Of all the original Turtles selected by Richard Dennis, Michael Carr may have the most unlikely backstory. Before Dennis found him, Carr was a game designer at TSR Hobbies — the company that created Dungeons and Dragons. He was the eighth employee at a firm that grew to over 300 people and $30 million in sales, wrote children’s books, designed war games, and had no background in trading whatsoever. Then one Tuesday in the summer of 1983, he picked up the Wall Street Journal for the first time in six months and saw a classified ad for a commodity futures trader.
He called it “Divine Providence.”
Dennis and Eckhardt selected Carr as one of roughly 23 traders in the 1984 and 1985 cohorts. He received two weeks of training, a draw to cover living expenses, and three and a half to four years to trade. He did not lose money.
The Experiment in Context
The 2013 WBEZ radio feature on Carr, Cavallo and DiMaria, “Checking in With ‘Turtle Traders’ 30 Years Later,” is reprinted on the Michael Cavallo page.
Michael Carr in His Own Words
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.
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.
What Carr’s Selection Tells Us About the Turtle Experiment
Dennis was not looking for people who already knew how to trade. He was looking for people with the psychological profile to follow a system under pressure. Carr’s answer about Rommel — strategy over ego, resilience under setback, respect earned from adversaries — was the kind of thinking Dennis wanted to cultivate. Out of 1,100 applicants, Carr was the only one who gave that answer. That is not luck. That is a specific way of thinking about performance under constraint, which is exactly what trend following demands.
The Turtle experiment remains one of the most studied cases in trading history precisely because it worked on people like Carr: a game designer from Minnesota with a history degree, no trading background, and a Tuesday copy of the Wall Street Journal.
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