After reading the comments, questions, and arguments in response to my AI tweets, I’m more excited than ever about the opportunities AI will create.
While everyone is distracted trying to take the lazy way out with black-box systems, I’ll be doing what has worked for me for four decades—a timeless approach that will work better than ever as more traders crowd into AI-driven models, leaving skill-based strategies less crowded and less efficiently priced.
One theme shows up over and over in the Market Wizards interviews and in the old Livermore stuff.
The money isn’t in constant activity. It’s in waiting for the few situations that actually deserve risk, and being willing to idle inbetween.
Livermore put it as sitting tight. Thinking got him into the trade. Sitting is what paid. He also called out the Wall Street fool who thinks he has to trade all the time, like he’s punching a clock for daily wages. That urge for constant action, even among pros, is where a lot of the damage comes from.
Jim Rogers said it almost bluntly in Schwager’s Market Wizards. "Do nothing, absolutely nothing, unless there is something to do. Wait until the money is lying in the corner and all you have to do is pick it up. Do nothing in the meantime."
Soros and Druckenmiller are the other half of the same idea. When conviction is actually there, you don’t nibble. The point is that great opportunities are rare enough that when they show up, sizing like it’s just another day wastes the whole reason you waited.
That combination is what most people get backwards.
They can’t stand the empty stretch, so they manufacture trades to feel productive. Then when a real A+ finally shows up, they’re either already chopped up, or they size it like every other opp because they’ve trained themselves to treat all activity as equal.
I’m still working on this. Inactivity is still hard. Comparing to other people’s activity sometimes still makes me feel like I’m behind. The useful response for me isn’t “find something.” It’s check the criteria, and if nothing qualifies, stay in cash.
The wizards weren’t romanticizing boredom- they were describing the job. Most of the time you are supposed to be doing nothing. The work in between is studying, waiting for your pitch. The trade is the exception.
If that feels lazy or unproductive: good. That discomfort is usually the signal you’re about to force something.
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Jesse Livermore (as Larry Livingston in Edwin Lefèvre, Reminiscences of a Stock Operator, 1923)
“It was never my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!”
“The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.”
“There is the Wall Street fool, who thinks he must trade all the time.”
Jim Rogers (Market Wizards, Jack Schwager, 1989)
“One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do… I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up… I do nothing in the meantime.”
Stanley Druckenmiller (The New Market Wizards, Jack Schwager)
“Soros has taught me that when you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig.”