A well written review of Marek Fuch’s review.

A review of my new book forwarded to me today by a reader in France:

Turtle Trading Lessons From Michael Covel by Brett Steenbarger

Few legends in trading have been as enduring as that of the Turtles. The Turtles were traders in the 1980s trained in a trend-following methodology by Richard Dennis and William Eckhardt. The traders came from a variety of backgrounds; most had no background whatsoever in financial markets. Dennis championed the cause of nurture: he believed that great traders could be made. Eckhardt took the other side of the bet, and the Turtle experiment was on.

The Complete TurtleTrader, Michael Covel’s engaging and well-written account of the Turtles, covers not only the experiment, but a second generation of Turtles who were inspired by the Dennis/Eckhardt vision. One of the most interesting segments of the book covers Salem Abraham, who by chance met one of the original Turtles, took a 180 degree life turn, and began his own highly successful fund. It’s a powerful illustration that, though markets have changed since the 1980s, the dynamics of success have not.

Covel’s book reads more like a piece of financial journalism than I expected, and I mean that as a compliment. It is this well-rounded perspective that makes “The Complete Turtle Trader” complete and a definitive contribution to the trading literature. He has clearly researched his topic and sources his quotes. He also casts a critical eye on his subjects, investigating why some Turtles found long-term success and why others didn’t. A very enlightening portion of the book concerns Richard Dennis himself, the ending of the Turtle experiment, and the master’s departure from his own trading rules and principles.

For those wanting access to the Turtle philosophy and rules, they’re laid out clearly and unflinchingly. This is not a methodology for the faint-hearted, which is one reason so many Turtles and would-be Turtles have not stuck with it. Large drawdowns inevitably accompany the quest for large gains, and it’s those large gains that ultimately provide trend following with its edge. Investors who place their money in funds simply don’t want to see 20% of their money evaporate in a quarter. This inevitably leads money managers to refine (and ultimately eviscerate) the Turtle methodology.

Many of Covel’s themes will ring true to readers of this blog, including the role of deliberative practice in the acquisition of trading expertise and the importance of emotional resilience and entrepreneurial spirit in sustaining a trading career. My impression, reading the book, is that Covel is under no illusions: the methodology, which provides the statistical edge in trading, is necessary but not sufficient for success. After all, the Turtles started with the same methods; some made it, others didn’t. Covel’s segment discussing what separated a successful Turtle, Jerry Parker, from his less successful peers is perhaps the most insightful portion of the book.

Because Covel so clearly lays out these ingredients of success, his book is relevant not just to trend traders, but to anyone who aspires to greatness in the markets. The message is clear: to win, the odds must be in your favor, and you must have the fortitude to keep playing, remain consistent, and compound your edge. That’s a formula for success in any field of endeavor, which may be why the Turtle story finds universal appeal.

And, by the way, for readers who want to dig a little more into Turtle trading before purchasing Michael’s book, I recommend his website. There are quite a few resources there, including articles on money management and trend following.

Source: Brett Steenbarger’s Site

I believe NY Times and TheStreet.com reporter Marek Fuchs wrote a review of my new book without even reading it. I should note that in our email exchange below it was fairly predictable that Fuchs would go down the path of “Mike doesn’t have thick enough skin” as a defense for me questioning his competence. When you catch a reporter, a NY Times reporter, in the middle of sloppy reporting, its not surprising that when you press hard (which I did), he would come out arrogantly swinging back. Our email conversation:

Covel: Are you familiar with the factual errors in your review of my book?

Fuchs: I’ve written thousands of articles and have only made a handful of errors, but I am sorry I said you ran the experiment in my article (I didn’t make the sloppy mistake in my video). In quickly trying to edit out of a passively constructed “an experiment was run…” I slipped and I’m sorry. If there are any other errors, please let me know.

Covel: I have had feedback from a ton of people about your review. Intellectually honest criticism is one thing, I welcome it. But for a NY Times reporter to not read my book, and attempt to review it (while making factual errors), is frankly sad. One of my blog readers summed your effort up:

Reading the review of your book by Mr. Fuchs reminded of me an expression that goes something along the lines of ‘It is better to let the world think you are ignorant than to open your mouth and prove it’. Well, Mr. Fuchs may not have opened his mouth per se, but clearly his written word was more than sufficient to highlight his ignorance.

