because I hadn’t heard about the author or the reportedly famous group of traders called the Turtles. However, I was intrigued by the subtitle — How the World’s Best Traders Master Risk. Even though I’m not a trader and probably never will be, understanding risk is critical for long-term investors as well. In fact, investing is all about managing risk — returns are not under the control of investors but managing risk is.
The book starts off promisingly enough by breaking down the definition of risk into its components — Uncertainty, Consequences and Exposure and doing an admirable job of explaining each with examples and anecdotes. The author then lays out the seven rules for mastering risk and uncertainty:
- Overcome fear
- Remain flexible
- Take reasoned risks
- Prepare to be wrong
- Actively seek reality
- Respond quickly to change quickly
- Focus on decisions, not outcomes
The focus in the book is on how each rule applies to trading but it isn’t a stretch to see that these rules apply to investors as well.
Unfortunately, after the first few chapters, the author strays far from the script and takes a lengthy detour into how entrepreneurs and emergency room doctors handle risk, Mr. Faith’s opinions on education etc., liberally sprinkled with anecdotes from his experience as a trader and entrepreneur. Some may find the diversions pleasant but I found it hard to stay focused on the topic at hand.
Bottom line: This book is like the proverbial curate’s egg — very good in some parts and, though never bad, quite tedious at others. Published by McGraw-Hill, it is listed at $27.95 US and is available from Amazon.ca (non-affiliate link).
Other reviews: Michael James on Money liked parts of the book. Canadian Financial DIY gave it 3.5 stars out of 5 and is conducting a giveaway.
PS: This and That will return next week. Have a great weekend everyone!
moneysense.ca, 9/07/09
I read a similar book, The Complete TurtleTrader, by Michael Covel. I guess it’s written more from an objective point of view than Curtis Faith’s own. It was engaging enough (and short) that I got some similar ideas about investing in general. But the biggest lesson, for me, about this “system”, is to be dispassionate about the individual stocks, and if you want to trade, cut your losses quickly and don’t be afraid to take, at least partially, profits at a point you’ve set, even if the price is still going up.
Gaby Abed: I’ll see if The Complete Turtle Trader is available at our library. I checked out the reviews on Amazon after writing my post and comments indicated that the first Faith book is much better. I’ll put that on my list as well.
Hi fellow blogger here. Wondering, how do you go about “requesting” books from publishers. I’ve always wondered and have yet to be approached by a publisher with a van of free books
I have heard that Curtis Faith never really made it through the turtle trading program and he subsequently dropped out.
Turtle traders are trend followers who buy when markets go up and sell when markets go down. They diversify using non-correlated commodities such as metals, softs, stock indices, currencies and others.. It’s fun stuff..;-0
Dividend Growth: Regarding non-correlation, I’ve been fascinated by how two classes for example, one that averages 10% a year and one that averages 8%, can together, with rebalancing, average more than 10% a year…it’s almost, in the most nebulous sense, like free money. I’m gradually building up to a nicely non-correlated portfolio (I have time, I can manage the risk). But apparently, the Turtles looked down on day-trading. To the Turtles (and their trainers), only the price and the entry/exit rules mattered once a trend was detected. The goal was not to be right all the time, but when you’re right, be right really big.
Gaby how do you measure the correlation of your portfolio?