Jack Schwager is best known for his popular best sellers:
Both of these books alerted many to Ed Seykota, the turtles, etc. for the first time. However, readers of Schwager’s books will quickly find that the TurtleTrader web site offers detail left out about trend following (and the turtle system) from his books. We teach and explain trend following, avoiding the mystique of the stock market wizards presented in Jack’s books.
You can buy the books here: The Market Wizards
Here is a discussion found in the Complete Turtle Trader on Schwager’s views on Turtles with relation to his own Market Wizards Book:
Faith should have been one of the biggest traders of the last twenty years, but he was clearly missing that something Jerry Parker had. Author Jack Schwager, seeing the struggles of some Turtles, reeled in the legend his Market Wizards books had created. He told me, “I don’t think it was as much of a miracle as it has been popularized. My feeling is that there is no magic here and perhaps no really great talents other than the original founders.”
Schwager may have a point with Turtles such as Faith and others who never traded to great success after the Turtle program ended.
However, twenty-year performance track records established by at least six other Turtles and William Eckhardt are without a doubt impressive.
At the end of the day, the Turtles could have all the trading rules in the world, but if some were lazy or poor businessmen, if they lacked motivation or the ability to follow through, their failure at trading — or indeed at any entrepreneurial endeavor — was not a surprise.
But the success or failure of some of the original Turtles does not tell us conclusively whether Dennis’s trading wisdom is truly transferable. The Turtle story arguably remains little more than a fascinating corner of investing history, but one without larger implications for the rest of us. The key test is whether the Turtles themselves were capable of passing on the investing knowledge they’d learned, that they’d applied so successfully while working for Dennis.
Fortunately, there is at least one person who provides inspirational evidence of the true transferability of Dennis’s trading wisdom. He is rock-solid proof that a hard-working guy with no direct connection to Dennis and Eckhardt could learn to make big money trading — all out of a sleepy small town in the Texas panhandle. If the applicability of Dennis’s original experiment to wider society has ever been doubted, skeptics will need another excuse to explain away this second-generation Turtle’s success. His name is Salem Abraham.
What Schwager Got Right and What He Missed
Schwager’s observation that some Turtles failed is correct and documented. His conclusion that the Turtle experiment may not have been as miraculous as its legend suggests is partially correct in a way that actually strengthens the experiment’s thesis rather than weakening it. The Turtles who failed did so not because the rules were wrong but because they lacked the motivation, discipline, and entrepreneurial capacity to apply the rules consistently once Dennis’s institutional support was removed. This is exactly what Dennis claimed would differentiate successful from unsuccessful trainees. The failure of undisciplined participants confirms the experimental design, it does not refute it.
The twenty-year track records of at least six Turtles and William Eckhardt are the empirical answer to Schwager’s skepticism. Jerry Parker’s Chesapeake Capital, Liz Cheval’s EMC, Paul Rabar’s Rabar Market Research, and Eckhardt’s own CTA all produced audited multi-decade returns that no honest skepticism can dismiss as luck or selection artifact. The statistical probability of six independent managers producing consistent returns across twenty years of diverse market conditions by chance alone is vanishingly small.
Salem Abraham’s story is the definitive answer to the transferability question. Abraham had no connection to Dennis and Eckhardt. He was operating from Canadian, Texas, a small town in the panhandle. He learned trend following from secondary sources, applied the rules, and built a successful systematic trading operation. If the Turtle experiment only proved that the specific individuals Dennis selected had some personal characteristic that enabled their success, Abraham’s independent success would be impossible to explain. His success demonstrates that the approach transfers to people with no connection to the original experiment.
Frequently Asked Questions
What are the Market Wizards books and why are they important to trend following?
The Market Wizards and The New Market Wizards by Jack Schwager are interview collections with outstanding traders and investors. They introduced many readers to Ed Seykota, Richard Dennis, and the Turtle experiment for the first time. The books created the mystique around these traders that TurtleTrader subsequently worked to demystify. While the interviews are valuable, the Market Wizards books present the traders as exceptional individuals whose success may be unique rather than teachable, which is precisely the thesis TurtleTrader challenges with documented evidence.
Why is Salem Abraham significant to the Turtle transferability argument?
Because he demonstrates that the approach transferred beyond the original Turtles to a practitioner with no direct connection to Dennis and Eckhardt. Abraham learned trend following from secondary sources in a small Texas town and built a successful systematic trading operation. His success answers the question of whether Dennis’s trading wisdom is transferable to people outside the original experiment: it is, to anyone with the right approach, discipline, and commitment to apply it consistently.
Does the failure of some Turtles undermine the experiment’s thesis?
No. The failure of undisciplined participants in a training program that requires discipline confirms the design rather than refuting it. Dennis claimed the rules could be taught but that not everyone would apply them consistently. The Turtles who failed did so by lacking the motivation and entrepreneurial capacity to continue after Dennis’s support ended, not by following the rules and finding them insufficient. The rules worked for those who followed them. The failure of those who did not follow them proves that following the rules matters, which is exactly what the experiment was designed to demonstrate.
Trend Following Systems
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