Martin Zweig: One of the Most Successful Traders of the Last Century

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 4

“It is easier to make money if you start with a good mentor: but mentors that make millions on their own and still accept to teach are really few in the industry.” - Dr. Emilio Tomasini

Name: Martin Zweig

Date of Birth: July 2, 1942, Cleveland, Ohio

Nationality: American

Profession: Stock investor, investment adviser and financial analyst

Website: http://www.martinzweig.org/

Career

In 1964, Martin took his first degree at Florida Wharton School of the University of Pennsylvania. In 1967, he obtained an MBA from University of Miami, and after that he got a Ph.D. in finance, from Michigan State University. That was in 1969. He also taught finance at some colleges. Immediately after obtaining his Ph.D., he created a popular market indicator called the puts/call ratio. Using a combination of technical and fundamental analyses, he started writing articles and predictions about the markets in Barron's magazine.

He founded his own small-scale market newsletters, the Zweig Forecast. For many years, his articles and predictions were noticeably accurate and thus, became popular. He appeared publicly on TV programs, and became more popular because of accurate timings of market movements. For example, On October 16, 1987, he predicted that the stock market would crash. On October 19, 1987, his prediction came to pass. No sooner had the oracle spoken than his prophecy came to pass. In 1986 he wrote a book titled “Winning on Wall Street.”

As a successful mutual funds manager, he was the chairman of Zweig-DiMenna Associates, Inc. Noted for his extravagant and lavish lifestyle; he owned the most expensive residence in the US at the time. In March 2013, the residence was worth $125 million. Towards the end of his life, he appeared less in public.

He died on February 18, 2013, on Fisher Island, Florida.

Insights:

1. Martin’s dream to become a great trader and a millionaire began in his early teenage years. He bought his first stock at age 13 and vowed to become a millionaire in life. Whatever your age may be, you can make a decision right now to become a profitable trader.

2. He was seriously inspired by a great trading legend – Jesse Livermore. He loved to read Edwin Lefèvre’s book, Reminiscences of a Stock Operator, a book about Jesse Livermore. Martin’s trading method was based on the inspiration he got from Jesse. His trading method also has some features that were similar to William O'Neil's highly successful CANSLIM investing method. Who’s your role model? Who’s the person that inspires you to greatness in trading?

3. His trading method combined technical and fundamental analysis, including certain characteristics of the markets he was interested in. The trading approach worked for him.  In addition to this, he admitted that risk minimization and loss limitation are crucial to his trading method.

4. According to Martin, people somehow think you must buy at the bottom and sell at the top to be successful in the market. That's nonsense. The idea is to buy when the probability is greatest that the market is going to advance.

5. His book that was written in 1986, “Winning on Wall Street,” proved to be extremely helpful to investors who followed the advice in the book. They really won by following his trading ideas. As a result of this, he was featured in other books, like John Reese’s “The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies.” Yes, if you’re successful enough, people will write about you.

Conclusion: In order to be a success, you’ll need to understand what make people fail. To appreciate how to attain everlasting success, you need to learn how traders’ careers can become short-lived. Many a person only wants to know how to become profitable in the markets, but you should be concerned about how to fail so that you can eventually avoid that and experience the opposite of failure. You should be aware of the factors that can kill your dreams as a trader and avoid those things as a plague.

This article is ended with a quote from Martin:

“I measure what's going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.”

Source: www.tallinex.com

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