Tom Shanks arrived at Richard Dennis‘s door having already beaten two systems: the Chicago futures markets as a computer programmer and the Las Vegas casinos as a professional blackjack player. He was the kind of candidate that Dennis, an iconoclast who had built his own career by doing things no one thought were possible, could not pass up. Shanks went on to become one of the most thoughtful graduates of the Turtle experiment, founding Hawksbill Capital Management, named for the sea turtle species, and building a firm whose trading approach evolved substantially from the original rules while remaining anchored to the principles that made those rules work. His story is not one of faithful replication. It is one of deep understanding followed by intelligent adaptation, which is arguably the more difficult achievement.
Blackjack, Computers, and the Road to C&D Commodities
Shanks was a professional blackjack player in the late 1970s, part of the underground network of card counters who systematically extracted edge from casino games using probability and disguise rather than luck. This world required exactly the qualities Dennis was looking for in Turtle candidates: comfort with risk, ability to follow a system under pressure, and the psychological discipline to act on statistical edge even when short-term results ran against it. The parallels between card counting and systematic trend following are direct. Both approaches depend on playing a positive expected-value game consistently across many trials, accepting individual losing periods as part of the structure, and never abandoning the method because of bad short-term outcomes.
In that blackjack world, Shanks had crossed paths with Jiri “George” Svoboda, a Czech immigrant who ran his own card counting team. When Svoboda heard about Dennis’s ad seeking trader candidates, he tracked down Shanks in Chicago. Shanks had no clue about the opportunity. His response was immediate: “You’ve got to get me an interview.” They both got hired that same afternoon.
Before the Turtle program, Shanks had been working as a research programmer at Hull Trading, where he had landed after meeting Blair Hull through the blackjack circuit. Hull offered him a job, and Shanks spent time in 1984 as operations manager of Hull’s Options Research service. That background, quantitative, systematic, and already comfortable with derivatives pricing, made him one of the more technically sophisticated members of the Turtle cohort when he joined Dennis and Eckhardt at C&D Commodities in 1985.
Programming the Principles: The Research Group
One of the less-told stories of the Turtle program is what a small group of second-cohort Turtles did with the downtime between trades. While other Turtles were reading the sports pages or playing ping-pong, Shanks joined Paul Rabar, Erle Keefer, and George Svoboda to form an unofficial research team. Their goal was not to simply follow the rules they had been taught but to validate them, to build a systems testing platform on original Apple computers and run the rules against historical data to understand what they were actually doing.
That project took a year. The results shook the program. The research team determined that Dennis had the Turtles taking considerably more risk than was necessary to capture the system’s edge. By blending the S1 and S2 trading systems together and stress-testing the combined approach, they found they could reduce worst-case drawdown scenarios significantly. The fact that the Turtles were making millions under the original parameters did not prevent the research group from asking whether the parameters could be improved. That intellectual orientation, following the rules but also questioning them rigorously, defined Shanks’s approach to trading for the rest of his career.
Shanks confirmed the broader validation exercise: “All of those trend-following principles were thoroughly confirmed in our testing.” The research did not undermine the philosophy. It reinforced it while refining the execution. That distinction matters. Many traders who encounter drawdowns conclude that their system is broken. Shanks’s research team concluded that the system was sound and that the risk parameters needed adjustment. The difference between those two responses determines whether a systematic trader survives the next difficult period.
Hawksbill Capital Management: Evolution, Not Abandonment
By mid-1986 Shanks was trading the Turtle method for Dennis and affiliated clients. When Dennis wound down his group CTA marketing effort in spring 1988, Shanks took over the program as a registered commodity trading advisor and renamed the operation Hawksbill Capital Management. The name was deliberate: the hawksbill is a species of sea turtle, a quiet signal of lineage without the explicit branding of the original program.
What Hawksbill traded was not the original Turtle system in any strict sense. Shanks was direct about this: “Our trading approach doesn’t resemble the systems that we were taught initially except that it thoroughly and consistently embodies the principles of trend following that we were taught.” That sentence is worth parsing carefully. The specific rules, the entry signals, the exit parameters, the position sizing formulas, had evolved. The underlying principles, identify a trend, follow it with disciplined risk management, exit when the trend ends, had not.
This is the distinction between a trading system and a trading philosophy. The Turtle rules were a specific implementation of a broader philosophy. Shanks absorbed both, which allowed him to modify the implementation without losing the philosophy. Traders who learned only the rules could not do this. They either followed the original rules mechanically, which became less effective as markets changed, or they abandoned them entirely. Shanks evolved them intelligently, which is the harder and more durable path.
The 1989 Wall Street Journal ranking documented Shanks’s results at 63.7 percent average annual return, placing him just below Howard Seidler‘s 64.2 percent and among the top performers of the documented Turtle cohort. Those numbers reflected a period when the original approach was still producing strong returns. Hawksbill’s subsequent evolution maintained the firm’s standing across market regimes that tested less adaptive systematic managers.
Do the Hard Thing: Dennis’s Central Lesson
The episode that captures Shanks’s understanding of the Turtle philosophy most precisely involves a crude oil position. Studying the chart in his Santa Rosa office as Saddam Hussein’s actions were roiling energy markets in late October, he watched momentum falling and felt the pull to sell out of the position. His discipline said no. Dennis had never found evidence that momentum was a valid indicator for the kind of trading the Turtles were doing. And Dennis had taught a lesson that Shanks carried forward explicitly: do the hard thing.
