Rating: - Great read and an interesting topic
I picked this book up on a recommendation from a friend. He told me the book was a great story, and assured me that while financial language and information is certainly present in the book, at no point does it overwhelm the reader. After reading it, he was spot on in his analysis.

I found the story of the Turtle traders to be fascinating. It's as much about the nature v. nurture argument as it is about finance. Trader Richard Dennis thought that successful financial traders could be taught, while his friend William Eckhardt thought some were born with the skills. The book proves that while nurture often trumps nature, everyone who was taught the rules of trading by Richard Dennis was not ultimately successful.

Covel's writing style is great. It's easy to read and entertaining while being informative; a tough task to achieve for many writers. Covel has clearly researched the details of the book extensively, and in my opinion, does an outstanding job of addressing all of the turtles instead of focusing on just one or two. I would recommend this book to anyone interested in general trading knowledge, or simply looking for a great read.

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Rating: - A very interesting story for anyone interest in markets, trading, and traders
Whenever we get involved in discussing the past we have to deal with different perspectives, balancing differing self-serving versions of the story and differences in emphasis. When the story happens over a period of years, it is also common for the people participating in different times to have different views of the events. Many times, the participants do not have as complete a view or understanding of the context of the events as we might first suspect. Neither does the historian or scholar, which is why multiple histories get written. We, as the consumers of those histories, as the saying goes, "pays our money and takes our chances". I seem to recall Hemingway complaining about a college course on his life saying that he didn't think he could pass the exam.

So it is with this book. The author of this book, Michael Covel, wasn't one of the Turtles and some say that he tells parts of the story incorrectly. I did some digging around the Internet and think he has done a very good job in providing the general public with the story of what happened. That this or that participant sees things differently, puts a different emphasis on the events and techniques described, or feels that his or her specific view of their part in the story differently is to be expected.

So what is this story all about? Let me start by saying that it is a really cool story. In 1983, Richard Dennis was a fabulously successful trader in Chicago. He and his partner, William Eckhardt disagreed over whether successful trading is something one can learn or does it take in-born talents. Dennis said that he was going to create traders like the turtle farm he had recently visited in Singapore raised their turtles. Hence the name turtletraders. He put some ads in some newspapers and chose among the many applications he received and began his experiment and needless to say he was successful or there would have been no reason to write this book. The turtles got to keep 15% of their trading profits (Dennis got the rest for putting up the money and the method). However, the turtles were also allowed to trade with their own money. The results varied somewhat, but those that followed the rules most closely did the best.

Covel provides us with a history of the experiment, a section on the turtletrader philosophy, the turtletrader rules (which are simple in recounting, but more complex in application), and the results including an appendix on "where are they now".

You could certainly trade on the rules as they are presented here, but you should really think them through, make sure you understand them, and follow them closely. Those turtles that varied from the system usually got into trouble. As they gained more experience and went off on their own, some have tweaked the original system and are doing well. In 1988, Dennis ended the program and that was that.

Whether or not you want to examine a successful trading method, this is an interesting business story and a real life version of that wonderful movie "Trading Places". The movie was in development before the experiment began and was released on 8 June 1983. The first ads to recruit the turtles began in fall 1983, so maybe the movie sparked the idea, but Dennis hasn't said it did. In any case, it was an interesting coincidence and says something about what was in the air about markets in the early 1980s. I think anyone who is interesting in markets and trading will enjoy the book, so I recommend it to everyone who has even a slight interest in them.

Reviewed by Craig Matteson, Ann Arbor, MI

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Rating: - Covel's true to life Pygmalion story is an inspiration to all of us
Aside from everything that all the other reviewers are mentioning...I'll add this.

If you're a trader or investor who ever loses money because of wrong decisions that are triggered by emotional responses to events in the markets, then you should read "The Complete Turtle Trader." It will educate and inspire you in a far more profound and visceral way than 99% of the trading psychology books that are on the market.

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Rating: - Covel Nails It
I'm a fan of Covel's "Trend Following", but his new book was much more interesting to me. I liked seeing the ups and downs. Overall, if you want the Turtle story and Turtle rules, "The Complete TurtleTrader" hits the mark.

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Rating: - Great read if you believe in inefficient markets
In this age of full disclosure, I should disclose the following information. The author of this book contacted me via email. He was impressed with the book review I did on Amazon for Mauboussin's book More Than You Know. The author wanted to know if I would review his book on Amazon if he sent me a free copy. I agreed to read and review his book. Of course, I never agreed on what type of review I would do.

