BOOK REVIEW – The Complete TurtleTrader: The Legend, the Lessons, the Results. By Michael W. Covel
Reviewed by Dr. Jonathan Dolhenty
If readers want to learn some practical principles about financial investing, Michael Covel’s new book, The Complete TurtleTrader, will probably provide them to most readers. This is an interesting guidebook to tactics and strategies which should raise anyone’s ability to trade in the marketplace. Since I am not in the financial markets anymore and have no personal need of such information, my attention was drawn to an underlying issue that Covel presents and discusses because it was at the heart of the TurtleTrader phenomenon. This issue is an old one; it has been around and discussed for centuries; it has never been adequately resolved to everyone’s satisfaction. The issue is that of “Nature” versus “Nurture.”
According to Covel, Wall Street trader Richard Dennis engaged in an argument (friendly, of course) with fellow trader William Eckhardt about whether trading ability was “innate” or could be taught. Dennis believed that the principles of investing could be taught to anyone. Eckhardt disagreed, believing that the facility for successful trading was “inborn.” Was it, in other words, a matter of “Nature” or “Nurture” when it came to successful trading in the financial markets? Biology or society? Genetics or environment? Heredity or culture? The argument can be defined in a number of ways and has been the subject of intense investigation — philosophically, for ages, and scientifically, for at least a century — with no definitive answer in sight. Probably, a more realistic approach would be to view the matter as along a spectrum with nature at one end and nurture at the other. Where, then, does the “truth” lie along that spectrum? In the middle? More toward the “nature” end? Or toward the “nurture” end?
It would seem, if I correctly understand the gist of this “experiment” in trading behavior, that Dennis wins the argument hands down and that “Nurture” takes the prize. The so-called “TurtleTraders” were recruited from a classified ad which offered to train a small group of applicants as commodity futures traders and no experience was necessary. Indeed, it would seem to me to be required that any previous sort of trading experience be prohibited lest the variables in this “experiment” be tainted. But, of course, strictly speaking, this was not a scientific experiment at all and so the options could be, and in fact were, less restricted and constrained. The Turtle traders were trained in the rules for entering and exiting trades, provided with personal lessons by both Dennis and Eckhardt, and were each given one million dollars to trade however they decided. All they had to do was follow the Turtle trading system. In the end, the TurtleTraders are said to have made $100 million for Richard Dennis. Some of the Turtles went on to successful independent trading, accumulating riches on their own. OK, well and good, and my hat’s off to Richard Dennis and the other successful traders.
The problem for those of us interested in the whole Nature vs. Nurture debate is, of course, that this “experiment” was a singular event in one area of human activity and, furthermore, an activity that most people do not engage in. Does it really tell us anything beyond what Covel relates in his book? I have to submit, not much. At least, that is, about the whole Nature vs. Nurture debate. Dennis’ investigation or “test” is interesting, yes. Conclusions to be drawn: not many, if any at all. The reasons for this, I think, are obvious and I mention in passing only a few. There apparently was no theoretical structure involved in designing the procedure, no “controlled” environment for the sake of comparison, no accounting for independent or dependent variables, and no replication for the sake of prediction or checking the results. The whole matter essentially involved a simple argument and no genuine hypothesis was put forth for examination. So, actually, this was not a genuine experiment at all, although I think the whole story is an entertaining read.
I do not doubt that many readers, particularly those interested in financial investing, will learn much from Covel’s book about the ins and outs of successful investing. This is, after all, “the true story of the simple investing system that beats Wall Street’s best,” as the dust cover of the book advertises. Furthermore, the book is about a man who became and still is a legend among the financial investing crowd. That, in itself, makes the book worthwhile. But as far as the whole Nature vs. Nurture debate is concerned, there is not anything to be concluded from the reading. Those readers who are really interested in that debate and its consequences will have to look elsewhere. That being said, I highly recommend the book because of the lessons that can be learned from and about those who participated in Dennis’ fascinating “experiment,” as well as the principles of the system that Dennis employed in making this, at least, a singular, successful experience for the participants.
Dr. Jonathan Dolhenty was the Founder and President of The Center for Applied Philosophy and the Radical Academy, and is Honorary Philosophy Editor at The Moral Liberal. The Moral Liberal has adopted these projects beginning with a republishing and preserving of all of Dr. Dolhenty’s work.
The Moral Liberal recommends: Great Books of the Western World