Episode 6 – Brendan Moynihan – Lessons From What I Learned Losing A Million Dollars

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Summary

Brendan is the author of numerous books but I brought Brendan on the show to pick his brain about one of my favourite books and one that I often recommend to other traders – “What I Learned Losing a Million Dollars“.  IMG_3981

What I Learned Losing a Million Dollars was originally published in 1994 and recounts the story of Jim Paul’s meteoric rise and crash. The story alone is worth the read however the lessons you will find in the second half of the book turns the book from a simple biography into a powerful and timeless parable.

The book is filled with quotables and great ideas and I think you’ll find it worthy to add to your trading library.

 

 


Big Ideas

 

  1. The bigger than life story of Jim Paul – by the way he’s the one who lost over $1,000,000 in the 80’s which was a lot of money
    1. The dangers of self attribution bias
  2. The 3 Mistakes that all traders/investors make
    1. Personalizing a loss – internalizing an external loss;
    2. Confusion about what type of market participant you are;
    3. Emotionalism – letting your emotions steer your decision making.
  3. The 5 stages of internal loss and how that relates to trading
  4. Why Brendan advises treating trading like a game – and it isn’t why you think
  5. And why it’s a tragic mistake to tie your self worth to your net worth
    • Self image should not be a function of what you accomplished but how 

Time Stamped Show Notes:

  • [00:30 ] – How Brendan came up with the title of the book
  • [04:03 ] – The story of Jim Paul and his meteoric rise and fall
  • [7:15 ] – Brendan’s background
  • [11:50] – The publishing history of “What I Learned Losing A Million Dollars”
  • [17:15] – The 3 Mistakes Investors / Traders make
  • [17:42 ] – The 5 Stages of Internal Loss
  • [19:45] – The different types of market participants
  • [25:31] – The real 2 emotions driving the market – hope and fear
  • [29:42 ] – The reason to treat trading like a game
  • [31:27] – The importance of a trading plan
  • [36:50] – Are you disciplined or do you need discipline inflicted?
  • [40:11] – The random reward structure of the market
  • [44: 48] – Creating a red flag checklist
  • [51:14] – Crowd trades

Quotables

[Tweet “I can’t get out here; I’m losing too much. – Loser’s famous last words”]

The moral of the story is: Success can be built upon repeated failures when the failures aren’t taken personally; likewise, failure can be built upon repeated successes when the successes are taken personally.

[Tweet “Most people don’t know whether they are investing, speculating or gambling, and to the untrained eye the activities are very similar.”]

Transcript

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Resources Mentioned

 

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Episode 6 – Brendan Moynihan – Lessons From What I Learned Losing A Million Dollars

by editor time to read: 43 min
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