Larry Hite

Larry Hite is known for being one of the forefathers of systematic trend trading, and his hedge fund was the first hedge fund in history to reach 1 billion dollars in assets under management (AUM).

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.

Larry Hite emphasizes on a few things in his approach to the market.

Cut losses fast, and add to your winners
This is a huge philosophy for him, and to him, it applies to every aspect of life, not just trading.

Law on large numbers
This is key for all traders to understand as early as possible.
One single trade should never “make or break” your trading career.
This is where risk management comes into play, it’s the only way we can achieve the large number of trades in our lifetime.

We have to manage our money our way.
This means, we need to take responsibility for our own trading decisions.
Doesn’t matter what method you’re using, once you have made the decision, “This is how I want to trade”, then you need to stick to it.
Stick to it until you make another decision, to change the way you trade.
Only through consistency, can we know that results are produced by this method, and not some other random factor.
Only then can you build confidence, and this new confidence will reinforce the method you trade.

Investing isn’t watching a movie.
This is a great analogy, love it.
He says when going to a movie, we just buy a ticket and sit down and watch until the end of the movie.
This is not for investing.
For investing or trading, he wants to know the ending of the movie before he buys the ticket.
How he does this, is by putting in the hours and research to determine how well his strategies turn out.

There is so much more shared in Larry Hite’s interview!
At his age, you can still tell his mind is very sharp.
Click on this link to watch this wonderful interview with a grandmaster of systematic trend following.

 

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