A follow-up from the same above reader:

When I sent my initial comment below I did not realize that Fuchs had posted the video review. Now that I have watched that review, I stand corrected of my original comment. Mr. Fuchs was in fact good enough to open his mouth to prove his ignorance. Criticism that is rooted in a difference of professional opinion or a failure to comprehend the subject matter (after making an effort to do so) is one thing. Criticism such as Fuchs’ which results from apparently nothing but an attempt to smear a book and its author without taking to the time to read the book much less obtaining at least a minimal understanding of the subject matter (i.e., the Turtles) is simply lazy and irresponsible. Apparently Fuchs doesn’t subscribe to the Jim Cramer mantra of ‘doing your homework’.

I would love to see you read my book one day.

Fuchs: Michael–Please don’t play that game. I read that book and can send you a bunch of letters too–including one from a former student of your’s–agreeing with my assesment [sic]. (He liked your class very much, by the way.) Again, if you think I made a specific error (other than the attribution of the contest in the aritlce [sic] and not the video–and I’m sorry for that) please let me know.

Covel: A former student? Huh? I am not Richard Dennis, I did not teach the Turtles. What are you talking about? Additionally:

1. You imply that the Turtles, the traders in my book, are slow and steady. Clearly, they were not. They were high risk and high reward.
2. You say that the Turtle students were already successful. My book does not say this, nor is this an accurate description of events. The Turtle story is about taking people who were not wildly successful already and making them successful.
3. You mockingly read a passage (with a smiling kid on your lap for good measure) from my book about a tortoise and hare. Problem? That story is not in my book. The word ‘hare’ is not in my book.
4. You don’t understand that the Turtle traders were not fundamental traders and mockingly refer to my book advocating the use of momentum strategies. No kidding! That is what the book is about. You say “No turtle I know is a momentum player.” That statement demonstrates no grasp about what the Turtle experiment even was. Here are some comparison reviews, not to say you needed to praise my book (I could care less), but to show that you did not read the book (1), (2), (3), & (4). Maybe you glanced at some pages in my book, but you don’t have the facts even remotely understood. You demonstrate that in your writing and video. As I said, sad reporting.

Fuchs: Michael: I’m glad you may have gotten some good reivews [sic]. Better reason, perhaps, to have a thicker skin on a bad one. Look: in my subjective opinion, I did not like the book and did not think it would help investors who read it–the lens through which I judge. I never said the Turtles were already sucessful [sic] on Wall Street, but that they had sucess [sic] in other areas. Since many on Wall Street–those I used to work with, those I write about–come from varied backgrounds, I think trumpeting the fact that these one time novices did well makes too much of this (or any other) method. Plenty–as I made clear–have come from other fields. That is important for readers to know. In terms of the introduction of the video, that was a wry take on the turtle reference–I trust viewers know that the children’s tale of the turtle and the hare preceded this book. And, look, laying out a “sound” and “easy to follow” system for trading certainly implies a steadiness–especially when drawing a comparison with the braying on cable television. Problem was, too much of the advice, in the end, takes the form of platitudes. This is dangerous when the aim is fairly aggressive trading. That’s what I read, that’s what I said and that’s why I don’t think this is a good book for investors. Look–I’ve gotten plenty of letters, including from those who say they were seminar students of yours, that they were disappointed in the book. I’ve also gotten letters that they loved the book and I am the dumbest thing since the Edsel. I side with the first and I’ll hazard a guess that you throw your hat in with the second.

Covel: I welcome bad reviews from people who have read the book. Intellectually honest debates are great. However, you still don’t have a clue what the book is even about and continue to misrepresent basic facts in it. Your email is further confirmation of that fact. Perhaps you were just lazy that day? No matter, it was an extremely weak effort for a NY Times reporter.

Another blogger posting about this review.

Jim Cramer received a gentle punch from me in the preface of my new book. And clearly, he must not be happy. One of his reporters, who is also a NY Times reporter as well, has written a review of my new book that appears to have been completed without even reading it. Why do I say that? In his review he says that “I” did the Turtle experiment. Brilliant attention to detail!

Here is the review from TheStreet.com’s Marek Fuchs (PDF).

The first paragraph of his review is an embarrassing admission that he NEVER read the book. However, it gets better. Fuchs also posted a VIDEO review of “The Complete TurtleTrader”.

