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In 2000, Hite chose to focus on his family office activities, which included proprietary trading and the funding of continued research and development in the field of systematic trading. Joined by former members of the original Mint team, Hite formed Hite Capital Management. Hite thinks that traders are not focused enough on protecting their downside.
The author describes his professional career in ’80s, founding the Mint fund and automating his trading ideas to eliminate human emotions from decision-making process. It worked because interest rates were at the highest levels back then, so only a small part of capital was used in riskier trading. The author describes his early childhood as desperate, miserable time with the disabilities he had. Larry was bad in school and in sports but he discovered that imagination was his strength, so he started to train his mind. The soon-to-be-80 man writes how there was a failure after failure in his youth and he often thought of suicide.
In that interview, Hite doesn’t talk much about his trading strategies, but mostly about risk. Hite’s approach is that as long as you take care of the risk, the profits will take care of themselves. As of 2010, Hite partnered with International Standard Asset Management to create a multi-strategy platform of liquid hedge fund strategies as well as a fund of managed accounts. The point that Hite is demonstrating here is that protection and loss mitigation are key in trading. Markets are going to punch you in the nose – and you have to be prepared to take that punch.
Larry has now written a book of his own, how he beats the odds in the markets and in life. I have listened to Hite in several podcasts and he always shares trend-following wisdom that has stood the test of time. He has made hundreds of millions of dollars during his trading career and was running the first hedge fund that had billion dollars of assets under management in 1990. Larry Hite is one of the most influential trend following traders of all time. He is known for his pioneering work in developing trend following systems, which he has taught and written about extensively.
Further reading
In the same year, Hite began adding systematic trading of equity markets to the Mint managed futures portfolio. “Wall Street preys on the desire of people to believe in stories the analysts tell about how they can predict the future,” Hite said. So how can you become a trend following winner like Hite?
He quickly realized there were not just good and bad bets, but also winning and losing bets. The first two describe odds and the other two show outcome, which can often be a random event and has nothing to do whether the bet was a good or a bad one. Larry Hite is one of the early pioneers of systematic trend-following trading. He has had great success and was featured in Jack Schwager’s first Market Wizards book in 1989. I have reviewed the Market Wizards series in my blog.
Other famous traders and their trading strategies
The lessons he learned after getting almost wiped out when already managing clients’ money are very thoughtful. The author has listed eight reasons why people lose money in the markets, leaving the eighth point to describe his own “almost fatal” experience. I recommend to read the book about alpari review’s life story to understand how the successes and failures shaped one of the most successful traders of all time. Hite got serious in trading and managing assets for other people. He raised quite a decent sum of money to trade and was doing pretty well.
However, he now understands how important failing and accepting it were for his success later. Larry was so used to failing that he didn’t stick to bad things and was always willing to walk away, which could be referred to as “cutting losses short” in trading. Nevertheless, Larry soon realized that he had to know what he needed and what he wanted in life. The introduction already includes much about the author.
- He became the chief investor and chairman of Metropolitan Ventures Partners , a position which he maintained to date.
- Well, those issues really didn’t cause his success, but knowing that Hite overcame many negatives is where your inspiration can start.
- Larry was so used to failing that he didn’t stick to bad things and was always willing to walk away, which could be referred to as “cutting losses short” in trading.
- Back in the 1970s, most of the guys I knew traded individual markets.
- Hite is widely recognized as a pioneer in the use of quantitative and systematic trading strategies.
Larry introduced the first principal fund-protected concept, which led to many successful products and financial engineering innovations in the market. He adopted systematic trading of equity to the portfolios he manages at Mint same year. Afterward, he maintained the position at Hite Capital LLC as managing director. Larry Hite is an entrepreneur, hedge fund manager and philanthropist. He co-founded Mint Investments in 1981, which became the largest commodity trading advisor in the world in terms of assets under management by 1990.
