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Trader Vic--Methods of a Wall Street Master
Trader Vic -- Methods of a Wall Street Master Investment strategies from the man Barron's calls "The Ultimate Wall Street Pro" "Victor Sperandeo is gifted with one of the finest minds I know. No wonder he's compiled such an amazing record of success as a money manager. Every investor can benefit from the wisdom he offers in his new book. Don't miss it!" --Paul Tudor Jones Tudor Investment Corporation "Here's a simple review in three 1. Buy this book! 2. Read this book! 3. See step 2. For those who can't take a hint, Victor Sperandeo with T. Sullivan Brown has written a gem, a book of value for everyone in the markets, whether egghead, novice or seasoned speculator." --John Sweeney Technical Analysis of Stocks and Commodities "Get Trader Vic-Methods of a Wall Street Master by Victor Sperandeo, read it over and over and you'll never have a losing year again." --Yale Hirsch Smart Money "I have followed Victor Sperandeo's advice for ten years, and the results have been outstanding. This book is a must for any serious investor." --James J. Hayes, Vice President, Investments Prudential Securities Inc. "This book covers all the important aspects of making money and integrates them into a unifying philosophy that includes economics, Federal Reserve policy, trading methods, risk, psychology, and more. It's a philosophy everyone should understand." --T. Boone Pickens, General Partner Mesa Limited Partnership "This book gave me a wealth of new insights into trading. Whether you're a short-term trader or a long-term investor, you will improve your performance by following Sperandeo's precepts." --Louis I. Margolis Managing Director, Salomon Brothers, Inc.
304 pages, Kindle Edition
First published April 1, 1991
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Displaying 1 - 16 of 16 reviews
October 15, 2023
How to become a Wall Street Master
Great book. In my opinion very complete and with plenty of good advices.
It is divided in two sections, being "Building Your Knowledge from the Ground Up" the first one and "The Commitment to Make it Happen: Emotional Discipline" the second one.
I would say it is a must read for every trader, speculator or investor, as it contains invaluable knowledge, not only about the markets, the fundamentals and the technic but also on the emotional/psychological part of trading (and life in general)
I have learned a lot from it and I will re-read it again.
"One of the hardest things to accept in life is that mistakes and pain are an invevitable and essential part of it"
"You have to be open to the pain that so often accompanies honesty and growth"
"There is no freedom from risk. There is no freedom from fear. There is nofreedom from pain. There is no freedom from the possibility of failure. But there is freedom in the acceptance of all these as part of life, and moreover, as the least important part of life
Great book. In my opinion very complete and with plenty of good advices.
It is divided in two sections, being "Building Your Knowledge from the Ground Up" the first one and "The Commitment to Make it Happen: Emotional Discipline" the second one.
I would say it is a must read for every trader, speculator or investor, as it contains invaluable knowledge, not only about the markets, the fundamentals and the technic but also on the emotional/psychological part of trading (and life in general)
I have learned a lot from it and I will re-read it again.
"One of the hardest things to accept in life is that mistakes and pain are an invevitable and essential part of it"
"You have to be open to the pain that so often accompanies honesty and growth"
"There is no freedom from risk. There is no freedom from fear. There is nofreedom from pain. There is no freedom from the possibility of failure. But there is freedom in the acceptance of all these as part of life, and moreover, as the least important part of life
October 17, 2017
I liked this book for a couple of reasons and I thought my time was well-spent. Here's why:
*Vic Sperandeo is a directional trader--he plays the short side as well as the long side without real preference between the two. It's not just a book by a trader who thinks that there's a bull market somewhere. He does adequately explain his decision-making process for which side of the trade to take.
*Even though we've all known/talked about Dow Theory, Vic took all of that discussion and all of those writings a hundred years ago quite seriously. This book isn't a good enough book to make you competent in Dow Theory but there was enough detail here to lead me to think that I should spend more time learning more about it. Sperandeo convinced me that Dow Theory could sharpen my decision-making about macro fundamental influences on stock price performance which extend well beyond earnings per share and the other typical fundamental metrics and ratios. Sperandeo makes the point that things are connected out there and there's value in determining those connections or lack thereof.
Note that this book is not current. Vic got his start in the late '60's so the anecdotes and historical perspective is a little dated. And, even though he used the leverage of options in his trades, there's no significant mention of selling options or any of those strategies. Last, since he is either long or short in a trade, I don't remember seeing any mention of neutral strategies. If it's true that the market trends sideways much more often than it trends up or down, then this book won't provide significant guidance for that kind of trading.
Despite those shortcomings, I recommend the book for reading and it did influence me to spend more time learning about macroeconomic conditions/influences. I don't think that I will re-read it but I'm glad that I read it once.
*Vic Sperandeo is a directional trader--he plays the short side as well as the long side without real preference between the two. It's not just a book by a trader who thinks that there's a bull market somewhere. He does adequately explain his decision-making process for which side of the trade to take.
*Even though we've all known/talked about Dow Theory, Vic took all of that discussion and all of those writings a hundred years ago quite seriously. This book isn't a good enough book to make you competent in Dow Theory but there was enough detail here to lead me to think that I should spend more time learning more about it. Sperandeo convinced me that Dow Theory could sharpen my decision-making about macro fundamental influences on stock price performance which extend well beyond earnings per share and the other typical fundamental metrics and ratios. Sperandeo makes the point that things are connected out there and there's value in determining those connections or lack thereof.
Note that this book is not current. Vic got his start in the late '60's so the anecdotes and historical perspective is a little dated. And, even though he used the leverage of options in his trades, there's no significant mention of selling options or any of those strategies. Last, since he is either long or short in a trade, I don't remember seeing any mention of neutral strategies. If it's true that the market trends sideways much more often than it trends up or down, then this book won't provide significant guidance for that kind of trading.
Despite those shortcomings, I recommend the book for reading and it did influence me to spend more time learning about macroeconomic conditions/influences. I don't think that I will re-read it but I'm glad that I read it once.
Read
February 3, 2016Part of The Master Swing Trader bibliography--Answers what the 2B reversal and 123 reversal is. Contains other valuable information (money/credit, risk management, trader psychology). Quite valuable.
January 12, 2017
• Business is like a man rowing a boat upstream. He has no choice; he must go ahead or he will go back.-Lewis E. Pierson
• The first net fisherman had to save in order to acquire the knowledge, time, energy, and materials to construct the net. Once he created the net and learned how to use it, he saved enormous amounts of productive energy by making each of his working hours more fruitful. He could not only provide fish for himself and his family, but could trade his surplus for the products of others.Fish became less scarce because they required less labor to attain, and therefore his neighbors could afford to specialize in producing other necessities to trade with him for his fish.
• Plato, the Greek philosopher, believed that the common man was incapable of governing his own life and affairs. Ideally, he thought that philosopher kings should rule the world. In a sense, Plato got his wish. The members of the FOMC are the philosopher kings of the U.S. economy, and as the sovereigns of the most powerful industrial nation on earth, they wield enormous power over the world economy as a whole. They are the kings, and the markets are the subjects-free to act only within the confines of sovereign dictate.
• What the Fed failed to realize during the 70s is that interest rates aren't the sole determinant of the supply of and demand for money and credit. It goes right back to Von Mises' explanation of the three components of the gross market rate of interest and how they change during the boom/bust cycle.
• Volcker announced that the discount rate would be raised from l l to 12% and that new, restrictive reserve requirements would be imposed on banks' foreign liabilities. Both actions demonstrated the Fed's resolve to bring inflation under control. But the real kicker was Volcker's proclamation that from then on, the FOMC would control the money supply directly by controlling reserves through open market operations rather than by shooting for target Fed Funds rates. At this point, Volcker was engaging in psychological tactics to cool the speculative fever.
• In October 1987, the market was not only no Jack LaLanne, it was an alcoholic, with pneumonia. that smoked three packs of unfiltered Camels a day.Consequently, I was out of the market and looking for an opportunity to short it. The first sign was on October when I read in the Wall Street Journal: "Fed Chairman Greenspan said interest rates could become `dangerously high' if inflation worries`mushroom' in financial markets. Greenspan called such worries unwarranted but hinted the discount rate may have to rise to allay them." The next day, stock prices plunged a record 91.55 points for no immediately apparent reason other than Greenspan's pronouncement. On October 15, Dow Theory gave me a sell signal, and I went short thinking that the patient's heart could fail with even the slightest excitement.The heart attack occurred when Germany and Japan failed to heed James Baker's request to stimulate their economies(inflate) to protect the value of the dollar. In response, Baker announced to the world on Sunday, October 18, that he "would let the dollar slide." I knew at this point that the financial markets would collapse from the dollar devaluation. When the market gapped down on October 19, I shorted the opening of the S&P 500 futures and made a substantial profit for my account in that position alone.
• Unlike other animals, our emotions are not automatic responses to what happens in reality,but are a result of our interpretation of what occurs. The man who believes that wind is caused by the spirits of the dead seeking a resting place will respond much differently to a violent storm than will the trained meteorologist.
• Again in Ayn Rand's words:Just as the pleasure-pain mechanism of man's body is an automatic indicator of his body's welfare or injury, a barometer of its basic alternative, life or death-so the emotional mechanism of man's consciousness is geared to perform the same basic function, as a barometer that registers the same alternative by means of two basic emotions: joy or suffering . . . . [E]motions are estimates of that which furthers man's values or threatens them . . .lightning calculators giving him the sum of his profit or loss.But while the standard of value operating the physical pleasure-pain mechanism of man's body is automatic and innate, determined by the nature of his body-the standard of value operating his emotional mechanism is not. Since man has no innate ideas. he can have no innate value judgments.
• But doesn't it make just as much sense that a change in your physical body would affect you emotionally? Absolutely. For example, motivation specialist Anthony Robbins does the following exercise on one of his audiotape programs.' Try it and see what happens:Stand up straight and erect, shoulders square, and look up at the ceiling. Put a big smile on your face, no matter how stupid it feels. Now, try your best to feel depressed without changing any aspect of your posture or your smile. Keep trying.
• The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression (recession), is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom expansion brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.'-Ludwig von Mises
• The first net fisherman had to save in order to acquire the knowledge, time, energy, and materials to construct the net. Once he created the net and learned how to use it, he saved enormous amounts of productive energy by making each of his working hours more fruitful. He could not only provide fish for himself and his family, but could trade his surplus for the products of others.Fish became less scarce because they required less labor to attain, and therefore his neighbors could afford to specialize in producing other necessities to trade with him for his fish.
• Plato, the Greek philosopher, believed that the common man was incapable of governing his own life and affairs. Ideally, he thought that philosopher kings should rule the world. In a sense, Plato got his wish. The members of the FOMC are the philosopher kings of the U.S. economy, and as the sovereigns of the most powerful industrial nation on earth, they wield enormous power over the world economy as a whole. They are the kings, and the markets are the subjects-free to act only within the confines of sovereign dictate.
• What the Fed failed to realize during the 70s is that interest rates aren't the sole determinant of the supply of and demand for money and credit. It goes right back to Von Mises' explanation of the three components of the gross market rate of interest and how they change during the boom/bust cycle.
• Volcker announced that the discount rate would be raised from l l to 12% and that new, restrictive reserve requirements would be imposed on banks' foreign liabilities. Both actions demonstrated the Fed's resolve to bring inflation under control. But the real kicker was Volcker's proclamation that from then on, the FOMC would control the money supply directly by controlling reserves through open market operations rather than by shooting for target Fed Funds rates. At this point, Volcker was engaging in psychological tactics to cool the speculative fever.
• In October 1987, the market was not only no Jack LaLanne, it was an alcoholic, with pneumonia. that smoked three packs of unfiltered Camels a day.Consequently, I was out of the market and looking for an opportunity to short it. The first sign was on October when I read in the Wall Street Journal: "Fed Chairman Greenspan said interest rates could become `dangerously high' if inflation worries`mushroom' in financial markets. Greenspan called such worries unwarranted but hinted the discount rate may have to rise to allay them." The next day, stock prices plunged a record 91.55 points for no immediately apparent reason other than Greenspan's pronouncement. On October 15, Dow Theory gave me a sell signal, and I went short thinking that the patient's heart could fail with even the slightest excitement.The heart attack occurred when Germany and Japan failed to heed James Baker's request to stimulate their economies(inflate) to protect the value of the dollar. In response, Baker announced to the world on Sunday, October 18, that he "would let the dollar slide." I knew at this point that the financial markets would collapse from the dollar devaluation. When the market gapped down on October 19, I shorted the opening of the S&P 500 futures and made a substantial profit for my account in that position alone.
• Unlike other animals, our emotions are not automatic responses to what happens in reality,but are a result of our interpretation of what occurs. The man who believes that wind is caused by the spirits of the dead seeking a resting place will respond much differently to a violent storm than will the trained meteorologist.
• Again in Ayn Rand's words:Just as the pleasure-pain mechanism of man's body is an automatic indicator of his body's welfare or injury, a barometer of its basic alternative, life or death-so the emotional mechanism of man's consciousness is geared to perform the same basic function, as a barometer that registers the same alternative by means of two basic emotions: joy or suffering . . . . [E]motions are estimates of that which furthers man's values or threatens them . . .lightning calculators giving him the sum of his profit or loss.But while the standard of value operating the physical pleasure-pain mechanism of man's body is automatic and innate, determined by the nature of his body-the standard of value operating his emotional mechanism is not. Since man has no innate ideas. he can have no innate value judgments.
• But doesn't it make just as much sense that a change in your physical body would affect you emotionally? Absolutely. For example, motivation specialist Anthony Robbins does the following exercise on one of his audiotape programs.' Try it and see what happens:Stand up straight and erect, shoulders square, and look up at the ceiling. Put a big smile on your face, no matter how stupid it feels. Now, try your best to feel depressed without changing any aspect of your posture or your smile. Keep trying.
• The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression (recession), is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom expansion brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.'-Ludwig von Mises
May 5, 2024
Aside from his tremendous track record, Victor is worth listening to because he’s the type of trader to really dive deep.
I’ve found that many exceptional traders have gained a special kind of knowledge by doing deep, intense work for exceptionally long periods of time - they have explored nuances of the profession, and, most importantly, found their own unique way to interpret market information and acquire edges.
Victor lays out his process in great detail here. The main takeaway is that he sees the market like a game of poker - the more the odds are stacked in your favor, the greater the probability of success. Mix that with only taking opportunities that have the potential for 3x reward, and you have a good template for success.
Victor’s uniqueness perhaps comes from his use of differing trading styles. He uses fundamental, technical, macroeconomic and statistical clues to make decisions, and pushes hard when many of these align. I’ve found other top traders do the same, even in the small cap space, where the environment is pretty different.
I particularly enjoyed the latter portion of the book, where Victor dives into the psychological part of success. He discusses the importance of having confidence in one’s self, in cultivating one’s own opinions and standing by them, in identifying and replacing false beliefs with others that are more productive. These are recipes for success in life in general, not just the markets.
It’s also very clear that Victor has spent significant time and effort thinking about the markets. More importantly, he has cultivated a kind of wisdom as well, and his tone often verges on the philosophical. He dives deep, for example, into why he thinks government intervention in monetary policy actually CAUSES the constant bear and bull market cycles, and how perhaps we would be better without them.
I do not have an opinion on the arguments themselves, as I am not well read in this subject, but his comprehensiveness, independent thinking and the depth at which his thinking has reached is inspiring - it’s evidence of the kind of work that you need to do to really make it to the top.
Overall, the most important takeaways for me were:
- develop your own way to view the markets. Top traders see the market from their own lens and acquire a lot of data to make informed decisions.
- start with simple market truths, and work from there. How do markets move? What price patterns are universal?
- identify limiting beliefs and kill them; there’s no time to waste by thinking things that do not serve you. Here I disagree with Victor that we should always seek truth - seek the truth as long as it improves you. if it does not serve you, believe in delusion.
