Larry Hite Quotes

“Frankly, I don't see markets; I see risks, rewards, and money.”

“I don't trade for excitement; I trade to win.”

“I get real, real concerned when I see trading strategies with too many rules. You should too.”

“I have a cousin who turned $5,000 into $100,000 in the option market. One day I asked him, 'How did you do it?' He answered, 'It is very easy. I buy an option and if it goes up, I stay in, but if it goes down, I don't get out until I am at least even.' I told him, 'Look, I trade for a living, and I can tell you that strategy is just not going to work in the long run.' In his next trade he put his money in Merrill Lynch options, only this time, it goes down, and down, and down. It wiped him out.”

“I have noticed that everyone who has ever tried to tell me that markets are efficient is poor.”

“I have two basic rules about winning in trading as well as in life:
1. If you don't bet, you can't win.
2. If you lose all your chips, you can't bet.”

“I met the guy who wrote this best seller now called, 'Bringing Down the House', it's about these MIT guys who beat the blackjack tables. And part of the problem, if you're going to be a blackjack counter is that the casinos don't like you. They actively don't like you. And they come and tell you in rather strong things to take your business away. Well, the beautiful thing about the markets, they don't like you, they don't dislike you, they just don't care. They are there everyday. You want to play, you can play.”

“I start out with the one thing I can know – how much am I willing to lose?”

“If you argue with the market, you will lose.”

“If you diversify, control your risk, and go with the trend, it just has to work.”

“It is incredible how rich you can get by not being perfect.”

“Never risk more than 1% of total account equity on any one trade. By risking 1%, I am indifferent to any individual trade. Keeping your risk small and constant is absolutely critical.”

“No matter what information you have, no matter what you are doing, you can be wrong.”

“People don't change. That is why this whole game works. In 1637, tulips in Holland traded for 5,500 florins and then crashed to 50, a 99 percent loss. Well, you might say, Trading was relatively new then; these people were primitive; capitalism was still in its infancy. Today we are much more sophisticated. So you go to 1929 and find a stock like Air Reduction which traded at a high of $233 and after the crash fell to $31, a decline of 87 percent. OK, you might say, the Roaring '20s were crazy times, but now things are surely different...”

“Respect for risk is not just a matter of trading; it applies to any type of business decision.”

“The truth is that, while you can't quantify reward, you can quantify risk.”

“There are just four kinds of bets. There are good bets, bad bets, bets that you win, and bets that you lose. Winning a bad bet can be the most dangerous outcome of all, because a success of that kind can encourage you to take more bad bets in the future, when the odds will be running against you. You can also lose a good bet no matter how sound the underlying proposition, but if you keep placing good bets, over time, the law of averages will be working for you.”

“Throughout my trading career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.”

“Wall Street is a great place because never have so many been paid so much for adding so little.”

“We approach markets backwards. The first thing we ask is not what can we make, but how much can we lose. We play a defensive game.”

“We diversify in two ways. First, we probably trade more markets worldwide than any other money manager. Second, we don't just use a single best system. To provide balance, we use lots of different systems ranging from short to long term. Some of these systems may not be that good by themselves, but we really don't care; that is not what they are there for.”

“When a market makes a historic high, it is telling you something. No matter how many people tell you why the market shouldn't be that high, or why nothing has changed, the mere fact that the price is at a new high tells you something has changed.”

“When I first became involved in commodities, I noticed that if you bought pork bellies in September and sold them before July, you almost always made a profit. So I formed a fund with a group of friends, and I put on this trade. It worked. I doubled the money. I felt like a genius.”

“When I get together with other traders and they start exchanging war stories about different trades, I have nothing to say. To me, all our trades are the same.”

“Whenever I go to a money management conference and sit down with a group to have some drinks at night, I always hear the same story: My system worked great, but I just didn't take the gold trade, and that would have been my biggest winner.”

“While the speculator doesn't have the product knowledge or speed, he does have the advantage of not having to play. The speculator can choose to only bet when the odds are in his favor. That is an important positional advantage.”