Best 25 Quotes by Larry Hite
Most of the guys that I knew who lost a lot of money actually tended to be more right than wrong. I believe that people put too much of a premium on being right. In some ways, it’s one of the drawbacks coinspot reviews for people who went to the best schools and always got straight As — they are too used to always being right. Everyone is happy to take lots of little winners — it makes them feel good.
Hite first read an article about commodity trading in Playboy. That spurred him to go see the local winner who was working as a commodities broker in the neighborhood. This broker explained that if Hite put down $2,000, he could make $1,000 a day. Hite is widely recognized as a pioneer in the use of quantitative and systematic trading strategies. His use of mathematics and computer algorithms in trading has become widely accepted and has revolutionized the way traders approach the markets.
You wouldn’t walk in a boxing ring blindfolded and with your hands down – and you shouldn’t execute a trade without strictly defining risk parameters and having an exit strategy. He attributes his success to being a staunch proponent of trend following, risk mitigation, and quickly getting over losses. Larry was very candid in this interview and you can see that even at 79 years young, and decades in the markets, he’s still very passionate about investing and the markets. He peppers his responses with his life stories to emphasize points, which makes for a very entertaining interview. All articles are for education purposes only, and not to be taken as advice to buy/sell.
Larry Hite – The Rule – Review
Now, in reading Trend Following, the do-it-yourselfers might argue that having a book that illustrates these same basic principles takes some of the fun out of it. He realized that since Treasury bills paid 3%, he could borrow the money so the cost for a futures contract would actually be just 2%. He also knew that the professor was addressing the risk of putting an entire investment in one commodity while it could actually be spread over many. “I would learn through my own testing and data analysis that over time, that diversified commodities futures are no riskier than stocks,” he explained.
While the speculator doesn’t have the product knowledge or speed, he does have the advantage of not having to play. The speculator can choose to only bet when the odds are in his favor. I have noticed that everyone who has ever tried to tell me that markets are efficient is poor. The insurance business provides a perfect analogy to trading. We end the article with some quotes from Larry Hite, all taken from Jack Schwager’s interview in the Market Wizards.
Larry Hite early life and career
His insights and wisdom will continue to be essential for traders who wish to succeed in the markets. He discussed his approach to trading, the markets, and the industry as a whole. HCM is dedicated to helping its clients reach their financial goals and objectives. Larry Hite advises young investors to focus on their education and to develop a strong understanding of the markets.
When their trades go against them, on the other hand, they hold on because they don’t want to accept being wrong. Many times, these trades come back and they are able to capture their small profit. To me, that kind of trading is a little bit like picking up nickels in front of a steamroller. aafx trading review Today, for all the different facets, I believe everyone has come to speak the same language. In my early days, there was only one guy I knew who seemed to have a winning track record year after year. Jack was also the only guy I knew who traded lots of different markets.
How Larry Hite Made Fortunes Through Innovative Investing
“I was left back. I had a learning disability when I was kid,” he said in an interview with Business Insider. “I was never a very good student and I’m blind in one eye. I had a lot of problems.” To say that Larry Hite is anything less than an investing legend would be a disservice. Every person is responsible for his or her financial decisions.
He discovered that his learning disability and klutziness came with a good sense of humor that made everyone laugh. His limitations also released his imagination about what was possible. He learned to “poker-face bluff my way through much of my early life,” which led to a brief career as a method actor. That experience helped him understand the different types of personalities he would work with in business.
After many years of searching and learning things the hard way, I evolved my own version of trend following. The idea made sense and I had some good examples to follow. Still, I wanted to prove to myself that it worked without betting real money.
His father, who had not graduated from high school, was a partner in a small bedspread maker. Hite was blind from birth in his left eye and had such poor vision in the right that he could barely make out the “E” at the top of the eyesight chart. His parents tried to correct it with glasses, but he could still barely read or write anything. When readers purchase services discussed on our site, we often earn affiliate commissions that support our work.