In markets, the hard thing is almost always the counterintuitive thing. Cutting losses is hard because it means admitting you were wrong. Holding winners is hard because it means resisting the urge to take profits while they are visible. Adding to a position that is already working is hard because it feels like chasing. Waiting for the right setup instead of trading out of boredom is hard because inactivity feels like failure. Dennis’s formulation, do the hard thing, is a compressed summary of everything that separates systematic trend following from the way most people naturally approach markets.
Shanks extended that principle to the specific question of taking profits: “I’ve seen over and over again in research that if you try to take profits too quickly, it just kills you. It upsets your system expectation.” His observation that the adage of cutting losses and letting profits run is counterintuitive captures something that every new trader has to discover, usually through painful experience. The natural thing is to do the opposite: take profits quickly because they are real and hold losses because they might recover. Every systematic trading approach, from the Turtle rules to Ed Seykota‘s original systems, is designed to override exactly that tendency.
Risk Management: Knowing the Exit Before the Entry
Shanks’s description of his risk management approach reflects the Turtle training’s core architecture: “We know from the outset exactly where we’re going to get out in the worst case.” Defining the exit before the entry is the foundational discipline of systematic trading. It removes the decision from the moment of emotional pressure, when the position is moving against you and every instinct is telling you to wait a little longer, and places it in the analytical preparation that precedes the trade.
He also addressed the asymmetry between how quickly stops should move relative to profits: “Frequently when a position takes off, you build in substantial profits, to the extent that you put those profits to risk. Your stops don’t move up as fast as your profits do. As your profits grow, the risk of giving them back grows too.” This is a precise description of the trailing stop dynamic that the Turtle system built into its exit rules. You protect capital aggressively but you protect profits less aggressively, because protecting profits too aggressively means exiting trends before they have fully developed. The system is designed to give trends room to run, accepting the return of some profits as the price of capturing the full move.
That architecture, strict on preventing large losses and patient with unrealized gains, is what produces the statistical profile of trend following: many small losses, a smaller number of large wins, and an overall positive expectation when applied consistently across markets and time. Jerry Parker‘s Chesapeake Capital, Paul Rabar‘s Rabar Market Research, and Hawksbill all operated on versions of this same core structure, each evolved from the Turtle foundation in its own direction.
The Turtle Legacy Through Shanks’s Lens
Shanks endorsed Michael Covel’s account of the Turtle story directly: “I did enjoy the book. I hope it’s doing well for you.” That brief endorsement, from someone who had lived through the program, carries weight. The Turtle experiment produced not just a set of profitable traders but a set of practitioners who understood trading deeply enough to adapt, evolve, and continue producing results long after the original rules had been modified beyond recognition. Shanks is one of the clearer examples of that deeper kind of success.
His background, blackjack player, computer programmer, research-oriented systems tester, and disciplined trend follower, equipped him uniquely to interrogate the rules rather than just follow them. The research project he ran with Rabar, Keefer, and Svoboda during the Turtle program was not a distraction from the training. It was the deepest possible engagement with it. Understanding why rules work is the precondition for knowing when and how to change them. Shanks built a career on that understanding.
Original Content from TurtleTrader
Frequently Asked Questions
Who is Tom Shanks?
Tom Shanks is one of the original Turtle traders trained by Richard Dennis. He was a professional blackjack player and computer programmer at Hull Trading before joining the Turtle program in 1985. He went on to found Hawksbill Capital Management, named for a species of sea turtle, and built a long-running trend following CTA that evolved significantly from the original Turtle rules while maintaining their underlying principles.
What is Hawksbill Capital Management?
Hawksbill Capital Management is the Santa Rosa, California-based commodity trading advisor that Shanks founded after taking over management of the Turtle program’s CTA effort in 1988. The name references the hawksbill sea turtle. Shanks has described its trading approach as thoroughly embodying the trend following principles the Turtles were taught, even though the specific systems have evolved substantially from the original rules.
How did Tom Shanks meet Richard Dennis?
Shanks learned about Dennis’s trader search through fellow blackjack player Jiri Svoboda, who bumped into him in Chicago while heading to an interview. Shanks asked Svoboda to get him an interview as well. Both were hired the same afternoon. Prior to that encounter, Shanks had been working as a computer programmer and options research manager at Hull Trading after meeting Blair Hull through the blackjack circuit.
What was the Turtle research project Shanks participated in?
During the Turtle program, Shanks joined Paul Rabar, Erle Keefer, and George Svoboda to build a systems testing platform on original Apple computers. The project took a year. Their findings confirmed the core trend following principles but also revealed that Dennis had the Turtles taking more risk than necessary, leading to refinements in the combined S1 and S2 system parameters. It was one of the first systematic validations of the Turtle rules from the inside.
What does “do the hard thing” mean in Shanks’s trading?
It is the central lesson Shanks attributes to Dennis: in markets, the correct action is almost always the counterintuitive one. Cutting losses feels wrong because it means admitting error. Holding profitable positions feels wrong because it means leaving money on the table if the trend reverses. Adding to winners feels like chasing. Doing the hard thing means overriding those natural instincts and following the system, even when every emotional signal is pointing in the opposite direction.
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