Can Investing Be Learned Through Education?
Turtle Trading: Investors Are Made Through Education
In 1983, Richard Dennis and William Eckhardt conducted an experiment.
Two Friends' Debate and Experiment
Richard Dennis was an investor who started investing at 17 and turned 16,000 dollars into 200 million dollars in 10 years. He constantly argued over one question with his school friend and business partner, William Eckhardt.
Eckhardt: "Investing skill is something you are born with" Dennis: "If taught properly, anyone can invest well"
To settle this debate, Dennis proposed an experiment. He placed ads in The New York Times and The Wall Street Journal and recruited 23 ordinary people. They were called the "Turtles."
14 Days of Training and Remarkable Results
The 23 recruits were people with no connection to investing, such as computer programmers, farmers and security guards. Dennis trained them for just 14 days and then gave them real money to invest.
Results:
- Jerry Parker: 128.87% return in 1985
- Howard Seidler: 100.16% return in 1985
- Jim DiMaria: 131.68% return in 1986
- Curtis Faith: earned 31.5 million dollars in profit for Dennis
Ordinary people with no investment experience at all achieved remarkable results. Dennis was right.
The Importance of Hands-On Education
The key to the success of Turtle Trading was hands-on education. It did not simply teach theory; it let the trainees practice in a real market environment.
Investing is like boxing. Just as you cannot learn boxing from a book, you cannot learn investing without real practice. There are opponents (other investors), split-second decisions are required, and you must withstand psychological pressure.
Why You Shouldn't Learn With Real Money
Many people start with real money, saying "let's learn by doing." But this has problems:
- Your goal changes: learning → making money
- Emotions get in the way: wrong decisions driven by fear of losses
- You give up on learning: trying to avoid mistakes, you miss important experiences
The Need for Simulated Investing
The Turtles were able to succeed because they practiced enough in a safe environment.
Advantages of simulated investing:
- You can focus purely on learning
- You practice in an environment identical to the real market
- You can try many things without the burden of losses
- You train in managing your emotions
Conclusion
As the Turtle Trading experiment showed, investing can be learned through education. What matters is hands-on education and a safe practice environment.
Before investing for real, practice thoroughly on a simulated investing platform like maruLab. Like the Turtles, you should prepare systematically before going into the real market.