Summary: Sometimes the most valuable truths about trading are those we don’t want to hear … or accept. In Episode 563 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles talk about the importance of focusing on how to reduce your risk, not making money. If you manage your risk, the money will accrue over time. This is not very sexy news for those who want to “get rich quick” and become overnight successes, but those are the realities of trading. Also in this episode, we receive a question from Dave in Columbus, Ohio, who asks about hedge funds and why so many have closed this year after being so profitable for so long. Dave wants to know why they aren’t profitable anymore. Join us, and we’ll discuss it! Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes and leave us a review. Thank you! Links for this episode: Subscribe to Rob's YouTube channel here: <a href="https://youtube.com/robbooker" target="_blank" rel="noopener">https://youtube.com/robbooker</a> Rob on Twitter: <a href="https://twitter.com/robbooker" target="_blank" rel="noopener">@RobBooker</a> The Traders Podcast on Twitter: <a href="https://twitter.com/traderspodcast" target="_blank" rel="noopener">@TradersPodcast</a> <a href="http://tfl365.com/" target="_blank" rel="noopener">TFL365.com</a> <a href="http://www.traderinterviews.com/" target="_blank" rel="noopener">Trader Interviews.com</a> Be sure to catch up with Scott Welsh at his <a href="https://www.scottwelsh.me/" target="_blank" rel="noopener">Website</a> and at <a href="https://twitter.com/swelsh66%20" target="_blank" rel="noopener">Twitter</a> Jason’s movie podcasts: http://moviepodcast.network/ - A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc. Full Episode Transcript: Jason Pyles: Hey, Rob. One of my favorite things on The Traders Podcast and something I really missed was getting questions from the listeners because I find that these episodes where we're discussing the listener's thoughts and concerns are some of the most insightful, for me at least. Rob Booker: I love it, and I love the episodes where we get comments inside of the show notes, so wait a minute, are you saying you have a question? Jason Pyles: Yeah. Well, there's a question here that comes from Dave from Columbus. Rob Booker: Dave from Columbus. Jason Pyles: Yeah, and Dave says, "Home of the greatest trader in history, Scott Welsh." Rob Booker: Not anymore. Scott lives in Florida now. Jason Pyles: That's funny. He says, "Hey, Rob. I thought that this story might interest you. Apparently several hedge funds have closed this year due to poor performance. I'm curious to hear why you think all these guys who have been elite for so long can't seem to turn a profit in the markets anymore." Rob Booker: Well, fascinating. Yeah. There have been, especially in a year where the S&P 500 is way up, the stock market's way up, it is interesting that hedge funds are down. Like a lot of hedge funds are down. Now not all of them are down, but it is interesting. Jason, it is a quandary wrapped in a paradox. Jason Pyles: Okay. A conundrum within a donut. Yes. Rob Booker: It's a shroud of uncertainty wrapped in creamy filling. Jason Pyles: Yes. Right. Rob Booker: The answer is most of these hedge funds are driven by performance, meaning they are constantly striving for gains, and most of these hedge funds were started, I hate to be so crass, but the reason they started was because someone wanted to make a lot of money. If you just think about it for five seconds, if you build a set of relationships in the world of finance, and then you have the potential to go out on your own and raise 100 million dollars, you're going to do it. It's just going to happen. Finance and arrogance go hand in hand. If you have had one good year,
