VIC Trader - Wall Street Master's Methods [Review]

Principles, knowledge, development, statistical approach to risk analysis - these are the foundations on which Victor Sperandeo, a legendary investor who plays not only on Wall Street companies, but also goods and contracts. What is the secret of the success of a speculator and investor who earned on average 18% per year over 75 years? And above all: can he convey these skills? We check.

The book "The Trader Vic - Methods of the Wall Street Master" was recognized in the USA as the best book on investing in ... 1992. However, you cannot be discouraged by this, because it amazes with its topicality. There are, of course, elements that can be treated humorously today, such as trade difficulties caused by a fax failure (for younger readers: it is an e-mail printed on a piece of paper that could be sent with a device consisting of a printer and a telephone). Most of the rules can, and even worth, apply today. Victor Sperandeo's book shows that the universal stock exchanges that govern markets do not change.

The methods of the Wall Street master, that is ...

If you have read at least a few books on investing, you must have come across an excerpt about the fact that you need to simplify your methods as much as possible. Too many indicators obscure the situation, and the aggregated data overwhelm and, in fact, hinder making the right, i.e. the right, investment decision. Therefore, most authors argue that you need to observe two or three indicators and the "market environment" and trade based on the signals resulting from them. This is perfect news, especially for that part of novice investors who do not understand at least half of the technical analysis indicators and macroeconomic data at first. Great, right? One oscillator, trendline and we make money.

As usual, however, the devil is in the details. Sperandeo also argues that it focuses on simple methods. But when he starts explaining them, it takes him 80 pages and he admits that he described the topic quite generally. These simple methods emerge from the enormity of knowledge, which we read in the book at the beginning, when the author mentions that he has 1200 (yes: one thousand two hundred) books on investing. Drawing the trend line itself explains on a dozen or so pages, and yet it seems to each of us that this is the simplest thing that can be done.

"I know that I know nothing"

From the book we will learn a lot of details about the methods used by the author both when investing in shares, as well as stock and commodity indices. Both analytical tools and their own modifications are described. There are also errors, very accurately described, with the given level of losses and analysis of the causes that led to it. You can see that the author is an investor who constantly works on himself and admits that he likes it very much. He also argues that when work is pleasure and passion (and it is for him), everything comes much easier.

He also points out that nobody knows everything that affects prices. He cites soy as an example - buy or sell when the tide is low off Peru? But what does the coast of Peru have to do with the soybean market? You will learn from the book, especially in the first part, full of charts. As the author rightly points out - we often try to justify ourselves, but a good trader should not do it, but focus on numbers. The numbers don't lie.

Success is in your head

An interesting form is also the summaries of each chapter, in which in a short form we will find the most important thoughts developed on the previous pages. However, it is worth to read the entire book, especially the large section devoted to emotions. Ultimately, once we accumulate knowledge, it will be decided whether we will earn in the markets.

Victor Sperandeo admits that he trained 38 people, to whom he passed on all his knowledge and style of playing. Apart from him, only 5 of them survived on the market, and all of them were equally ambitious and talented. However, not everyone was able to be consistent, apply the rules and not succumb to emotions. The American would not be himself if he had not looked for an analogy. So he cited the example of weight loss - only 12 out of 100 people trying to lose weight can lose weight, despite the fact that there are hundreds of really great studies, books and programs created by professionals. And they are 100% effective programs. They just work, and the evidence is strong. So why can't people take advantage of them? Everything begins and ends in their head.