INTERVIEW
Vetting The Market
Price Headley Of BigTrends.com
by Jayanthi Gopalakrishnan
BigTrends.com founder Price Headley started out to be a veterinarian specializing in horses, but he ended up as a trader, a technician, and an investor. How, you ask? It started with a trading contest - and his life was never the same. Headley has appeared regularly on FoxNews as well as CNBC and Bloomberg TV, and in a variety of national financial media, including The Wall Street Journal, Barron's, Investor's Business Daily, and USA Today. Headley, a graduate of Duke University, is a member of the Market Technicians Association and is also a Chartered Financial Analyst (CFA) charterholder.Headley was ranked in Timer Digest's Top 10 for stock market timing for 2000, and he wrote the Amazon investing bestseller, Big Trends In Trading: Strategies To Master Major Market Moves. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed Price Headley, who speaks regularly to investment audiences nationwide, on April 2, 2003, via telephone.
Tracking the equity curve has been valuable in determining which methods are rewarding and which ones aren't.
How did you get started in trading?
I was at Duke University studying to become an equine veterinarian. My family's been in the thoroughbred horse business for generations. While I was at Duke I participated in a four-month trading contest, using the Warren Buffett approach buying large, blue-chip companies like Coca-Cola [KO] and Gillette [G]. After three months, I was in the bottom third of all contestants and I had a month to go. That's when I realized that something needed to change.
What did you do?
Although this was play money, I started to actively trade every day. This was in late 1988 and early 1989. There were a lot of takeover rumors at that time, so what I did was short a stock for a day that looked like it had been unduly jacked up on takeover rumors, and scalp it back down half a point, and then get back out of that one, and then do it again the next day.
How'd you do?
I went from the bottom third to finishing 140th out of 12,000, which put me in the top 1.5% of all the contestants. In that one-month period I made that turnaround.
That's pretty impressive!
The organizers even sent me a note saying that was the biggest one-month turnaround they'd ever seen anybody make. At that point I thought I had more of an aptitude for the investment game than for the equine vet game, so I switched majors to the closest thing to business Duke had, economics, and the rest is history. I really focused on the markets, read the Journal every day, and started to learn about the markets.
What did you do after you graduated?
I got a job straight out of college with Bernie Schaeffer's group up in Cincinnati, at The Option Advisor as an analyst, and worked with him for nine years. I headed the research department for six of those years, and had a wonderful experience there. That's how I got tuned into options trading. Learning from Bernie and learning some things on my own contributed to my making the move from stock trading to options trading.
...Continued in the June 2003 issue of Technical Analysis of STOCKS & COMMODITIES
Excerpted from an article originally published in the June 2003 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2003, Technical Analysis, Inc.