Book Review: Inside the Mind of the Turtles

Behold the turtle. He makes progress only when he sticks his neck out.
— James Bryant Conant

I didn’t have high expectations when I requested a review copy of this book by Curtis Faith because I hadn’t heard about the author or the reportedly famous group of traders called the Turtles. However, I was intrigued by the subtitle — How the World’s Best Traders Master Risk. Even though I’m not a trader and probably never will be, understanding risk is critical for long-term investors as well. In fact, investing is all about managing risk — returns are not under the control of investors but managing risk is.

The book starts off promisingly enough by breaking down the definition of risk into its components — Uncertainty, Consequences and Exposure and doing an admirable job of explaining each with examples and anecdotes. The author then lays out the seven rules for mastering risk and uncertainty:

1. Overcome fear
2. Remain flexible
3. Take reasoned risks
4. Prepare to be wrong
5. Actively seek reality
6. Respond quickly to change quickly
7. Focus on decisions, not outcomes

The focus in the book is on how each rule applies to trading but it isn’t a stretch to see that these rules apply to investors as well.

Unfortunately, after the first few chapters, the author strays far from the script and takes a lengthy detour into how entrepreneurs and emergency room doctors handle risk, Mr. Faith’s opinions on education etc., liberally sprinkled with anecdotes from his experience as a trader and entrepreneur. Some may find the diversions pleasant but I found it hard to stay focused on the topic at hand.

Bottom line: This book is like the proverbial curate’s egg — very good in some parts and, though never bad, quite tedious at others. Published by McGraw-Hill, it is listed at $27.95 US and is available from Amazon.ca (non-affiliate link).

Other reviews: Michael James on Money liked parts of the book. Canadian Financial DIY gave it 3.5 stars out of 5 and is conducting a giveaway.

PS: This and That will return next week. Have a great weekend everyone!