My thoughts? In Fuchs two reviews there are some “odd” discrepancies and or outright falsehoods that make me wonder what about the intended purpose of his “review”:

1. Marek Fuchs implies that the Turtles, the traders in my book, are slow and steady. Clearly, they were not. They were high risk and high reward.
2. Marek Fuchs says that “Covel ran a contest of sorts”. Fuchs is nowhere near accurate there.
3. Marek Fuchs says that the Turtles were already successful. My book does not say this, nor is this an accurate description of events. The Turtle story is great because it essentially took people who were not wildly successful already and made them successful. Again, clearly Fuchs is just reading my cover jacket at best.
4. Marek Fuchs mockingly reads a passage (with a smiling kid on his lap for good measure) from my book about a tortoise and hare. Problem? That story is not in my book. The word hare is not in my book.
5. Marek Fuchs doesn’t understand that the Turtles were NOT fundamental traders and mockingly refers to my book advocating the use of momentum strategies. No kidding! THAT is what the book is about.

I must be making progress if Jim Cramer sends in the help to write an inept hit piece! As one of my readers wrote me:

Reading the review of your book by Mr. Fuchs reminded of me an expression that goes something along the lines of “….It is better to let the world think you are ignorant than to open your mouth and prove it…”. Well, Mr. Fuchs may not have opened his mouth per se, but clearly his written word was more than sufficient to highlight his ignorance. Congratulations on the new book. I will be ordering it from Amazon.com soon. Regards, Mike

A follow-up from the same above reader:

When I sent my initial comment below I did not realize that Fuchs had posted the video review. Now that I have watched that review, I stand corrected of my original comment. Mr. Fuchs was in fact good enough to open his mouth to prove his ignorance. Criticism that is rooted in a difference of professional opinion or a failure to comprehend the subject matter (after making an effort to do so) is one thing. Criticism such as Fuchs’ which results from apparently nothing but an attempt to smear a book and its author without taking to the time to read the book much less obtaining at least a minimal understanding of the subject matter (i.e., the Turtles) is simply lazy and irresponsible. Apparently Fuchs doesn’t subscribe to the Jim Cramer mantra of ‘doing your homework’.

My email exchange with Fuchs.

I received permission to post a recent Market Technicians Newsletter review of my new book. Here it is (PDF) by Ajay Jani.

Now that my book is out I am hearing from original Turtles about it. Another wrote me today:

“Nice book. Thanks. Sad ending. Although it’s still far from over.”

I have not named some of the Turtles that have been emailing me as their emails were personal notes. Additionally, now that my book is out two Turtles who were not interviewed have expressed interest in talking to me, Of course I will take that opportunity, but their feedback might have to wait for a future expanded edition!

Just finished radio interview with Chuck Jaffe of Market Watch. While he said he had read another book on the Turtles, he did offer that my book was at the head of the pack.

The following review appears in the Oct 2007 Market Technicians Association Newsletter. It is by Ajay Jani. You can find full review here. A screen shot:

Feedback from one Turtle on my new book:

Thanks, but you do not need to send me a copy. I’ve already bought the book and read most of it. Liked it. Congratulations on a job well done.

To the point! Another Turtle called me to say the book was spot on.

A review from Australia’s Your Trading Edge Magazine:

The legend of Richard Dennis’ bet with his friend and business partner William Eckhardt that trading could be taught to anyone is known to almost everyone involved in trading and investing. The trend following break out system taught to this mixed group of students forms the basis of the majority of trading styles, theories and methodologies around today. This group were referred to as the turtles after Dennis visited a turtle breeding farm in Singapore and allegedly made the comment to Eckhardt that he could ‘breed traders just like they breed turtles.’

The book is a fascinating insight into the turtle program and ‘system’, the developers of the training program (Dennis and Eckhardt), and a number of the original turtle students, both then and now. It is a great read for anyone enamoured by the turtle ‘myth’ and for all those with an interest in trading in general as it tells the ‘real stories’ rather than just the glossy good bits – a thoroughly good read.

A question from Hong Kong about my new book:

Dear Michael, I bought your book and noticed that Russell Sands was not included among the Turtles. I was wondering if there was a reason for this? I ask because I have always wondered about the relationship between Russell and Richard Dennis. I loved your book. While trend following is not my cup of tea, the insights you brought on the Turtle mindset was invaluable. Thanks for a great job. All the best, Ray

Before I could answer that Russell Sands is indeed in my book, Ray followed up:

Sorry on re-reading this I realize I was unclear. What I wanted to know was why Russell’s track record was not among those you published?

Sands was only with Dennis for a year, and I don’t have that one year record. In terms of the next 20 yrs he doesn’t have a continuous record. For the book, after the Turtle program ended, I aimed to publish those Turtles with a continuous track record. For trading during the Turtle program I published the records that could be found. There was some interesting discrepancies there.

A review of “The Complete TurtleTrader” in the September 2007 issue of SFO Magazine.