Ken Heebner: Worth Hearing

analyst75 · 2015-09-10T19:23:09+00:00

INSIGHTS INTO THE MINDSET OF SUPER TRADERS Part 13 "Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight." - Jesse Livermore Name: Kenneth Heebner Nationality: American Education: MBA, Harvard University Occupation: Funds manager Career: Ken runs Capital Growth Management (CGM), Boston, Massachusetts, which was started in 1990, and part of his funds were performing very well in the year 2005; until recent huge drawdowns, which shouldve be controlled more effectively. Between the year 2000 and the year 2010, the fund enjoyed a cumulative growth of 290.2%, when compared to the S&P 500's 16.4%. Hes really a good speculator who respects his own hunches and stays away from what he doesnt understand. Insights: Ken was once ranked No. 1 stock picker in USA, but recently his predictions were less accurate and his funds also suffered. Nevertheless, he doesnt lose his love for the markets. Good traders remain passionate about trading in good and bad times. Theres one thing thats unsavory about Ken, especially when compared to Michael Platt. Ken isnt that good at risk management because the losses he suffers when hes wrong are always substantial. For example, CGM Focus lost 48 percent in 2008 as the global recession hurt commodity prices and a move into beaten-down financial stocks proved premature. You can agree that someone who losses less than 5% in bad trades is better than someone who loses 35% in bad trades. Why would Kens fund plunge from $10.3 billion to $1.9 billion? Its because he wasnt trading defensively. Its better to trade not to lose money, instead of trading to make money. Thats a defensive form of trading. Ken himself acknowledged that hed have done better if hed been more defensive. However, he always bounces back with time, which is the most important aspect of all the ability to survive losing streaks and recover losses. Based on his quote at the end of this piece, he doesnt go with the crowd (for they tend to be wrong always). Hes like a countertrend trader. Trading, for serious traders, should be a passion of a lifetime. At a relatively old age (71), Kens still passionate about trading. Unlike John Arnold, who retired from active trading at the age of 38, Ken doesnt show any intention to retire. Thats the kind of freedom trading offers: you choose when to retire. When youre really good, youll be a role model to some great traders. One great trader has other role models whore great traders as well; and the other way round. Conclusion: James Altucher says something which is true of trading. He says, with art, you have to deal with perfection. Nobody is perfect. For everyone who loves singing, there is always someone who sings better. For everyone who draws, there is always someone who draws better. You can't make art if you are trying to be perfect." This is also true of trading. This piece is ended with a quote from Ken: "I am completely outside the mainstream. I see the mainstream in the distance." Source: www.tallinex.com

Thread starter analyst75
Start date Sep 10, 2015

analyst75

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Ken Heebner: Worth Hearing

analyst75

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