Curtis Faith’s new book: Inside the Mind of the Turtles is primarily about risk and how traders should approach it. But it is also about Faith’s life, his background, successes, failures, and the many lessons learned as a trader and an entrepreneur.
The book starts with a gut wrenching decision that he had to make when a friend was thrown overboard from their sailboat. In a split second, the situation required him to analyze the risks of each option and to make the right choice between going back to try to help his friend in extreme weather or going for shore to get help.
Risk, according to Faith involves three elements: uncertainty, consequences and exposure. Without all three, you really don’t have ‘risk’. After defining it, he dedicates a chapter each to the seven proper approaches to managing and profiting from risk:
- Overcome Fear
- Remain Flexible
- Take Reasoned Risk
- Prepare to be Wrong
- Actively Seek Reality
- Respond Quickly to Change
- Focus on Decisions, not Outcomes
Most of those are self-explanatory so I’ll limit myself to detailing just the ones that aren’t. By “Actively Seek Reality” Faith is referring to having the most accurate perception of reality in order to be able to take advantage of opportunities. There is a difference between reality and our perceptions of it. So it is a constant struggle to not only untangle any misperceptions that we have, but also to be cognizant of how others are approaching the same set of variables and how the interplay of those two things presents opportunity or danger. Faith uses a business management analogy to expound this concept but I wish he had used an example from trading.
And by “Focus on Decisions, not Outcomes”, Faith means that traders are better served by paying more attention to the process of a trade rather than whether it was profitable or not. We all know that being right and making money are two separate things. So it is possible to make a poor decision, and make money. It is extremely important to be aware of this because if it becomes a pattern, it can be devastating.
There is a lot more of Faith in this book (than his first). He mentions the origins of his own interest in computer programming, his first ‘big break’ with Rotchie Barker (his trader mentor), why he dropped out of college, and what he did after he left trading behind. The book is peppered with personal anecdotes that either directly related to trading or are used as analogies to demonstrate a principle. In the last section of the book, Faith outlines his more general ideas, getting into philosophical on education, political views on government, society, management practices within corporations, etc.
You will be disappointed if you were expecting more of Way of the Turtle. But if you’re interested in a book that explores the psychological aspects behind the decision making process of trading, then you’ll enjoy Faith’s second book.
If you haven’t already, click to read my review of Faith’s first book, Way of the Turtle. That book is about the story of how Faith joined the small club of ‘turtles’ and how they made their millions.
Enjoyed this? Don't miss the next one, grab the feed or