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Book Description
Captivating perspectives on hedge fund traders who regularly outperform the markets — told in their own voices.
From renowned author, seasoned investor, and Wall Street strategist Jack Schwager comes an inside exploration of the hedge fund industry. Featuring fifteen traders who have consistently outperformed market benchmarks, Hedge Fund Market Wizards dives deep into the mindset and approach that set exceptional traders apart. This volume offers readers a rare window into the philosophies and proven strategies of some of the most successful names in hedge funds.
- Provides exclusive conversations with fifteen top hedge fund managers and the hard-won lessons they’ve gathered throughout their careers
- Features interviews with industry legends including Jamie Mai, Joel Greenblatt, Michael Platt, Ray Dalio, Colm O’Shea, Ed Thorp, among others
- Breaks down forty core lessons that every trader should know
- Continues the legacy of Stock Market Wizards, New Market Wizards, and Market Wizards as the fourth book in Jack Schwager’s highly respected series of expert trading interviews
Through frank reflections on both wins and setbacks, each trader shares practical insights that readers can apply to their own investment journey. Covering everything from finding a trading system aligned with one’s personality to the critical importance of diversification, the book delivers forty timeless principles to guide professionals at every level.
Bringing together the knowledge of true market masters, Hedge Fund Market Wizards distills enduring lessons on what it really takes to succeed in the competitive hedge fund arena.
Editorial reviews
From the Back Cover
Praise for HEDGE FUND MARKET WIZARDS
“Traders regularly use passages and chapters from Schwager’s books as a reference for their own methods and to guide their own trading. His work is an inseparable part of the consciousness and language of trading itself. Schwager’s books are essential reading for anyone who trades, wants to trade, or wants to pick a trader.”—From the Foreword by Ed Seykota
“Jack Schwager is the era’s premier chronicler of financial talent. When historians look back at this mad time and wonder who the key players were, they will turn to Schwager’s books.”
—Robert R. Prechter, Jr., Editor, The Elliott Wave Theorist
“Hedge funds have evolved into a market force, and the timing of Hedge Fund Market Wizards is as valuable as the lessons it contains. Jack’s book excels in knowledge and insight, rather than specific rules that are short-lived. Among the gems are mistakes are the catalyst for improvement, stable returns are suspicious, and you can’t succeed without embracing the risk inherent to your trading style. As you would expect, the book is masterful.”
—Perry J. Kaufman, Managing Director, Kaufman Analytics, Ltd., and author of New Trading Systems and Methods
“Great traders are almost always fascinating human beings. Jack Schwager is the perfect interviewer, equally adept at eliciting life stories and professional secrets. A must-read.”
—William Poundstone, author of Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
Amazon.com Review
Guest review of Hedge Fund Market Wizards, by Stanley Druckenmiller
Jack Schwager’s newest book, Hedge Fund Market Wizards, like his previous works, is yet another solid contribution toward how to effectively manage capital. The book will have strong appeal to three main audiences; those managing capital professionally, those evaluating professional money managers, and those readers who want to manage their own money more effectively.
The fact that markets and the money management industry have gone through tumultuous change makes the central message of the book all the more powerful…that the key ingredients to successful performance are timeless and true in radically different environments. Those ingredients, an appreciation for the balance of risk versus reward in a trade, discipline, adaptability, an open mind, and intellectual honesty that enables one to learn from mistakes, come to life in Schwager’s riveting interviews with a number of managers.
The characters’ stories highlight their very different personalities and lifestyles and are interesting in and of themselves. But it is Schwager’s unique ability to illustrate their winning strategies and interweave their personal backgrounds and emotional highs and lows that makes Hedge Fund Market Wizards both a highly entertaining read and learning experience. What most jumps out at the reader is how radically different styles and approaches all share the common traits mentioned above.
By exemplifying these traits in a number of managers with seemingly different investment philosophies, whether it be short term vs. long term trading, large capital or small, or technical vs. fundamental analysis, Schwager is able to better highlight their essential importance to successful investing. By highlighting their differences, the common thread of their similarities is much more evident. Schwager reinforces the message with succinct summaries of what these commonalities are throughout the book.
Whether a reader is a professional money manager or simply managing their own capital, I have no doubt they will find Hedge Fund Market Wizards both entertains and enhances their ability to grow their capital.
Stanley Druckenmiller founded Duquesne Capital Management, which compounded at 30% per annum without a single losing year from its inception in 1981 to its closing in 2010. From 1988 to 2000, he also served as Lead Portfolio Manager of the Quantum Fund and Chief Investment Officer of Soros Fund Management (1989-2000) where he had overall responsibility for funds with a peak asset value of $22 billion.
