INTERVIEW
by Thom Hartle
ILLUSTRATION BY CARL GREEN
When you look at great traders, they have the discipline to continue to do all the necessary hard work. It's not just a one-shot thing -- you have to work at it day in and day out. -- Courtney Smith
So when did you start in the business?
I started trading in the early 1970s, around the time that the International Monetary Market started up on the Chicago Mercantile Exchange (CME). In fact, some of my early trades involved making a market in currency spreads. I was one of the few people looking at the carrying charges in the currencies, and I made a market from off the floor. It was a bit tough because back then, commissions were around $60 on spread transactions.
I'm sure your broker didn't mind. What did you do after that?
I primarily traded my own account. Around the mid-1970s, I formed a money management company with Jack Grushcow. It was called Grushcow and Smith, and we managed futures money. We did that for several years from Vancouver, British Columbia. Then in 1980, we split up and I moved back to the United States.
Is that when you went to work for Paine Webber?
Yes. I was director of futures research at Paine Webber. Later, I went to work on Wall Street for a boutique firm. During 1987, I was the head of the derivatives operation at Banque Paribas, the French bank. I did that for two years and then I was treasurer of the Swiss bank BSI, until it was taken over by Swiss Bank Corp. In 1990, I set up my own company, Pinnacle Capital Management, which I operated until just very recently, when I joined Orbitex Management, which is a mutual fund and hedge fund company. While I was running Pinnacle in 1993, I was also chief executive officer of futures broker Quantum Financial Services, which was later taken over by ING Bank.
Sounds like you've kept pretty busy. You've also done some writing?
That's right. I wrote my first book on futures, Profits Through Seasonal Trading, in 1979, with Jack Grushcow. In 1982, I wrote Commodity Spreads, which is still the only book, to my knowledge, with econometric models for spread trading. I wrote How To Make Money In Stock Index Futures in 1984, and Options Strategies in 1987, and I did a second edition of the seasonal book in 1987 as well, and then last year, a second edition of Options Strategies came out. I stopped writing because when my first book came out, there were few resources. Today, it seems as though there must be six books a month being published on trading.
You're also editor and publisher of Commodity Traders Consumer Report?
Yes. In 1995, Bruce Babcock was looking to sell CTCR and I loved the product so much, I decided that I would step in and buy it.
Do people trade to make money, or do they need to be right? Most people don't make money in trading because they would rather be right than make money.Excerpted from an article originally published in the November 1998 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 1998, Technical Analysis, Inc.
