Wrestling Old Man Market
Real world insight and best practices to institutional investing told through the experiences and wit of a former college wrestler and hedge fund manager.
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What is it then that gives many investors a genuine state of overconfidence? What is the reason behind their steadfast belief that they will not succumb to the common driving emotional pitfalls of fear and greed, and that they are part of the very select crowd of active portfolio managers that are able to consistently outperform their benchmark? In psychology, the condition is called “Illusory Superiority,” or simply the tendency of individuals to overestimate their abilities relative to their peers. It's a common occurrence that exists far beyond the world of investing. Be it in sports, politics, or even dating, overconfidence runs amuck in our society. Heck, it's probably the reason Las Vegas even exists, since most visitors honestly don't travel to the middle of the desert contemplating the possibility of having less cash in their pockets on their return flight. In their minds, too many people think, “That poor smuck may have lost all his money at the casino tables, but I'm too smart and too lucky for that to happen to me.” It seems crazy that anyone could really think that illogically, yet it's sadly commonplace. Perhaps overconfidence is simply a matter of being naive. Maybe inexperienced investors just have to fail at some point, or at many points, before they can recognize and give reverence to the complexity of financial markets. And, should they survive to play on, they are likely to be better ultimately for having learned the lesson. As I was told by an experienced PM when I joined the buy-side, “Investors and traders are like motorcyclists. There are those who have fallen and those that will.” Thus, during my years spent analyzing the pricing of stocks and the information influencing them and occurring numerous spills myself, I've increasingly gained respect for the market (or again “my opponent”) and its frequent unwillingness to behave as I think it should, particular in the short term. Another seasoned buy-side friend once told me that he pictures the market as an old wise man sitting in front of a fire, looking into your eyes as he swishes his glass of Cognac, anticipating your next mistake and rebuking your simplicity in thinking it should behave one way just because it is logical or has happened that way in the past. That brings up the possibility of pure happenstance. Is it possible that events or performances in the market are not logically connected, but happen largely by chance and cannot be counted on reoccurring in any pattern or with any frequency? Does this Old Man Market really have no rhythm or reason to his ways?
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About the Book
After Trip Rodgers wrestled his last college match, little did he know another opponent was waiting for him. “Wrestling Old Man Market” details this next adversary and the similar competitive mindset needed in the often-intense investing arena. In the book, Rodgers shares real-world insight and entertaining stories from two decades of institutional investing experience, both as an Equity Research Analyst at a major investment bank and as a Portfolio Manager a large hedge fund. “Wrestling Old Man Market” focuses not on the academic dogma of investing, but instead offers a practical acumen to everyday investing and running a portfolio. Key topics covered include dispelling the notion of a secret sauce, the basics of contrarian investing, recurring factors leading to significant changes in stock prices, and the due diligence process one should undergo in analyzing a potential new position or reviewing a portfolio. Later chapters cover important investing topics of timing, confidence, common sense, savviness, and coping with the stresses of the business. All in all, the book is ideal for serious investors and analysts searching for the everyday skills to tangle with Old Man Market.
About the Author
Trip Rodgers has learned the ins and outs of institutional investing through two decades of experience, both as a research analyst and as a portfolio manager. Yet, he argues the most valuable lessons he learned trace back to his upbringing around the sport of wrestling. Rodgers grew up in the rural farming town of Blackwell, Oklahoma. He started wrestling in the second grade and ultimately was recruited to wrestle for Cornell University, where he was a three-year starter for the school's prestigious Division I wrestling team.
Following his athletic career and schooling, he worked as a research associate for two regional investment banks and then as a lead research analyst in New York City for a global bulge bracket bank. He became a CFA charter holder in 2001.
In 2004, he accepted a position at a major hedge fund and transitioned into the role of Portfolio Manager, where he focused on the materials and industrial sectors. Rodgers left that firm in 2014 and has most recently helped grow his wife's yoga business (We Yogis) to multiple locations in Dallas. He and his wife are blessed with three children.