Street Stories: Managed Futures
Larry Hite is profiled in Market Wizards
We approach markets backwards. The first thing we ask is not what can we make, but how much can we lose. We play a defensive game.
Larry Hite
Former Profession: I was a rock promoter in college, and on one weekend, there were three separate shootings in clubs at which the groups I managed were working. I decided it was an opportune time to change careers and pursue my true interest--the financial markets. I didn't have any idea how to look for a job in that field, so I decided I would start out as a stock broker.
Q. How did you first get interested in the markets?
A. When I was in college, I took a business course with a professor who had a trenchant sense of humor. To give you an example, he also worked as a bank examiner. One day, before leaving the bank following an audit, he turned to the bank president and, as a joke, said, Got you! The man had a heart attack on the spot. After that, they did another audit and found that the bank president had embezzled $75,000. Anyway, in class one day, this professor is reviewing all the financial instruments: stocks, bonds, and so on. Then he says, Now we come to the craziest market of all--commodities. These people trade on only 5% margin--and most of them borrow that. The whole class laughed, except me. For some reason, the idea of trading on 5% margin made perfect sense to me.
Source: The Market Wizards by Jack Schwager