Jack Schwager’s Five Market Wizard Lessons
Jack Schwager’s Hedge Fund Market Wizards is ultimately a quest to uncover the wisdom of the most accomplished market professionals. In the closing chapter, the author condenses the experiences of fifteen top traders into forty practical lessons. Below are five highlights:
There Is No Universal Formula for Trading
Many traders hold the false belief that a single method can fully explain market behavior. In reality, no one-size-fits-all solution exists — and even strategies that do work often evolve or lose effectiveness over time. The wide spectrum of approaches highlighted in Hedge Fund Market Wizards — sometimes completely opposite from each other — proves that there are countless ways to achieve success in trading. Each path, however, is challenging to identify and master.
Don’t Equate Profitable Trades with Good Trades
A profitable trade is not always a good trade, and a losing trade is not always a bad one. Even a sound system with a positive edge will encounter losses. What matters is whether a trade follows a well-defined process that consistently works over time. If repeated, these “good” trades will eventually pay off, regardless of individual outcomes. Conversely, trades made purely on chance or impulse are “bad” trades, even when they make money, because in the long run they will erode capital.
Mistakes Are Stepping Stones to Success
Bridgewater’s founder, Ray Dalio, emphasizes that errors are essential for growth. Each misstep, if acknowledged and corrected, can refine one’s trading method. Traders can strengthen their process by logging mistakes, noting the lesson learned, and defining the corrective action. Regularly reviewing this record helps avoid repeated errors. While mistakes are unavoidable, repeating them is not — and breaking this cycle often separates winners from losers.
The Value of Patience and Inaction
Sometimes, the smartest move is to stay on the sidelines. Successful traders know when to hold cash instead of forcing trades in poor conditions. Kevin Daly, manager of the Five Corners Fund, generated over 800% returns in twelve years — a period when overall equity markets remained flat. One of his strengths was staying largely in cash during downturns, avoiding major losses in two bear markets. The takeaway: avoid acting out of impatience when market setups aren’t favorable.
Risk Is Different from Volatility
Volatility and risk are not the same. A low-volatility strategy may hide significant tail risks, while high-volatility approaches can be tightly controlled. For instance, selling out-of-the-money options often shows stable returns until a sudden crash leads to severe losses. In contrast, traders like Jamie Mai of Cornwall Capital may see large swings in performance, but because of their asymmetric trade structures, their downside is capped. Similarly, Martin Taylor of the Nevsky Fund underperformed during the 1999 tech bubble because he refused to buy overpriced stocks. That same discipline later led to strong outperformance when the bubble collapsed. The broader lesson: past performance isn’t always a reliable measure of skill — sometimes, restraint in overheated markets signals true expertise.
From the Inside Flap
What makes a great trader? For years, financial industry expert Jack Schwager has picked the brains of remarkable individuals who have consistently beaten the markets to find out the answer. Now, in Hedge Fund Market Wizards: How Winning Traders Win, he talks with some of the world’s greatest hedge fund experts, highlighting the lessons to be learned from each so that you can apply their wisdom to your own trading.
Over the past few decades, hedge funds have become an increasingly popular investment vehicle, but their explosive growth has made trading more competitive than ever. In Hedge Fund Market Wizards, Schwager shares with readers the invaluable lessons he learned from the fifteen traders profiled, which include some of the industry’s legendary figures, each of whom has compiled an exemplary return-to-risk record.
From the founder of the world’s largest hedge fund to a manager going it alone, the traders interviewed in this book approach their field in radically different ways. But each of them has brought new and unique insights and developed distinct strategies that have allowed them to outperform the markets again and again.
Just as he did in his previous bestsellers, Market Wizards and The New Market Wizards, Schwager asks the questions that get to the core of what makes a successful trader tick. Distilling forty essential lessons to be learned from the market luminaries it profiles, Hedge Fund Market Wizards offers valuable guidance and timeless insights for both investment professionals and market enthusiasts looking to improve their trading abilities by learning from the best.
About the Author
Jack Schwager is a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. He is currently the co-portfolio manager for the ADM Investor Services Diversified Strategies Fund, a portfolio of futures and FX managed accounts.
Previously, Mr. Schwager was a partner in the Fortune Group, a London-based hedge fund advisory firm, which specialized in creating customized hedge fund portfolios for institutional clients. His prior experience includes twenty-two years as director of futures research for some of Wall Street’s leading firms and ten years as the co-principal of a CTA. Mr. Schwager is a frequent seminar speaker and has lectured on a range of analytical topics including the characteristics of great traders, investment fallacies, hedge fund portfolios, managed accounts, technical analysis, and trading system evaluation. He holds a BA in economics from Brooklyn College and an MA in economics from Brown University.
Product details
Publisher : Wiley; 1st edition (April 25, 2012)
Language : English
