“He Fired Me Every Single Day” Daina’s note: Daina Schnese here, managing editor of Trading with Larry Benedict. Welcome, and it's great to have you on board. Over the next two months, we're going to take you on a journey deep into the mind and accumulated wisdom and experience of one of the world's very best traders and hedge fund managers... Larry Benedict. Over a 21-year period when he was actively running money, Larry never had a single losing year. An independent, third-party firm in San Francisco – called Rothstein, Kass & Company – legally audited the results of Larry's fund, Banyan Capital, from 2004 through 2012. They confirmed that Larry and his team generated a total of $274,572,167. During the series, Larry will detail everything from the trading methodology that’s made him a fortune over the years, to stories from the trading pit that you won’t hear anywhere else. Below, Larry gives us a glimpse of getting thrown into the fire on the trading floor… and what it was like getting fired for eight months straight.
Daina Schnese: Let’s talk a little about your early trading career. What got you into trading in the first place? Larry Benedict: I had a friend in college whose dad was a soybean trader on the New York Stock Exchange. I’d go over to his house, and it was seriously the biggest house I’d ever seen in my life. I wanted to know what this guy did for a living… so he took me to the trading floor with him once. I knew then that I wanted to pursue this as a career. Daina: What was your first job as a trader? Larry: In 1984, I was in the pit at the Chicago Board Options Exchange. I worked as a runner and a clerk. As a clerk back then, you would answer the phones, write down orders, and run the orders out to the pit to execute them. And then, you’d go back and report the fill to the customer. Most people did this job for free. But, I was getting paid a little bit. When I first started, I was getting trained by another clerk who also worked for my boss. My boss was a big trader. Anyways, the clerk who was training me said, “Look, you’re going to get fired every day. But don’t listen to it. Come back tomorrow and everything will be fine.” I’m originally from New York. And here I was... 21 years old, in a new city where I didn’t know anyone, and I knew absolutely nothing about my job. Not to mention, I’m being told I’ll get fired every day. Daina: So, did you get fired? Larry: Yeah, on my first day. I didn’t know the ins and outs of working on a trading floor. I was expected to know what I was doing. But I mean, I knew nothing about trading, period. And on the first day, I got thrown right into the fire. I was expected to know what I was doing. My boss was giving me hand signals for what trades to do from the pit, but I knew absolutely nothing. I had all the signals on a sheet they’d give you. But learning the signals was like learning sign language. I’d look up at the screens with the current stock prices, and it looked like scrolling gibberish to me. He really needed someone with much more experience than I had. It was a high-strung and high-intensity environment. And as miserable as it was doing that every day, getting fired and coming back with my tail between my legs, I kept coming back. Daina: What would he say when he fired you? And he didn’t care that you kept coming back? Larry: Well, on the first day when I got fired, what happened was I messed up an order. So, my boss went ballistic, and told me I was an idiot and didn’t know what I was doing, and he fired me. So of course, I’m freaking out. I call my mom and tell her, “Mom, I just got fired. But they told me I’ll get fired every day and to just keep coming back.”
And she goes, “Well, just do what they say then!” So I go back in the next day, and I’m there early. My boss walks in and he’s got a cup of coffee and some McDonald’s, like everything is normal. And he goes, “Hey, how was your night?” He starts asking me what I did last night, and is in a normal, upbeat mood. I’m like, holy cow… this is crazy. Everything really is fine. And then the next day comes around, and he asked me a question about adding fractions together, and I didn’t know the answer, so I guessed. Well, it was the wrong answer. So he went ballistic, and fired me again. Daina: How many times did your boss actually fire you? Larry: He fired me every single day! It went on for like eight months… I couldn’t take it. Daina: Wow, that sounds terrible. Why did you keep coming back? Larry: Yeah, it was miserable. Not a lot of people are built to handle that kind of environment. It was hard knocks. But you learn that way. You get knocked down and get back up, every single day. I loved the energy of it. It was like playing sports every single day. And I had that fire in me. I am extremely competitive, and I do whatever it takes to win. So, getting knocked down wasn’t an issue for me. Plus, I wanted to be him… my boss. And I would look around at all the people working around me. They were so smart and they were making so much money. They were wealthy beyond belief, and I wanted to make money, of course. But I really came back because I knew I wanted to learn from these guys. They were some of the best in the business, and I knew if I stuck it out, I would make a name for myself. Daina: What were these traders doing that was making them so much money? Larry: They were putting profits on the page, every single day. They weren’t going for home run trades each time, like most people assume successful traders do. And that’s what I wanted to learn… taking small profits, every single day, until you have a huge pile of cash. Daina: That makes sense. Still, that’s a tough environment to learn in. While we’re out of time for today, I want to talk more about putting profits on the page next time we chat. Thanks for your time today. Larry: Thanks, no problem. Talk to you soon.
Daina’s note: Keep an eye on your inbox for your next installment of Trading with Larry Benedict this Friday at 9 a.m. ET. Larry will talk about the importance of taking profits as a trader, no matter how small they are. And, he’ll reveal the No.1 pitfall new traders fall into. We hope you enjoy this new project. And if you have any comments, questions, or suggestions about it, please drop us a line at tradingwithlarrybenedict@legacyresearch.com. If this exclusive interview series isn’t for you, simply click this link to opt out now. | 
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