Richard Dennis
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Richard J. Dennis, a former commodities speculator known as the "Prince of the Pit,"[1] was born in Chicago, in January, 1949. In the early 1970s, he borrowed several thousand dollars and reportedly made $200 million in about ten years. He incurred significant losses in the stock market crash of 1987, and retired from trading for several years.[2] He has been active in Democratic and Libertarian political causes, most notably in campaigns against drug prohibition.[3]
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[edit] Career
He became a Chicago Mercantile Exchange runner at age 17. A few years later, he began trading for his own account at the MidAmerica Commodities Exchange, an entry-level floor where "mini" contracts were traded. He met with great success, buying new highs on the week and month in trending inflationary markets of the 1970s, and soon purchased a full seat at the vastly more expensive Chicago Board of Trade. As a runner, to work around a rule against traders under the age of 21, he hired his father to trade for him.
Dennis graduated from DePaul University with a BA in philosophy. He had accepted a scholarship for graduate study in philosophy at Tulane University, before changing his mind and returning to the Chicago Board of Trade.
Much of his early success involved trend following during the "Great Russian Grain Robbery" when the U.S government secretly agreed to sell grain to the Soviet Union, thus driving up prices over an extended period.
In contrast to the vast majority of floor traders, who quickly "scalped" trades and in so doing, offered liquidity to the markets, Dennis sought to hold positions for longer periods. He traded commodities from the floor like institutional mutual fund managers invest in securities -- riding out short term fluctuations and instead of scalping, holding over the intermediate term to capture significant moves. Dennis often pyramided his positions. In time he realized that moving off the floor would enable him to monitor more markets with more comfort, and he opened an office at 141 West Jackson.
Dennis believed that successful trading was an activity that could be learned, rather than an innate ability. To settle this dispute with William Eckhardt, a friend and fellow trader, in 1983 Dennis recruited and trained 21 men and 2 women[4], in two groups, one from December 1983, and the other from December 1984, who both became known as the "turtles." The program with the turtles ended in 1988. Many turtles have gone on to successful careers as commodity trading advisors.
During the Black Monday stock market crash of 1987, he reportedly lost $10 million[5] and a total of $50 million in 1987-88.[2] In 1990 his firm settled investor complaints for over $2.5 million, without admitting any wrongdoing.[6]
Dennis has published op-ed articles in The New York Times, The Wall Street Journal, and the Chicago Tribune. He is the president of the Dennis Trading Group Inc. and the vice-chairman of C&D Commodities, a former chairman of the advisory board of the Drug Policy Alliance, and a member of the Board of Directors of the Cato Institute.
[edit] Published works
[edit] See also
[edit] References
- ^ Bauer, Douglas (1976-04-25). "Prince of the Pit". The New York Times Magazine. p. 200. http://select.nytimes.com/gst/abstract.html?res=FA0712FB385A1A7493C7AB178FD85F428785F9. Retrieved on 2007-02-05.
- ^ a b Koepp, Stephen (1988-10-17). "Special Report: The Crash, One Year Later". Time. http://www.time.com/time/magazine/article/0,9171,968706,00.html. Retrieved on 2007-02-03.
- ^ Goldberg, Carey (1996-09-11). "Wealthy Ally for Dissidents in the Drug War". The New York Times. http://query.nytimes.com/gst/fullpage.html?sec=health&res=9B0CE7DF1E3BF932A2575AC0A960958260. Retrieved on 2007-02-05.
- ^ Turtle Article - background
- ^ Flynn, Julia M. (1987-10-28). "MARKET TURMOIL; Trader's Survival Lessons". The New York Times. p. D 11. http://select.nytimes.com/gst/abstract.html?res=F40714FF3F590C7B8EDDA90994DF484D81. Retrieved on 2007-02-05.
- ^ Reuters news wire (1990-11-02). "Judge Approves Dennis Pact". The New York Times. http://query.nytimes.com/gst/fullpage.html?res=9C0CE3DB1639F932A15752C1A966958260. Retrieved on 2007-02-05.
[edit] Further reading
- Schwager, Jack D. (1993). Market Wizards: Interviews with Top Traders. p. 85: Collins; Reissue edition. ISBN 0-88730-610-1.
- Faith, Curtis M. (2007). Way of the Turtle:The Secret Methods that Turned Ordinary People into Legendary Traders. McGraw-Hill. ISBN 0-07-148664-X.
- Covel, Michael W. (2009). Trend Following (Updated Edition): Learn to Make Millions in Up or Down Markets.. FT Press; 1 Updated Edition. ISBN 0-13-702018-X.
- Covel, Michael W. (2009). The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires.. Collins Business. ISBN 0-06-124171-7.
- Collins, Art (April 2005). "Interview: Richard Dennis". Stocks & Commodities magazine.
[edit] External links
- Street Stories
- Businessweek Profile, Rich Dennis: A Gunslinger No More, June 4th, 1997.
