Summary of Jack D. Schwager's Stock Market Wizards

By IRB Media

Please note: This is a companion version & not the original book.

Book Preview: #1 The futures market is a place where traders buy and sell standardized contracts for a commodity or a financial instrument. The essence of a futures market is in its name: trading involves a standardized contract for a commodity or a financial instrument for a future delivery date, as opposed to the present time.

#2 The futures markets offer tremendous leverage. Price movements in futures will closely parallel those in the corresponding cash markets. Because the majority of futures trading activity is concentrated in financial instruments, many futures traders are, in reality, traders in stocks, bonds, and currencies.

#3 The interbank currency market is a 24-hour market that follows the sun around the world. It is used by companies to hedge exchange risk, as it allows them to lock in a price in a foreign currency in order to assure a profit.

#4 I first met Marcus the day I joined Reynolds Securities as a futures research analyst. He had accepted a similar position at a competing firm, and I was assuming the position he had just vacated. Although I usually found my own analysis more persuasive when we disagreed, Marcus ultimately proved right about the direction of the market.

• Language: English
• Publisher: IRB Media
• Release date: Feb 21, 2022
• ISBN: 9781669350453

IRB Media

With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

Book preview

Insights on Jack D. Schwager's Stock Market Wizards

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 1

#1

The futures market is a place where traders buy and sell standardized contracts for a commodity or a financial instrument. The essence of a futures market is in its name: trading involves a standardized contract for a commodity or a financial instrument for a future delivery date, as opposed to the present time.

#2

The futures markets offer tremendous leverage. Price movements in futures will closely parallel those in the corresponding cash markets. Because the majority of futures trading activity is concentrated in financial instruments, many futures traders are, in reality, traders in stocks, bonds, and currencies.

#3

The interbank currency market is a 24-hour market that follows the sun around the world. It is used by companies to hedge exchange risk, as it allows them to lock in a price in a foreign currency in order to assure a profit.

#4

I first met Marcus the day I joined Reynolds Securities as a futures research analyst. He had accepted a similar position at a competing firm, and I was assuming the position he had just vacated. Although I usually found my own analysis more persuasive when we disagreed, Marcus ultimately proved right about the direction of the market.

#5

I was a scholar who graduated from Johns Hopkins in 1969. I had a Ph. D. fellowship in psychology at Clark University, and I expected to live the life of a professor. Through a mutual friend, I met this fellow named John, who claimed he could double my money every two weeks, like clockwork.

#6

My first trip to a brokerage house was very exciting. I got dressed up, putting on my only suit, and we went to the Reynolds Securities office in Baltimore. It was a big, posh office, suggesting a lot of old money.

#7

The first time I lost money on a trade was with John. We had been trading for about a year, and he came up with an idea that was supposed to save the day. We would buy August pork bellies and sell February pork bellies, because the spread was wider than the carrying charges.

#8

I was so wiped out after the trade that I told John that I thought I knew as much as he did, and that I was going to fire him.

#9

I had always been good at school, so I figured it was just a matter of getting the knack of it. I decided to cash in my father’s life insurance, which was worth $3,000. I bought three contracts of December corn in the summer of 1970, based on a Keltner recommendation.

#10

I began trading in 1970, when the grains began getting interesting again. I was a speculator, and I would be positioned for the blight this time.

#11

I borrowed $20,000 from my mother, added it to my $30,000, and bet everything on the blight. I bought the maximum number of corn and wheat contracts possible for $50,000 in margin. The markets initially held steady because there was enough fear of the blight to keep prices up.

#12

I was very upset when I found out that I couldn't get a good job. I decided to try and get a job at Reynolds Securities, which was a brokerage firm. I was able to get a better position there because I wanted it so much.

#13

I was forbidden from trading, but I decided I would not let that