Because I am an Index fund fan, I would have probably never bought this book. I believe in a buy-and-hold approach using low cost index funds in a very diversified portfolio. I do try to keep an open mind and learn new things from whatever book I read.

Covel's book has two elusive elements that always catch people's attention. The idea of being able to be the master trader who beats the market every year and accumulates great wealth is one element. The other element is the age old controversy of nature versus nurture. Do our genes determine our destiny or is it the external influences which determine it? The Turtle Traders are basically a spin of the great movie Trading Places with regards to the nature versus nurture controversy. With these two fertile elements, Covel spins them into a pretty entertaining story.

In a nutshell, Richard Dennis was a super trader who made $200 million in 1983. He and his partner then had the same argument as Mortimer and Randolph Duke....is it nature or nurture that makes great traders? Dennis ran an advertisement and selected 23 candidates out of thousands of applicants. After 2 weeks of training, the candidates were turned loose as traders. Supposedly, as a group, these candidates did very well as traders. The author says they made $100M for Dennis. The author details this story, and then provides a follow-up what happened to the 23 traders since the 1980's.

Since I am a realist, I always want to compare the performance of an investor back to an appropriate benchmark index. Unfortunately, Covel does not provide the annual returns for the key figure in the story, Dennis. On page 26, he does provide the monthly returns for Dennis for 1983 when he had a very bad year. Table 2.1 has an error in that the title suggests July 1982 to December 1983 monthly returns, yet the table lists monthly returns for January through December of 1983.

I cross-checked the calculations in table 2.1, and Dennis had a compounded annual return (CAGR) of -4.70% for the year 1983. The S&P 500 had a return of 22.50% in 1983 including reinvested dividends.

Table 2.1 gives the data source for Dennis's monthly returns as Barclays Performance Reporting. I went to this web site, and you can not access this historical performance unless you pay $6,000. I thought I could get the CAGR for Dennis's entire career from this web site, but I could not (since I don't want to pay $6,000). So much for the transparency of hedge funds using publicly available performance data.

Table 8.1 on page 130 also has an error. The chart title lists Dennis's monthly returns for January 1986 through December 1988......but the chart has monthly returns for September 1987 through June 1988. Using this monthly return data, I calculated that Dennis achieved a CAGR of -71.91% versus the S&P 500 total return of 16.61% for 1988. No wonder Dennis retired at this point!

I also took a look at the track record from 1988 to 2006 for Jerry Parker's Chesapeake Capital on page 200. By my calculations, Parker achieved a CAGR of 15.65%. The S&P 500 achieved a 12.16% CAGR with reinvested dividends over the same time period.

One of the main reasons ordinary investors stay away from hedge funds is the high fee structure. Many hedge funds have an annual expense ratio (ER) of 2% and the hedge fund takes 20% of the return above some benchmark (this is often called 2 and 20). I know very little about hedge funds, although I have read Lowenstein's book When Genius Failed: The Rise and Fall of Long Term Capital. One Google search I did said the benchmark is often the LIBOR lending rate.....and a typical LIBOR rate was 5%.

I don't know if Parker's returns shown on Table 8.1 are gross returns or net returns to investors. If I assume they are gross returns, I calculate the CAGR from 1988-2006 drops from 15.65% down to 13.64% factoring in the 2% ER. If I factor in both the 2% ER and the 20% of gains over an assumed 5% LIBOR benchmark, the CAGR drops down to 13.39%........just 1.23% higher than a low cost S&P 500 index fund.

I did find it interesting that some of the two week training given the Turtles focused on recognizing and overcoming some behavioral finance characteristics that we have as humans. I will have to give Dennis a lot of credit for incorporating behavioral finance principles into his training in the early 80's......since most of the academic research into behavioral finance wasn't started until the 1990's.

Even though I believe in generally efficient markets, I did enjoy reading Covel's tale. I am not aware of too many real word "Trading Places" type experiments like the 23 Turtle candidates in this story.

I still think the deck is stacked against you if you think you can be a trader and beat the market averages. Long Term Capital Management (LTCM) collapsed in 1998....and it had a world-class bond trader (Meriwether) and 2 Nobel Prize winners (Scholes and Merton) managing it. But if you still think you can beat the markets, you will probably enjoy this book.

For those of you who believe in the time-proven buy-and-hold approach using low cost index funds in a very diversified portfolio, I would suggest reading the books below.


Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing