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The Rule: How I Beat the Odds in the Markets and in Life―and How You Can Too
The empowering story of Larry Hite’s unlikely rise to the top of the hedge fund world―with critical insights and lessons you can take to the bank
In The Rule , legendary trader and hedge fund pioneer Larry Hite recounts his working-class upbringing in Brooklyn as a dyslexic, partially blind kid who was anything but a model student―and how he went on to found and run Mint Investment Management Company, one of the most profitable and largest quantitative hedge funds in the world.
Hite’s wild success is based on his deep understanding that markets are flawed―just like people. Through his early-life struggles and failures, Hite came to know himself well―his fears, his frustrations, his self-doubt, and his tolerance for all of the above. This motivational book reveals that by accepting the facts of his life and of himself, he was able to accept markets as they are. And that was the key to his success.
In these pages, you’ll walk of the footsteps of an investing legend, who imparts smart, practical trading lessons throughout the journey. Making a successful living in trading isn’t about beating the markets. It’s about meeting markets where they are, embracing the fact of risk, knowing yourself, and playing it strictly by the numbers.
The Rule shows that investing decisions are not only bets or gambles, but investments in time, energy, and attention. By focusing on realistic returns on your investments―versus what you expect or hope to get―you immediately improve your probability for success.
In The Rule , legendary trader and hedge fund pioneer Larry Hite recounts his working-class upbringing in Brooklyn as a dyslexic, partially blind kid who was anything but a model student―and how he went on to found and run Mint Investment Management Company, one of the most profitable and largest quantitative hedge funds in the world.
Hite’s wild success is based on his deep understanding that markets are flawed―just like people. Through his early-life struggles and failures, Hite came to know himself well―his fears, his frustrations, his self-doubt, and his tolerance for all of the above. This motivational book reveals that by accepting the facts of his life and of himself, he was able to accept markets as they are. And that was the key to his success.
In these pages, you’ll walk of the footsteps of an investing legend, who imparts smart, practical trading lessons throughout the journey. Making a successful living in trading isn’t about beating the markets. It’s about meeting markets where they are, embracing the fact of risk, knowing yourself, and playing it strictly by the numbers.
The Rule shows that investing decisions are not only bets or gambles, but investments in time, energy, and attention. By focusing on realistic returns on your investments―versus what you expect or hope to get―you immediately improve your probability for success.
256 pages, Hardcover
First published October 1, 2019
101 people are currently reading
568 people want to read
About the author
Larry Hite
5 books4 followersLawrence D. Hite is a hedge fund manager who, along with Ed Seykota, is one of the forefathers of system trading.
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Displaying 1 - 30 of 38 reviews
September 6, 2020
Part memoir and part guide on investing. Larry Hite is one of the pioneers of trend following. A lot of old school emphasis on risk management, which I like because as the saying goes, "The trend is your friend, until it ends". Things can and often get pretty ugly when said trend ends, so proper risk management is always a must.
August 14, 2020
The Rule by Larry Hite is a very inspirational story about a boy with dyslexia who was also blind in one eye who became successful with a lot of persistence and some good luck. Hite tried his hand at stand-up comedy, screenwriting and being a rock music promoter before starting his trading career. He learnt the trade and set-up his own shop with a couple of partners.
'The Rule' of the title refers to the main rule of trading which says 'cut your losses and let your winners run'. It is easy to say but quite difficult to follow. He came close to bankruptcy once because of trading errors of his partner who did not follow this rule. He dismantled the old business and started a new hedge fund which went on to become the first billion dollar hedge fund in the late 1980s. In this book he shares his philosophy of life and trading. He is one of the best trend followers in the business and there is a lot to learn from his trading philosophy.
'The Rule' of the title refers to the main rule of trading which says 'cut your losses and let your winners run'. It is easy to say but quite difficult to follow. He came close to bankruptcy once because of trading errors of his partner who did not follow this rule. He dismantled the old business and started a new hedge fund which went on to become the first billion dollar hedge fund in the late 1980s. In this book he shares his philosophy of life and trading. He is one of the best trend followers in the business and there is a lot to learn from his trading philosophy.
September 12, 2020
Larry is a successful trader, but the book is way too simple.
Simply put, cut loss and let winner runs. It gets too exaggerated when one say this can apply as life rule. And honestly, it is not necessary to keep emphasing his shortcomings and today's success. It feels like there's too much bragging.
Simply put, cut loss and let winner runs. It gets too exaggerated when one say this can apply as life rule. And honestly, it is not necessary to keep emphasing his shortcomings and today's success. It feels like there's too much bragging.
April 8, 2024
Great read Larry could teach a gambler how to gamble and a trader how to trade. Preaching risk the way he did in this book was good and something I’d reread / relisten to
July 12, 2022
Larry Hite's autobiography tells the story of a true market wizard who, as young man, most wrote off due to his poor eyesight, dyslexia, and clumsiness. It's a story of optimism and grit by one who ingeniously used his natural limitations as sources of strength. Hite became so accustomed to failure in his youth that rejection as an adult in the world of business did not faze him or slow him down. Combined with his natural intelligence, mental math ability, and extroversion, that thick skin helped him build the largest systematic hedge fund of its day, Mint Investment Management Company.
At first glance “The Rule” reads as an entertaining autobiography with personal stories from Hite's life and words of encouragement for newer traders. But, on a deeper level, Hite builds a case that his success is not a fluke. On the contrary, he argues that anyone who seriously seeks to make a living as a trader/investor needs to set clear and specific goals, maintain unwavering persistence in the face of failure, and overcome personal shortcomings by involving others with complimentary skills. The latter forms a big part of Hite’s success. He generously shared his firm’s profits with people who brought important skills to the table such as statistical analysis and information technology.
This is not a “how-to” investment book in any sense. Hite’s "Rule" and other savvy tips will not be news to most investors or speculators. Hearing them again from one of Hite's accomplishments does, however, reinforce one's belief in their value. Most important in my mind is his admonition to stick to a system or, better yet, a mix of strategies, without variance. That is the only way to measure your edge with confidence to enable tweaks and improvements over time.
You have to read between the lines to pick up nuggets of wisdom that you can use for further research on your own. Hite mentions game theory, Bayesian analysis, and systematic trend following as important elements of his success. But he does not probe or even explain these things at more than a very basic level, if that. The failure to explain a bit more about those technologies short-changes readers to some degree, many of whom buy a book like this to help them open new avenues for their own research. The book includes no reference section or footnotes to point readers towards helpful books, articles, or websites to learn more.
Perhaps the key lesson to take away from this book is summarized in Hite's now-famous basic rules about trading and life (first published 32 years ago): (1) "If you don't bet you can't win," and (2) "If you lose all your chips, you can't bet."
Larry Hite’s “The Rule” is a worthwhile read for any serious market participant. Investment success is as much a matter of psychology, attitude, introspection, and grit as compared to method, strategy, or luck. Reading the biographies of great traders can help you learn stuff they do not teach in school.
At first glance “The Rule” reads as an entertaining autobiography with personal stories from Hite's life and words of encouragement for newer traders. But, on a deeper level, Hite builds a case that his success is not a fluke. On the contrary, he argues that anyone who seriously seeks to make a living as a trader/investor needs to set clear and specific goals, maintain unwavering persistence in the face of failure, and overcome personal shortcomings by involving others with complimentary skills. The latter forms a big part of Hite’s success. He generously shared his firm’s profits with people who brought important skills to the table such as statistical analysis and information technology.
This is not a “how-to” investment book in any sense. Hite’s "Rule" and other savvy tips will not be news to most investors or speculators. Hearing them again from one of Hite's accomplishments does, however, reinforce one's belief in their value. Most important in my mind is his admonition to stick to a system or, better yet, a mix of strategies, without variance. That is the only way to measure your edge with confidence to enable tweaks and improvements over time.
You have to read between the lines to pick up nuggets of wisdom that you can use for further research on your own. Hite mentions game theory, Bayesian analysis, and systematic trend following as important elements of his success. But he does not probe or even explain these things at more than a very basic level, if that. The failure to explain a bit more about those technologies short-changes readers to some degree, many of whom buy a book like this to help them open new avenues for their own research. The book includes no reference section or footnotes to point readers towards helpful books, articles, or websites to learn more.
Perhaps the key lesson to take away from this book is summarized in Hite's now-famous basic rules about trading and life (first published 32 years ago): (1) "If you don't bet you can't win," and (2) "If you lose all your chips, you can't bet."
Larry Hite’s “The Rule” is a worthwhile read for any serious market participant. Investment success is as much a matter of psychology, attitude, introspection, and grit as compared to method, strategy, or luck. Reading the biographies of great traders can help you learn stuff they do not teach in school.
This entire review has been hidden because of spoilers.
May 17, 2020
Larry is arguably one of the most successful/original trend follower. In this book he details his shortfalls as well as his philosophy towards trading and life in general. He emphasised "cutting your losers short, letting your winners run" in almost every pages of the book. Also, he related this adage in life, career and marriage - the importance of letting go and moving on.
Furthermore, Larry also highlighted the "survival of the fittest" concept in the market, it is imperative to adapt to the ever changing market conditions. Less is more - take numerous small losses but when the big winners comes, they can be life changing.
Some of the noteworthy quotes:
"All major fortunes are built on a lot of small losses, which pave the way to big wins and success."
"There are very few people who are not afraid of losing."
"If you're always winning but winning only small amounts, then you aren't really winning anything."
"I am alive financially because I cut my losses and became wealthy because I let my winners run."
"The best time to think about risk is before you start."
The first half of the book is really fascinating but the latter half gets really clumsy and a lack of structure. Cutting losers, sounds easy but they are incredibly hard to do. Likewise for letting profits run. I guess thats why we don't see the average Joe being a billionaire for not mastering The Rule.
Overall, this short book about one of the most prominent trend following hedge fund manager is highly recommended.
Furthermore, Larry also highlighted the "survival of the fittest" concept in the market, it is imperative to adapt to the ever changing market conditions. Less is more - take numerous small losses but when the big winners comes, they can be life changing.
Some of the noteworthy quotes:
"All major fortunes are built on a lot of small losses, which pave the way to big wins and success."
"There are very few people who are not afraid of losing."
"If you're always winning but winning only small amounts, then you aren't really winning anything."
"I am alive financially because I cut my losses and became wealthy because I let my winners run."
"The best time to think about risk is before you start."
The first half of the book is really fascinating but the latter half gets really clumsy and a lack of structure. Cutting losers, sounds easy but they are incredibly hard to do. Likewise for letting profits run. I guess thats why we don't see the average Joe being a billionaire for not mastering The Rule.
Overall, this short book about one of the most prominent trend following hedge fund manager is highly recommended.
September 22, 2024
I’ve listened to a number of interviews with Larry Hite and he’s a very interesting character who’s accomplished a great deal in his life. Growing up with dyslexia and very poor vision might seem an extra set of challenges that many of us haven’t had to deal with, and perhaps that’s what helped spur him into action to learn his strengths and maximize them. He found philosophies and techniques that helped him not only wildly succeed in the world of finance and trading but also apply to so many other areas of his life. The concepts of following trends, of cutting losses short and letting winnings run, though simple, are very powerful ideas. I thoroughly enjoyed this mix of autobiography, self-help, and investing/trading.
May 1, 2025
There will be many who criticise this book for not giving you the exact trading rules Larry used; however (like many other trend following books) this does not really matter, as the important part is the philosophy of why the method works.
That does not mean this is above criticism. I found the writing clunky, and the memoir parts leant heavily on how many disadvantages he had (while valid and interesting, a phrase about flogging a dead horse springs to mind). Also while he espouses the belief that it is the mistakes that a more formative and beneficial than successes, his actual mistakes that are documented are generally few and far between.
Having said that, there are some very useful ideas here, both specific and general. Worth a read, but not the best in the TF space.
That does not mean this is above criticism. I found the writing clunky, and the memoir parts leant heavily on how many disadvantages he had (while valid and interesting, a phrase about flogging a dead horse springs to mind). Also while he espouses the belief that it is the mistakes that a more formative and beneficial than successes, his actual mistakes that are documented are generally few and far between.
Having said that, there are some very useful ideas here, both specific and general. Worth a read, but not the best in the TF space.
November 8, 2021
Very good book, from a very smart man.
1st rule -> you need to play to win
2nd rule -> don't lose your capital, because you cannot play
There are 4 types of bets. First 2 are defined by the probability, second 2 by the outcome:
good bets
bad bets
winning bets
loosing bets
Worst are bad bets with positive outcome, because they trick you to believe you did something good and are likely to repeat that behavior. Do it multiple times and you will loose you capital (remember rule No 2?).
As noted elsewhere, leverage applied without knowledge leads to either immediate or eventual disaster.
1st rule -> you need to play to win
2nd rule -> don't lose your capital, because you cannot play
There are 4 types of bets. First 2 are defined by the probability, second 2 by the outcome:
good bets
bad bets
winning bets
loosing bets
Worst are bad bets with positive outcome, because they trick you to believe you did something good and are likely to repeat that behavior. Do it multiple times and you will loose you capital (remember rule No 2?).
As noted elsewhere, leverage applied without knowledge leads to either immediate or eventual disaster.
March 12, 2020
This is the best book available on the philosophy of trend following. I've read all of them I have found and this is the best. Don't look for a detailed description of Larry Hite's investing system though. This is the foundation for building your own system. It's not something to can copy line by line and get rich quick.
It's a way of thinking about the world, life, and investing. You have to create your own systems.
It's a way of thinking about the world, life, and investing. You have to create your own systems.
April 12, 2020
4+ Hite provides in simple terms his highly lucretive formula for creating wealth and also for being successful (as one sets the definition of success) in life. Hite’s life is proof that one who begins with serious disadvantages can overcome them with the proper attitude, a firm plan, and confidence in oneself. Understanding failure and factoring in an acceptance that “no one bats 1000” has worked for Hite in a marketplace that always has wins and losses.
April 20, 2025
Larry Hite is a trend follower and among the earliest ones to start systematic trading. His rules are broad which apply to both markets and life. What it teaches is :
1. Cut your losses early and find next bet
2. Start with worst case scenario in mind
3. No strategy works all the time
4. Stop losses are a great tool in both market and in life, Don't stay in bad marriage, partnership.
You can get fresh knowledge if you have not read anywhere about Trend following.
1. Cut your losses early and find next bet
2. Start with worst case scenario in mind
3. No strategy works all the time
4. Stop losses are a great tool in both market and in life, Don't stay in bad marriage, partnership.
You can get fresh knowledge if you have not read anywhere about Trend following.
April 9, 2020
Decent life story and approach to trading
Larry was engaging about his life story. The points he offered and used through his life I have seen in other books on trading. He was the first person to really admit that trading is a gamble similar to a casino. Most other books I read on trading never said that.
Larry was engaging about his life story. The points he offered and used through his life I have seen in other books on trading. He was the first person to really admit that trading is a gamble similar to a casino. Most other books I read on trading never said that.
December 2, 2022
Totally useless for beginners.
Casual read for professionals - helps to reinforce their risk management principles & to cut losses short !
Talks a lot about risk management & accepting losses. But they are all general vague stories ! Surprised to find a book with no specific guidelines from an author who preaches through out about specificity by relying on numbers.
Casual read for professionals - helps to reinforce their risk management principles & to cut losses short !
Talks a lot about risk management & accepting losses. But they are all general vague stories ! Surprised to find a book with no specific guidelines from an author who preaches through out about specificity by relying on numbers.
April 28, 2024
It was okay. The book consists of autobiographical anecdotes and personal philosophy. It's an easy read, and fun to learn some stories from the older generation of an investment legend. If you're short on time, just read chapter 9, which is an interview transcript that summarizes everything from the earlier chapters.
April 3, 2020
Cut your losses and let your winners run. That’s the rule.
Definitely got some wheels turning for me. Also pointed me towards some useful and practical methods of trading. Trailing stops, for example! Cutting your losses mercilessly at a predetermined point is also a good lesson for me.
Definitely got some wheels turning for me. Also pointed me towards some useful and practical methods of trading. Trailing stops, for example! Cutting your losses mercilessly at a predetermined point is also a good lesson for me.
January 30, 2023
Good example that dreams are stronger that limitations.
I have many ideas to improve my trading performance, our lives can be as well an speculation game. I found this book so inspirational with god tips not just for trading, for build any career or achieve bigs goals.
I have many ideas to improve my trading performance, our lives can be as well an speculation game. I found this book so inspirational with god tips not just for trading, for build any career or achieve bigs goals.
April 18, 2024
Larry Hite did a good job in summarizing his life and investing strategy without making it sound too esoteric or philosophical. This is a quick, enjoyable read for anyone who is interested in understanding the basics of systematic trading.
January 5, 2020
Uma autobiografia do Larry Hite (investidor). Destaca bons princípios de investimentos, em especial a gestão de risco do negócio. Interessante.
June 18, 2020
The Rule - Larry Hite. 10/10. Absolute legend. That's the stuff I love: you get the story and the reflections. Wow. Wow. Wow. (<- and I read this 2 months ago)
June 27, 2020
Cut the losers, ride the trend all the way to the backside. So many highlights..really enjoyed this no nonsense book from an all-time top 10 trader.
December 8, 2020
What a fun book!
I'm very excited to learn about investing and playing with my own trading principles.
I highly recommend this book to anyone who would rather be excited about money than fear it.
I'm very excited to learn about investing and playing with my own trading principles.
I highly recommend this book to anyone who would rather be excited about money than fear it.
December 18, 2020
Never risk more than you can afford to lose. Find asymmetrical leverage
March 13, 2021
Прикольная книга. Воодушевляет и заставляет перестать жалеть себя и отсутствие возможностей.
Read
June 24, 2021This was a pretty simple read. Very straight forward and basic underlying approach to investments
Want to read
December 13, 2021MM
January 10, 2022
Quick Read on trend driven trading. Not too much technical. More or less professional biography of Larry Hite. Rules are 1. Get into the game 2. Cut Your loses 3. Let your winner win!
March 23, 2022
"Life is a constant series of bets that we must make every day in the face of uncertainty"
September 6, 2022
Good principles, good book.
February 23, 2023
audio on scribd
Displaying 1 - 30 of 38 reviews