Lessons from Wall Street’s Champion Day Trader: Buzzy Schwartz
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Today I want to talk about the fantastic trading book written by the infamous Martin “Buzzy” Schwartz, called Pit Bull.
If you haven’t read Pit Bull, “Lessons from Wall Street’s Champion Day Trader”, then you need to get your hands on a copy ASAP.
Not only is it full of interesting, valuable and practical trading wisdom, but it is also one of the most entertaining trading books I’ve ever read.
Marty’s writing style reminds me a lot of Hunter S. Thompson, one of my favorite authors of all time.
He’s fast-paced, witty, humorous, colorful, clever, and not afraid to tell it how it is straight-up without sugar coating his words.
I’ve read a lot of books about trading and investing, and the vast majority of them I wouldn’t describe as exciting. There are some phenomenal books out there that will teach you, inspire you, motivate you, and help you on your path as a trader.
But there are very few financial books that I would say also entertain and excite you. This is one of them.
Pit Bull lays open Marty’s life – the good, the bad and the ugly of his trading career. It explores the dizzying heights he reached, as well as the worst mistakes and lowest of lows.
He reflects deeply and honestly on the techniques he used to generate hundreds of millions of dollars out of the U.S. stock market, as well as his biggest blunders.
This link will take you to Amazon and if you use it I get a small commission at no extra cost to you if you like these blog posts and want to support my work. If you don’t like my blog posts then buy the book somewhere else – just make sure you buy it!
Pit Bull is a fascinating insight into the world of high-stakes trading, especially back in the days when markets were just beginning the transition into the digital age.
I don’t have much else to say except you’ve gotta read this book. Even if you’ve read it before, read it again. It’s a genius book. If we’re lucky, maybe someday Netflix will make a movie out of it.
I’ll leave you with an out-of-context snippet of the book to give you a feel for the intensity and excitement of Marty’s writing:
Ding. There was the bell. The market was open. “Marty!” Debbie screamed into the phone, “Shearson just came with an order for a thousand contracts to sell, at the market!”
“Quote! Quote! Dammit, gimme a quote!”
“Offered at 240!”
“Shit, it closed at 258! What the hell’s going on? Lemme think! I gotta think!”
How much was I ahead? A twelve lot short at 255, now offered at 240. Twelve times five hundred times the fifteen-point profit equaled $90,000. “Marty! Offered at 230! Offered at 225!”
“The size! What’s the size at 225?” At this price, I stood to make $180,000 if I could cover my twelve lots short. “What’s the size?”
“Marty, there’s no bids, I dunno! 220! Offered at 215!”
Holy shit. What the fuck was happening? The bottom was falling out of the S&Ps. Nobody was making a bid. In over five years of trading S&P futures I’d never seen this before.
“210! 205! Marty, there’s a fill at 202!”
“The size? What’s the size?”
“I dunno, I missed it! 200! Another fill at 198!”
“COVER!!!” I shrieked. The boys in the pit were starting to buy. “Cover the twelve lot, and input it into the clearinghouse right away. I don’t want those bastards ripping up my tickets!”
With the market moving like this, it wouldn’t be unusual for the boys to conveniently forget about a few of their trades. “GO!” Click.
I turned to my screen. The 202 was just coming up, then the 200. Then a 198, 197, 195. Wait a minute! 197. 200. 204.
The market had turned around. But that was alright. I had to be covered at no worse than 200. What a killing!
Ring. “Debbie! Debbie! DO YOU HAVE THE TRADE?”
“Marty! I got five filled at 200, but they won’t give me the card on the other seven!”
“Where are they now? 210? They’re moving so fast, if they’re not gonna give you the card at 200, buy another five at the market! NOW!”
Those fucking bastards. They’d buried my order to cover on the other seven. They’d just ripped me off for at least ten points on seven contracts, $35,000 at least, maybe more.
Ring. “Marty, I got five more filled at 210, and the last two at 215. It was the best I could do. They’re ratting out on trades left and right.”
I was shaking. I didn’t know whether to be happy or pissed. I’d made $290,000 on the twelve lot (5 x 500 x 55 points in profit, and 5 x 500 x 40 points), and the boys at the Merc had taken about $50,000 in “slippage”.
Two hundred and ninety thousand dollars on a twelve lot! That was unbelievable. What the hell had happened?