Biff: Gil, thanks for agreeing to
this “interview”. I suspect that Slopers are interested in what
makes the great Giledain tick. What is your language
background, and what was your career before trading?
Gil: Oboy, my
first interview ever! Well, Biff, I came from humble beginnings…
*agent shakes head vigorously*
Aah, er, my aptitude for languages is probably
genetic. Dad was also easily multilingual, taught me Spanish when I was a kid
in NYC. Then came French, when we moved to Belgium. Italian was easy after
that. The military gave me Arabic and, due to my being stationed on Crete, gave
me access to Greek as well. Moving to Sweden brought me into contact with the
Scandinavian languages.
My career before trading was linguistics, teaching at
the local university.
Biff: Do you primarily trade the
American markets?
Gil: I only trade the American markets. Hence the apparent
insomnia: live in Sweden, trade in the US.
Biff: How did your transition from
University linguistics to trading occur?
Gil: My father died and left
some money behind. He had trained me in deep value investing (his father had
been a stockbroker). I couldn't be bothered reading tons of quarterly reports
and so opted for trading.
Biff: Where you prepared to live off the
trading income when you jumped ship?
Gil: Yes. I only jumped ship
after making a bundle during the dotcom craze. That was partly through pure
dumb luck, coupled with a native paranoia and market war stories passed on from
the older generations (see above).
Biff: What's your protocol and procedure
for selecting a trading position?
Gil: I trade NDX options almost
exclusively. They are not as illiquid as folks might think and they keep my
commissions low. My trading positions tend to be spreads on the one side,
hedged by a few long options on the other side. If/when the spread side starts
confirming my directional analysis, I start either hedging the hedge or, less
often, take it off entirely. This usually works like a treat; the few times
I've gotten slammed over the years (eg July 2009) is when I've let conviction
trump discipline and mismanaged the hedge. The trigger for entering these
positions are invariably new highs/lows on the index which exhibit lessening
momentum under the hood.
Biff: How do you determine lessening
momentum?
Gil: I keep it pretty simple.
Among other things, I track the individual performances of the NDX components:
for example, when new highs are made but the number of components closing in
the green drops we usually have a divergence indicating the classic
"momentum high – price high" is in place. If the momentum strength
has been off the charts, I tend to err on the side of caution and await a third
or perhaps even fourth thrust before initiating the spread. Again, recent
exception was July 2009; big mistake. The long option hedge is in place in the
event I am facing a 1999-2000 situation or a shallow correction that soon runs
its course.
Biff: Do you attempt to trade broad
trends, or is your timeframe more limited? Do you have a sense for where the
market is heading?
Gil: I would say my main method
is a combination of trend and countertrend. The long options are not
necessarily there just as a hedge; they are in alignment with the larger trend
and can be used as such. The spreads can be hedged (eg via butterflies) or
pulled or even reversed if the trend reasserts itself with little or no
correction (viz. November 1999, late September 2008). One of the advantages of
this system: flexibility. And your account doesn't get blown to pieces.
I have a sense of where the market has headed in
similar contexts in the past. However, as these contexts rarely get anywhere
near a statistically sound sample (30 data points) I'm open to all
possibilities and pay close attention to my indicators. In other words, I envisage
scenarios but do not presume to guess which one the market chooses in advance.
Except in July 2009.
Biff: You've been trading for a decent
length of time over many disparate market conditions. Which components of your
trading plan (indicators, asset classes, techniques) have
been discarded over this span, besides the deep-value investing?
Gil: Although I do miss it sometimes,
the big component which disappeared fairly early (around 2003) was individual
stock trading. Partly due to an aversion to company-specific risk but mostly
due to my ADD, which gets sorely tested once the trading portfolio starts
moving over ten positions. I'm the exact opposite to Tim Knight in this respect
(winks). As for discarded indicators, all volume-based ones were dropped once I
realized that indices can be bid up on punk volume (at least as reported by the
exchanges) far longer than traditional TA would suggest was reasonable.
Biff: What is your life in Sweden
like? How did you end up living there?
Gil: We expats in Sweden have a
saying about life in this country: we call it living in a giant marshmallow.
It's soft and enveloping but when you try to get out you find it's darned
sticky as well.
I enjoy living here, despite all my grousing. It's
like being in one big small town, stretching from Florida to Texas. Which is
ok, especially if you're raising a family.
I met a cute Swedish blonde in the 'ville (Chersonissos)
while stationed on Crete (Iraklion AS). She convinced me to come home with her.
I was powerless to resist.
Biff: Describe your sleep schedule.
Gil: Gosh, it's five in the morning and I've
been Sloping all night. OK, let's try to get some shuteye.
*Riinng* Hey bro, it's Joel. You gonna show up for
some b-ball tonight?
*Looks at clock. Nine in the morning* Hey, man. Yeah,
maybe. G'nite.
*Riinng* Hej mitt namn är Johan. Jag ringer på
uppdrag av…* No, dude, I don't need more insurance. Hej då.
*Riinng* No I don't need more insurance! Oh, it's the alarm clock. What,
two in the afternoon already?
*Fires up systems* Futures are up. Another day
another dollar. *Sighs*
Biff: What are you passionate about now,
besides trading?
Gil: Sailing. Nothing like flying across the water like
an arrow shot from Apollo's bow!
Biff: So it's sailing, pouch dip
tobacco, and the Slope, eh? Are you an ocean man, and what type of vessel do
you sail? Do you have any grand plans of sailing long distances?
Gil: I sail a Swedish-constructed classic called a
Neptunkryssare. One/two-man crew, built for speed. I would love to
sail long distances but haven't really got the contacts for that. The
Neptunkryssare is a versatile boat but long-distance sailing? Um, nah.
Biff: Everybody has a rosy view of the
future. How do you see the rest of your life unfolding? Any grand plans beyond
what you're currently doing?
Gil: Having a rosy view of the
future is everyone's birthright, Orphan Annie tells us that. But the best I can
do for now is to trot out the old chestnut about "getting better with age,
like fine wine" and hope that is my fate. I come from a long line of men
who stay young way beyond their years but the tooth of time misses no one. I
have no plan for the rest of my life besides the end, where I die rushing down
the wind with the kiss of the sea on my mouth. Oh, and I want to visit the
Arctic, the Antarctic and the Far East and go on a safari. And finish building
that darned Harley. Grandchildren would be nice. And I have yet to taste
Lobster Thermidor. See the Yankees play again. Orbit the earth. In fact, let me
get back to you with a list; this could take some time ;-).
Biff: Who in popular culture represents
your ideal woman?
Gil: Difficult one. If popular
culture means singers and actors who are currently active, I'd go with Jodie Foster. She's
very smart, a talented thespian, girl-next-door cute and personable and… I
don't know if you saw her on Ellen… damned funny!
Biff: Thanks, Gil!
