* Maybe this blog should change its name

August 13, 2009

WallStCheatSheet ran this interview with former ML pitcher, now stock trader Todd Stottlemyre. With all the noise about steroids and Bernie Maddof, perhasp its time to think about the branding image they’re putting out.

Damien: Since you were never pigeonholed as “Todd the baseball player” or “Todd the student,” when you moved through your baseball career in college and the pros, did you always have an eye on what you’d do when your playing career ended?

Todd: I’d like to say yes, but I did not. Until I was a senior in high school I was just participating in sports and being a kid. Then, when I was a senior in high school, my baseball career clicked. For the first time I thought, “Maybe I can play for the biggest stage someday …” That day arrived when I signed my first professional Major League Baseball contract with the Toronto Blue Jays. A very close friend of mine used to babysit me in New York when my dad was playing for the Yankees — a guy by the name of Frank Ayello. Frank had worked on Wall Street. When I signed with the Blue Jays and got a little bonus money, Frank managed it. Frank helped me manage my money during my entire career.

The first stock we ever bought was Pepsi. It went up from 30 to 100 and split three-for-one that year. I thought, “Wow! How did that happen? I want to figure that out!” [Both laugh] The issue wasn’t the return because we only had a few shares. It was a game in itself to me.

So, I began to study the market. It was a home study for me. I didn’t advertise it — I just did it. I studied securities analysis, the Graham and Dodd books, Warren Buffet, Peter Lynch, and Jesse Livermore. I studied the Market Wizard books and wanted to understand what traders were looking at. I wanted to know the difference between an investor investor and a trader. So, I continued to read business book after business book and Wall Street book after Wall Street book. As I made more money during my baseball career, I became more active in the market — for better or worse.

You can read all the books you want and do all the studying you want, but you won’t truly learn what discipline means until you are physically trading and investing. That’s when you learn how to invest or trade to fit your personality. That’s when you set yourself up to be successful.

There are many different ways to trade and invest. However, I say this all the time: If you watch a Major League Baseball pitcher every night, everybody’s motion is different. Whether it’s slightly or dramatically different, it’s different. Everybody throws a different type of fast ball, a different type of curve ball. No two sliders are the same from one guy to the next. However, you can take two guys and get similar results even if they throw with different hands or varying speeds. Same thing in markets. You can have strategies from A to Z. You might be a quant, an investor, a technical trader, or a fundamental trader. All those people can have success using different strategies.

Success depends on discipline. Do you fit with your discipline? Do you cut your losses and write them down? At the end of the day, it comes down to discipline. I learned my discipline on the baseball field. It took a long time. In a sense, I learned how to be a trader from being a pitcher. As a pitcher I had to understand preparation: What hitter was I going to face? What were his strengths? Where were his aggressive swings in the strike zone? What were my strengths? Was I willing to match my strengths against his strengths? The answers to your questions depend on the type of game you are playing. In trading, we look at different stocks, indices, and ETFs. We ask, “Where are they strong? When are they strong? When are they weak? When should you be short? When should you be long?” The key to my success has been preparation, strategy, and discipline.

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