Wednesday, January 15, 2014

Gartman on importance of money and risk management in trading

I’m good at trading and I’m wrong a lot according to my wife.

When we got married, we sat down the first year and she said you know this is really very sad. You had a good year at trading. You made us a very nice living this year but Dennis you were wrong 53% of the time this year. I thought this was terribly harsh. You couldn’t even beat a coin toss. I got out of it by saying, Sweetheart I’m so in love with you that it’s colored my ability to think. She bought it. I got another year.

We sat down the second year. She said, my wife the accountant, one plus two equals three. She said this is really very sad. You made more money trading this year than you made the previous year. But this year you were wrong 57% of the time. And people pay you for your ideas. And I’m standing by the notion last year that I told you. You can’t even beat a coin toss. You need to do better. Sweetheart I’m trying.

Third year we sat down. My wife, the accountant, one plus two equals three. She said this is sad. You made more money than you made the previous two years. That’s lovely. I want to stay with you. But Dennis, you were wrong 68% of the time this year. Almost 7 out of 10 of your trades lost money. You have got to do better. I told her Laura I’m trying. I’m gonna try.

Fourth year we sat down. My wife, the accountant, one plus two equals three. She said, you know, I get it now. You had the best year you ever had. Made more money this year then you made the previous three years. That’s lovely. This year you were wrong 81% of the time. I think if you can just be wrong 95% of the time. We’re gonna get stinkin’ rich.

I think I can do it. I think I have it in my grasp to be wrong.


via http://www.thecrosshairstrader.com/2013/11/dennis-gartman-on-becoming-stinkin-rich-by-being-wrong