QUESTION; Thank you for taking the time to participate in the Q & A session. Before we start in detail. Would you like to share with everyone who may not know, who you are, where you live and what is your current occupation?
JAMES: Thanks for having me. I’m James Vogl and have always lived in London, (there are worse places I guess). I started out as a pro backgammon player, then transitioned to poker in which I was lucky enough to win a World Series of Poker bracelet on my first attempt at 23. This opened the door to switch to another form of gambling – the markets – when Goldman gave me an offer to trade equities. I only spent two years there before moving to the buyside where I worked for two US macro funds (Moore and Graham Capital) as a portfolio manager for the bulk of my career. The past two years I’ve traded for myself and have just finished writing a book called “51% Certain – Risk, Reward and the Pursuit of Edge” which will be coming out soon.
QUESTION: What exactly is your 51% book about?
JAMES: After 20 years as a professional risk taker, I saw so many similarities between the way games players and traders think, in contrast to the layman. So I tried to write a book explaining some of these concepts and thought processes and how they can be applied – from whether to wait for a bus or walk to whether to take our insurance or not. So the book looks at the fundamentals of risk reward to employing strategies and tactics to psychology (eg how to cope with a $50 million swing in a day). But it’s written in a far more street than scholarly tone. There are no academic references just some of the experiences I’ve had playing games and trading and how they may be applied for better or worse.
QUESTION: What’s your take on Covid-19 and how markets play out from here?
JAMES: I know no more than the next man when it comes to Corona so I’m not sure I can add much value on how if plays out from here. But from a macro perspective I’m not too bearish because unlike the GFC I see it as an exogenous event – there is no underlying issue as there was during the credit crunch of 08 say, and (fingers crossed) the crisis will play itself out. That said, it’s like the governments and central banks have gone on stimulus steroids, printing trillions like confetti. We’ve already seen bond yields go negative, oil go negative and their policies will have all kinds of unintended consequences in the years ahead so it’s fascinating from a macro perspective. I’m very long the gold miners as I think they are a clear beneficiary from these policies and very “cheap” here considering gold is near an all time high and the gold producers’ costs are through the floor given the commodity price falls, yet their share prices are still half of their all time high.
QUESTION: What failure/setback have you experienced in your personal life or professional career that has set you up for later success?
JAMES: I’m by no means a contrarian investor, but am going to give you a contrary answer here to kick things off, sorry… I honestly can’t think of a single setback that has set me up for later success. Setbacks by definition SET YOU BACK. I think the “learn from your mistakes” and “what doesn’t kill you makes your stronger” platitudes are drooled out to make people feel better when things aren’t going well – yet the trait I’ve seen from every top poker player and trader, bar none, is an ability to put the inevitable mistakes as far out of your mind as quickly as possible and get on with the next hand/trade. Don’t spend too much time learning from them, forget them and focus all your energy on the things you are good at. Analyse why things went well, and try and replicate the secret sauce. If pushed, I guess not winning a single match on the pro tennis tour when I took a year out to play full-time at 18 was a total failure but allowed me to move on with my life to play in games where I had a chance!
QUESTION: How would you describe what makes a successful Trader as it relates to making correct decisions based on statistical math probabilities.
JAMES: There are by no means just one way to skin a cat, but every successful trader has a good feel for probabilities. Some are more quantitative than others. As an example, a good friend of mine doesn’t even know the Black Scholes formula yet is one of the best options traders you will ever meet – he is totally intuitive, and told me once he feels the market like a heat map. Perhaps there are few “correct decisions” in trading where there can be so much randomness around an uncertain future – but the best traders, as opposed to investors and the general population, are great at having a view on the price rather than having a view.
QUESTION: What do you feel is the role in having a balance all around life in your day to day activities. What hobbies do you enjoy?
JAMES: I am literally the worst person to ask about balance! I do everything to extremes. Not because I have goals and drive, I just get caught up in whatever I’m into and it comes at a big expense for the rest of my life (ask my ex). One thing I am religious about now, and should have been when I was trading 60+ hours a week is to get in at least an hour of fitness a day – running number one for my mind, weights two, yoga three. Hobbies, I’m a voracious reader (fiction as well as non-fic), if that counts as a hobby and still play a fair number of games: backgammon, bridge, poker and gin, but mostly with my kids these days.
QUESTION: You hear all the good and bad stories from people working at Goldman Sachs, Can you share the positives and negatives.
JAMES: Well I only worked there for two years, fourteen years ago. But I doubt much has changed… On the plus side, everyone at MD level or above is just exceptionally brilliant – you don’t get there if you aren’t. On the minus side, they care about business more than people. When I moved to a small commodity prop shop on leaving Goldmans, it was so refreshing to actually work with bosses and colleagues that I consider close friends to this day. Don’t get me wrong, you had to produce, but you were never just a number to them.
QUESTION: What good or bad advice do you hear often in life?
JAMES: For me “the good advice” I hear, or what works for me is to play to your strengths rather than be something you are not; read, read, read; but importantly, just follow Naval Ravikant on Twitter or listen to his Shane Parish interview, “the Angel Philosopher”, he will blow you away if you are not familiar with him. The bad. Well, my favourite quote is “Taylor Swift telling you to follow your dreams is like a lottery winner telling you to go and buy tickets”. “No pain no gain” also sucks – it’s amazing how much improvement you can make in the gym just being consistent working within yourself, and that spills over to any area in my opinion. Run your winners and cut your losses is probably bad advice – you can die from a thousand cuts too!
QUESTION: Where do you see yourself in 5 years?
JAMES: Sorry you’ll have to ask me in five years. I don’t really believe in goals or visions. I do what I’m into at the time (usually lasts for about a 7-year cycle, not sure why), and I end up where I end up. (As an aside, goals have never really worked for me. Any time I set them I usually fail and when I have occasionally achieved them, I am usually left feeling, “now what??”).
QUESTION: When you have lost your mojo or focus, what do you do to get back on track?
JAMES: For me, breaks are the best, (others can work through bad periods), and usually in direct correlation with how much mojo has been lost. Sometimes a walk around the block will do it, sometimes a two-week vacation is needed. But if you keep losing your mojo, again you are probably playing in the wrong game – I don’t think I took more than 10 days off total in the first five years I was a professional games player.
QUESTION: If you could have a big billboard with your favorite saying or message on it, what would it be.
JAMES: “Don’t plagiarize Tim Ferris!” Kidding. Hmmm I guess I can be quite tough on myself, so perhaps: “Look for the best results possible, not the best possible results”.
QUESTION: Thank you for taking the time for our readers to get to know you. How can our readers contact or follow you on social media?
JAMES: Thanks for having me. Market Wizards by Jack Schwager is my favorite trading book of all time by far, and even though I am no wizard, this format has been a thrill. You can find me @jamesvogl on Twitter and I’m actually just putting together the originally titled, jamesvogl.com for my writing related stuff which should be up and running in the next month.
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