TTU27: Magician-turned Trader: “Reality Doesn’t Matter” ft. Scott Foster of Dominion Capital Management – 1of2
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 1 September 2014
⏱️ 83 minutes
🧾️ Download transcript
Summary
Our next guest was a philosophy major and a magician before he ever considered trading in the stock market. In Part 1 of our talk, he describes how philosophy and psychology determine his firm’s decisions and the story of how he started trading in a small town in Pennsylvania.
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In This Episode, You’ll Learn:
- On the 20th Anniversary of Scott’s firm, he looks back on how it all started.
- Scott’s life as a magician and how the principals of magic influences his perspective on trading and the market.
- How he became a philosophy major and how he applies philosophy to trading and everything his firm does.
- How he started trading in the market, getting a group of his college friends to take out cash advances on their credit cards and investing it.
- The Austrian perspective on economics that his college was well known for.
- How he educated himself in futures trading and invested long before he ever met another trader.
- Scott’s initial lessons learned from trading in the stock market; how he lost almost all of his capital in one day and had the first sleepless night of his life.
- How he made the mistake of investing in coffee and cocoa in the late 1980s and what he learned from that experience.
- How he started his first firm in 1989.
- How Scott traded while living in rural Western Pennsylvania.
- How a philosophy major with no connections to the financial world used his network to find a mentor.
- The story of Scott becoming a principal at one of the biggest short-term CTAs in the world.
- The story of Dominion Capital Management, which he started in 1994 by moving to Chicago.
- Why he is based in Traverse City, Michigan.
- How his firm is a bit different and why they don’t have any mathematicians or scientists on their team.
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Resources & Links Mentioned in this Episode:
- Learn about the Square of Opposition that Scott explains in the episode.
- In Scott’s first job at a firm, the company hired people belonging to Mensa.
- Learn about how trading was conducted and firms operated before the use of personal computers and the Internet. Scott’s firm had a VAX computer.
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Transcript
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| 0:00.0 | You're listening to Top Traders Unplogged, episode number 027 with Scott Foster, founder and president of Dominion Capital Management. |
| 0:09.3 | This episode is sponsored by Saxo Bank. |
| 0:12.6 | Imagine spending an hour with the world's greatest traders. Imagine learning from their experiences, their successes, their successes, and their failures. |
| 0:22.6 | Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world, |
| 0:28.6 | so you can take your manager due diligence or investment career to the next level. |
| 0:33.6 | Here's your host, veteran hedge fund manager, Niels Kastrop Larson. |
| 0:48.7 | Welcome to another episode of Top Traders Unplocked. |
| 0:50.7 | Thanks so much for tuning in today. |
| 0:55.4 | I know how valuable your time is, so I appreciate you spending some of it here with me. On today's show, I'm talking to Scott Foster, founder and president of Dominion Capital |
| 1:02.1 | Management. Scott is the first person that I've come across who managed to combine elements |
| 1:08.5 | from philosophy, psychology, and magic into a disciplined trading strategy |
| 1:14.7 | which focuses on finding the universal truth in human behavior and apply them successfully |
| 1:21.8 | in the financial markets. This is truly an educational journey which keeps surprising right to the end. |
| 1:30.0 | And for those of you who are new to the show, I just want to let you know that you can find all of the show notes, including a full transcript of today's episode on the top traders onploc.com website. |
| 1:47.0 | Now let's get started with part one of my conversation. I hope you will enjoy it. Scott, thank you so much for being with us today. It's |
| 1:58.3 | great to have you here. It's good to talk with you, Niels. |
| 2:01.9 | Fantastic. Now, the first thing I noticed in preparing for our conversation today is, in fact, |
| 2:08.0 | that you're celebrating your 20th anniversary as a firm. So let me start by congratulating you |
| 2:14.0 | on a very big milestone in a business where only few firms can say that they |
| 2:19.9 | have successfully been navigating the financial markets for two decades. |
| 2:24.6 | Well, thank you. |
| 2:25.1 | I didn't think we'd make it at times. |
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