Tuesday, March 06, 2012

Mark Minervini interview: define and refine your approach

Veteran stock trader and "Market Wizard", Mark Minervini shares his story in an interview with the Your Money Matters podcast. 

I thought this interview with Minervini, a largely self-taught trader who transitioned into trading after working as a musician, would make a nice follow up to our recent post on self-education and the school of hard knocks

Here are some key points Mark makes in this interview:
  • "I wasn't always successful. In fact, for the first six years I didn't make any money at all."
  • Mark started trading in 1983. He began visiting the library and one day came across Richard Love's book, Superperformance Stocks. Mark spent "the next twenty-seven years" refining his approach.
  • Persistence can be more important than knowledge. Learning to trade the stock market can be difficult, and there is a long learning curve. Mark stayed with one approach and spent his time mastering it. "It's not going to happen right away". 
  • "I don't believe in failures". Instead, Mark says he views outcomes in terms of results. There are desirable results and undesirable results. We try things, we learn, and we make some adjustments while trying again
  • "I made my big mistakes when I had the least amount of money, when I was just starting out". You have to define yourself as an investor or an aspiring trader with a given style, and know that it will take a long time and a lot of work to become a professional trader. However, the work is justified by the rewards. 
  • You have to review and analyze your results to help build your approach. Minervini did this after an early losing period, and soon gravitated towards a more sound approach to stock selection. Keep a journal and track your trading performance so you can make improvements. 
  • Is there a certain personality type that makes a standout trader? Mark says he's learned not to judge a book by its cover. As Mark puts it, citing his own experience, "I was a musician, I had long hair, I dropped out of school in the 8th grade...I'm completely self-educated so you might not have bet on my results." Good traders aren't necessarily born, but they are developed over time.
This is just a sampling of what you'll find in the interview with Mark Minervini. To sum up one of the main themes of the discussion, get started learning a particular style or approach, then "define it and refine it".

Related articles and posts:

1. Self education and the school of hard knocks - Finance Trends.

2. Mark Minervini interview via Pradeep Bonde - StockBee.

3. Charles Kirk interviews Mark Minervini - The Kirk Report.

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