Monday, March 04, 2013

Market Wizard, Vic Sperandeo interview: gold, inflation, and trading the QE wave

Trader, author, and Market Wizard, Victor Sperandeo joins us for an exclusive interview in our first Finance Trends podcast. To say we caught a lucky break with our first guest is a bit of an understatement. 

Victor is a highly regarded veteran trader who has been involved with the markets since his first job as a Wall Street quote boy back in 1966. When he began his independent trading career in 1971, his primary goal was to make money consistently, month after month, year after year. 

After 40+ years of consistent profitability, I'd say he's met that goal. 

Over the course of his career, Vic has traded independently, managed hedge funds and CTAs (commodity trading advisors), and ran portfolios for George Soros and Leon Cooperman. He has also written three books on trading, including, Trader Vic: Methods of a Wall Street Master, a personal favorite which interlaced Vic's trading insights with sections on Austrian economics and personal psychology!

In this rare, hour-long interview you'll hear "Trader Vic" discuss his recent editorial on Paul Krugman (a "political hack") and our debt problems, the Fed's quantitative easing program and prospects for future inflation, his outlook on gold prices, Austrian economics and economic and personal freedom (or lack thereof), as well as his insights on successful trading and the importance of trading psychology. 

Plus, you'll hear about the upcoming Trader Master Class with Vic in New York City (more info below).

Some highlights and quotes from our interview with Vic Sperandeo

On gold prices: "What gold doesn't like is higher didn't do well from 1982 to 1999. Gold likes chaos and it likes inflation. With every central bank in the world inflating, long-term, gold is a buy. Short-term, there is someone putting pressure on the gold market. I believe it's the Fed or banks working through the Fed to keep gold prices down and to make money-printing policies more acceptable."

The effects of Quantitative Easing: "QEs have not worked to the degree that most people have assumed they would because nobody is spending the money. Money velocity (the turnover of money in the system) hasn't sped up to a degree that would create runaway inflation... and banks aren't making loans of any consequence. What it's doing [with the mix of current, offsetting fiscal policies] is slowing the economy and distorting the markets as people are putting their money in stocks, thinking that this is good for corporate profits."

Vic's insights on trading and the need for emotional discipline: "Sometimes the smartest people and those who have biases, like yours truly, can cost themselves money. You try to eliminate your biases. In my case, I'm biased against believing in the Fed and in Ben Bernanke knowing what he is doing. But that doesn't subtract from trading - if you're trading you really don't care what Bernanke knows or doesn't know [set aside your biases]." 

Investing vs. trading in 2013: "We're not in a real good investment environment here. We're in a very good trading environment and a great liquidity environment. If you're a trader, you should be doing well following the uptrend in stocks because of QE. If you're taking bigger positions and you're betting on longer-term growth, there's where the differences lie and you have to be very careful. Trends and the technicals trump the fundamentals here [in a Fed-driven market]." 

How crucial is psychology in trading and in life?: "The fact is you can train a number of people to do the same thing and you get different results. Why is that? The difference is emotions - it's psychology. The problem is not in the knowledge, it's in the execution. Very few people can discipline themselves to execute the knowledge. It takes emotional discipline." 

Trader Vic Sperandeo

Victor Sperandeo will be sharing his global macro outlook and his trading techniques with a select group of participants in an upcoming (March 22nd) Trader Master Class in New York City. You can learn more and sign up (class size is tightly limited) at the link above. 

I hope you enjoyed listening to this interview half as much as I enjoyed doing it. If you'd like to help us spread this discussion to more listeners, please share and retweet this post with your friends and readers via our ShareThis buttons Thank you for reading, and visit often.

Related posts

1. Inner Voice of Trading: a lesson on ego and risk.

2. Ray Dalio: Lessons from Hedge Fund Market Wizards

3. Lessons from Hedge Fund Market Wizards: Steve Clark .

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