- treat trading like a fun game. This is supposed to be an entertaining journey, a complex puzzle that you have to conquer. Adopting this attitude will help you approach work with ease and limit the intensity of the field.
Thanks Victor for this awesome addition to the trading literature - I vow to emulate your performance one day.
I’ve found that many exceptional traders have gained a special kind of knowledge by doing deep, intense work for exceptionally long periods of time - they have explored nuances of the profession, and, most importantly, found their own unique way to interpret market information and acquire edges.
Victor lays out his process in great detail here. The main takeaway is that he sees the market like a game of poker - the more the odds are stacked in your favor, the greater the probability of success. Mix that with only taking opportunities that have the potential for 3x reward, and you have a good template for success.
Victor’s uniqueness perhaps comes from his use of differing trading styles. He uses fundamental, technical, macroeconomic and statistical clues to make decisions, and pushes hard when many of these align. I’ve found other top traders do the same, even in the small cap space, where the environment is pretty different.
I particularly enjoyed the latter portion of the book, where Victor dives into the psychological part of success. He discusses the importance of having confidence in one’s self, in cultivating one’s own opinions and standing by them, in identifying and replacing false beliefs with others that are more productive. These are recipes for success in life in general, not just the markets.
It’s also very clear that Victor has spent significant time and effort thinking about the markets. More importantly, he has cultivated a kind of wisdom as well, and his tone often verges on the philosophical. He dives deep, for example, into why he thinks government intervention in monetary policy actually CAUSES the constant bear and bull market cycles, and how perhaps we would be better without them.
I do not have an opinion on the arguments themselves, as I am not well read in this subject, but his comprehensiveness, independent thinking and the depth at which his thinking has reached is inspiring - it’s evidence of the kind of work that you need to do to really make it to the top.
Overall, the most important takeaways for me were:
- develop your own way to view the markets. Top traders see the market from their own lens and acquire a lot of data to make informed decisions.
- start with simple market truths, and work from there. How do markets move? What price patterns are universal?
- identify limiting beliefs and kill them; there’s no time to waste by thinking things that do not serve you. Here I disagree with Victor that we should always seek truth - seek the truth as long as it improves you. if it does not serve you, believe in delusion.
- treat trading like a fun game. This is supposed to be an entertaining journey, a complex puzzle that you have to conquer. Adopting this attitude will help you approach work with ease and limit the intensity of the field.
Thanks Victor for this awesome addition to the trading literature - I vow to emulate your performance one day.
Read
March 31, 2010Basic, really good stuff
January 5, 2019
This is a good book for basic TA. Rather than go into detail he goes off on psychology. This is important, but it's harder to explain.
August 9, 2021
This book started really well with the technical aspect of analysing charts. About half way through the fundamental chapters of the economics of the market gets rather dull and uninteresting for its high level overviews. They are decent summaries if you are completely new to the market or finance. The latter part about psychology aspect of trading is rather good as well.
Definitely worthy of a read for all market participants.
Definitely worthy of a read for all market participants.
October 14, 2018
Amusing and practical based on traditional technical analysis combined with statistics
April 30, 2019
Recommended by Indian investor Rakesh J. This is not the best book for stock market, but definitely a must read to widen our perspective towards markets and our behaviour towards them.
Want to read
November 1, 2021rj
September 10, 2023
Covers a decent breadth of topics of speculating but many sections are too theoretical and dry and sometimes superficial.
July 22, 2025
It's a great one, especially psychological chapters so a second part of the Sperandeo Trader Vic. So cool to see a topic in non stereotypical, educational way. I recommend a lot!
September 13, 2020
I like that the author is well versed in his Austrian school and uses that to inform his trades. The details of how he uses Dow theory seemed a bit vague, but the way he applies it to collecting statistics is interesting.
December 23, 2016
great great book !
April 27, 2017
Solid but not special
Nothing very concrete but does cover a broad range of important items in detail. Heavy focus on mindset throughout the book
Nothing very concrete but does cover a broad range of important items in detail. Heavy focus on mindset throughout the book
Displaying 1 - 16 of 16 reviews