Michael Carr: A TurtleTrader Trained by Richard Dennis

Checking in With ‘Turtle Traders’ 30 Years Later by Yolanda Perdomo:

The Eddie Murphy comedy “Trading Places” celebrates its 30th anniversary this summer.The box office hit explored whether a person who has no formal training can make millions in the markets.The two main characters, Mortimer and Randolph had two counterparts in Chicago traders William Eckhardt and Richard Dennis.Dennis reportedly made his first million by the age of 25. A few months after the movie hit theaters, Eckhardt and Dennis put an ad in the newspaper looking for new talent.

“The ad looked like the New York Yankees looking for a starting shortstop,” Michael Cavallo said. He was already in commodities, for the beverage department at General Cinema. But the idea of working with Dennis was on a whole other level. The ad read something like this: a group of applicants would be trained in Dennis’ proprietary concepts, trade only for him and get a percentage of the profits.

Chicagoan Jim DiMaria was among those picked. DiMaria says he got an $18,000 draw. “That was enough to pay my grocery bills and I knew that was going to be secure,” DiMaria said. The name turtle came from Dennis, who thought he could train traders as fast turtles were raised in farms. Michael Covel is the author of The Complete Turtle Trader. He says Dennis and Eckhardt believed the markets were a reflection of people and their decision-making or their human behavior.

“If a market was moving up, you want to be following that trend, if it’s going down, you want to be following that trend and the idea being if the market is moving down, you’re shorting the market to make money if the market drops,” Covel explained. Dennis and Eckhardt took around 20 people: about half with no business background. Michael Carr is a Wisconsin native who worked for the company that created Dungeons and Dragons. Carr and the other Turtles had three and a half to four years to make money after two weeks of training. He says part of the recruiting process included answering personality questions like “how important is money to you and why? and ‘would you rather be good or lucky?’”

Carr, Cavallo and DiMaria won’t say how lucky they were. But they didn’t lose money. But not all of the Turtles made money. Several were dropped early in the program. Richard Dennis and William Eckhardt declined to be interviewed for the story. DiMaria would describe the experiment as a success. “If this were in fact the dollar bet (like the one made in Trading Places), which is the theory, (then, yes) can trading be taught…but maybe not to just anyone,” DiMaria said. Michael Covel says the lessons learned from the Turtle Traders continue today. “I think they’re seen as visionaries and very successful traders,” Covel said. Today, Cavallo is in Massachusetts and works for the Clinton Foundation. Carr is a freelance writer in Wisconsin. DiMaria is still trading with his own firm.

Michael Carr Background

Bonus interview with Michael Carr excluded from The Complete TurtleTrader:

I grew up in Saint Paul, Minnesota and attended Macalester College there, earning a degree in history in 1973 with plans to teach high school social studies. Unfortunately, those were bleak economic times and there were virtually no openings for teachers. In order to get started on a career of some sort, I went into the management training program for the Ground Round restaurant chain, parlaying my part-time college job into something full time. My training assignment was in Cedar Rapids, Iowa. Working six nights a week and having Tuesdays off got old in a hurry, so I was looking for something different and more promising to do. Fortunately, two acquaintances of mine, Gary Gygax (of Lake Geneva, Wisconsin) and Dave Arneson (of Saint Paul) had just launched a game company (TSR Hobbies, Inc.) in Lake Geneva, Wisconsin and published a new role playing game called DUNGEONS & DRAGONS.

They invited me to come work there and I gladly accepted the offer in the spring of 1976. I had a ringside seat for the whole D & D phenomenon, which was rather incredible, as you can imagine. Over a seven year period I worked as a game designer, editor, general manager, production vice president, and children’s book writer. In 1983, TSR fell upon hard times after a remarkable period of growth. I was the eighth employee, and at its peak the company employed over 300 people and had sales in excess of $30 million.

Due to some blunders by senior management and a certain amount of hubris that blinded them to their missteps, the company’s fortunes took a turn for the worse. The staff was cut from 300 to 100, putting 200 of us out of work. The good news was that they did manage to save the company with these draconian measures, but that was small consolation to me personally. After a bit of reflection, I decided to try my hand as a freelance writer. In my latter days at TSR I had written several children’s books. One of those titles, ROBBERS & ROBOTS, had sold over a quarter million copies, so I had some confidence that I might have a chance in the world of children’s literature. That was when Divine Providence intervened.

What else could you call it, when a guy who hadn’t picked up the WALL STREET JOURNAL in six months happened to choose a particular day–a Tuesday–when the job ads typically run, to purchase a copy and notice an ad for Commodity Futures Trader? Although there was no way of knowing it at the time, buying the JOURNAL on that particular day in the summer of 1983 was a life-changing moment for me.

The interview continues:

Since I was outside the trading business, I had a number of questions about their trading activities, which they fielded quite graciously. Richard Dennis was renowned as a technical trader, but I wasn’t aware of that at the time, so I asked, ‘Do you trade technically or fundamentally?’ With a bemused smile, Rich Dennis replied, ‘We trade technically.’

My follow-up question was, ‘Is fundamental trading dead?,’ to which he responded, ‘We hope not.’ One of the subsequent lessons we learned was that, in the zero sum futures trading world, the money is funneled from the many to the few–the few who are able to develop and implement successful trading strategies. From Rich’s reply it’s obvious that he was banking on the superiority of the technical strategy over a fundamental approach. I asked if my lack of trading experience was considered a positive or a negative. Rich replied that it probably was a slight advantage, since I could be trained in their methodologies without having to unlearn any bad habits.

The questions about demeanor included queries like ‘How important to you is it to be right about what the market is doing?’ and ‘How important is money to you?’ Obviously, they were interested in assessing the suitability of each candidate for trading, where the psychological aspects can be every bit as important as the trading strategy being used. I also remember Rich asking me, ‘Why Rommel?’ Out of 1100 respondents, I was the only one who cited Field Marshal Erwin Rommel, the famed ‘Desert Fox,’ as the person from history I most admired.

I explained that Rommel was a person worthy of respect and emulation. Despite being a German general during the Second World War, he was not a Nazi. In fact, he opposed Hitler and was implicated in the plot to assassinate the Fuhrer in July of 1944, ultimately paying with his life. As a strategist, he was outstanding and was able to achieve great results with minimal resources. When he suffered setbacks, he was undeterred. Most telling of all, he was highly respected by military men on both sides, as a general and as a man. Rommel was extremely successful and embodied many of the traits of a good trader, in my opinion.

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