Building a Team

[get better]

I've recently started a trading group among work colleagues/friends that have an interest in investing/trading for purposes of learning from each other and bounce ideas off each other. One of the big hurdles is that everyone seems to have little understanding of the markets/investing/trading in general. I've taken it upon myself to educate everyone to get everyone on the same level so we can actually have some constructive discussions about investing/trading.

One of the things I'm cautious about is maintaining everyone's level of interest at a high level. I must also admit that 99% of people I speak to about stocks is more on the skeptical side and often regard the stock market as "gambling" - I've been lucky enough to sort through all these people and pick out individuals with open minds and a keen initial desire to learn more.

I was curious to hear how others have fared with activities like this, especially the veterans on their experiences and traps/pitfalls to look out for.

 

[tech/a]

Learnt very quickly that friends / family / and trading don't mix.

90% of my friends don't know I trade
I don't advise or discuss with family.

My advice is to keep it on a forum.
If your successful keep it to yourself
Do your best to avoid sharing your expertise with " Friends and Family"

Even a small loss and you'll look like a " d head "
You'll spend the rest of your life as a gambler to
The un initiated.

Enjoy

 

[Wysiwyg]

When members start losing money or are underwater for extended periods, the excitement will wane. On the upside, 10% of the members might be successful.

 

[pixel]

Totally agree with tech/a.

Another No-No I found out (the hard way): Don't try to "educate everyone to get everyone on the same level". That won't lead to "constructive discussions", but more likely to your pupils trying to second-guess what you may think about a stock. Almost like you talking to yourself.

Forums aside, where everybody comes with a different background, education, mindset..., I have been involved with two trading groups:
1. In the time after attending a popular and intensive Training Course, a group of like-minded people decided to stick around and meet weekly at first, fortnightly later to discuss ideas, methods, technical interpretations. In between meetings, we stayed in touch by email and in a casual chat room.
2. The chat room, set up to accept members only, gradually replaced/ made unnecessary the meetings in person. It also led to like-minded traders from Interstate being invited to join. At its heyday, we had about 20 members, not all of whom would be online all the time. The GFC caused more than half to drop out, most of the leavers gave up trading altogether and decided to "live off the proceeds". Meanwhile, we're down to a hardcore of 4-5 regulars, who share watchlists, opinions, and alerts - even though each of us may trade different time frames and even instruments - from small-caps to blue chips to long and short MINIs ...

PS: Wysiwyg makes also a valid point about group members losing out. Most people will happily continue to apply what they have learned and understand. If conditions change and their "method" turns from money-spinner to money-pit, many will give up, rather than go through another round of education/ adjustment. More often than not, well-intentioned suggestions that they should adjust - even giving concrete pointers where I thought they were stuck in a rut - has broken friendships.

 

[peter2]

Be prepared for a very tough battle. Honestly the market behaves much more rationally than a group of people. Groups like this tend to dominated by the beliefs of the strongest (loudest) personality, even if those beliefs are unhelpful.

If they believe that it's gambling, you'll have a hard time changing that.
If they believe that it's all too hard. It will be for them.
If they believe a person can't be profitable. They won't be.

To tech/a: Give a few expensive gifts and they'll soon ask how's the market lately and they'll mean it.

What was the old StockCentral" line you give strangers when they ask what you do. Was it a Volkswagon mechanic, and they walk away satisfied but with no further questions.

Now get a few traders together that have had their egos modified and you might have a better group dynamic as pixel has mentioned.

 

[Smurf1976]

Groups like this tend to dominated by the beliefs of the strongest (loudest) personality, even if those beliefs are unhelpful.

Teams 101 - avoid group think, noting that if you don't actively seek to avoid it then group think is what you'll most likely end up with. If everyone always agrees then that's not a good sign. All it means is that most have stopped seriously thinking.

 

[get better]

Thanks for the insight everyone.

The very first group I originally started was with a group of friends. I quickly found out that I was doing all the talking and decided to drop the group, no hard feelings, no broken egos (got lucky I guess).

This second group I'm putting a bit more effort in and have spent time scouting the members out before inviting them to join. This time around, I'm setting the expectation up front, I expect a level of contribution from everyone once we get started, if not then you're out. Point noted about things going sour - I will draft an exit plan and criteria that need to be satisfied that I'll spell out up front (managing expectations).

Group think is an interesting topic - this applies everywhere, not just in this example. It's particularly evident in the work place - especially with groups of brown nosers/suck ups. Best thing is to form your own opinion and have constructive discussions with an open mind but that is difficult to achieve.

 

[DaveDaGr8]

I've been involved with a few "Coffee" club meetings in Melbourne.

Unfortunately some die hards start pulling out charts and before you know it they start preaching.

We attempted to set up a more structured setting, President, secretary etc but too many egos meant that people wanted the job, but not do the work or take on the responsibility.

Would love to try again one day. It was great for learning

 

[blaze182]

I've recently started a trading group among work colleagues/friends that have an interest in investing/trading for purposes of learning from each other and bounce ideas off each other. One of the big hurdles is that everyone seems to have little understanding of the markets/investing/trading in general. I've taken it upon myself to educate everyone to get everyone on the same level so we can actually have some constructive discussions about investing/trading.

One of the things I'm cautious about is maintaining everyone's level of interest at a high level. I must also admit that 99% of people I speak to about stocks is more on the skeptical side and often regard the stock market as "gambling" - I've been lucky enough to sort through all these people and pick out individuals with open minds and a keen initial desire to learn more.

I was curious to hear how others have fared with activities like this, especially the veterans on their experiences and traps/pitfalls to look out for.

->

Learnt very quickly that friends / family / and trading don't mix.

Pretty much.

 

[stevealimore]

Learnt very quickly that friends / family / and trading don't mix.

90% of my friends don't know I trade
I don't advise or discuss with family.

My advice is to keep it on a forum.
If your successful keep it to yourself
Do your best to avoid sharing your expertise with " Friends and Family"

Even a small loss and you'll look like a " d head "
You'll spend the rest of your life as a gambler to
The un initiated.

Enjoy

+ 1

 

[minwa]

Learnt very quickly that friends / family / and trading don't mix.

Not always.

Taught my brother and now he is my risk manager so I don't abuse the leverage revenge trading. I break preset
rules sometimes - when I do he can close the positions down. He can monitor positions when I am on the plane or a night out so I don't have to keep watching the phone.

Taught my best friend, now we have imroved our strategies. We do very similar trades and it is much more helpful when we have 2 sets of eyes watching the market. We love trading near the US Friday close so sometimes when theres signal and one of us fell asleep/alarm didnt wake up we call each other.

I would've been very lonely as a trader and less successful without these 2.

 

[Value Collector]

If your successful keep it to yourself
Do your best to avoid sharing your expertise with " Friends and Family"

I agree wholeheartedly, It took me a while to learn that lesson.

 

[The Falcon]

Depends on your friends I suppose. Of my close friends two of them have an interest business and investing, We will often talk over ideas over a schooner or six. Outside of those two, yeah the pool is very limited. As far as setting up some kind of investment club, because there are so many ways to participate in the market, its critical that participants have a broadly similar interest / outlook. Value investors can work well together working though thesis ideas while chartists can no doubt draw on each others experience and interpretations, put them in the same group however and it probably wont work overly well