#024 - The Wealthy Commodity Trader
Learnings from a world-class investor, father, husband, & follower of Jesus.
Don’t want to read? No problem! You can listen to me reading to you by clicking the play button above.
Welcome to the 24th edition of The Wealth Letters, a crowdsourced Anthology on how to find enough in a noisy world.
Please read or listen to the manifesto before reading the collection of letters to better understand this project’s purpose.
This edition is a little different in that it is a letter written to you (the readers of The Wealth Letters) on my takeaways & findings from a 2-hour lunch with Peter Brandt. This was also posted to Twitter.
If you read my letter to my daughters, you will know that Peter Brandt was referenced for his wisdom on using strict risk management when it comes to investing your money, and so it was an absolute pleasure and blessing to be able to sit down with a true mentor!
Source: The Factor Report
What I Learned from The Wealthy Commodity Trader
By: Jordan Olmscheid
Most of what I've learned & come to be in my faith, as a husband & father, in business, and as an investor is due to mentorship. I was blessed recently with the opportunity to meet one of my mentors, Peter Brandt, over a 2-hour lunch.
Peter is a world class investor (top 0.5% in the world) who is featured in Jack Schwager's Market Wizards series of books, has made his living solely from investing for decades, and has a following of 1M+ people who have read his books and learn alongside him at The Factor Report.
But, his passion for his faith, family, and focus on excellence in everything he does is what impressed me more than his investing success. Peter is a world-class investor, but I think more importantly a world-class follower of Jesus, husband, father, and human being.
Like me, Peter was born and raised in the north tundra of MN where he received a scholarship to play hockey at St. Cloud State University (for anyone who doesn't know hockey, SCSU is a national powerhouse). Peter married and had children at a young age which pushed him to grow as a father and husband early on.
He transferred to the University of MN for journalism. (Useless side-note: I found it amusing that Peter started at St. Cloud State and transferred to the U of M, because I did the exact opposite - I started at the U of M and transferred to St. Cloud State).
I couldn't connect how Peter crossed the bridge from journalism to legendary investor...by happenstance, he was shown the trading floor (or "the pit") at the Chicago Board of Trade and said it was nuts, and was hooked. I now understand what all the yelling and screaming and waving of papers is all about that we see in the movies! Peter said that is exactly what the pit was like because everything hangs on order flow, and the traders in the pit are trying to get their orders filled.
Peter managed funds for some very large corporations before trading his own funds to earn his living. Some say the best investors are born...Maybe. But in Peter's case, he learned and willed his way to being one of the best to ever do it. It takes YEARS of trial and error and studying the markets to be able to do this successfully. It took Peter a few years to be profitable and a few more years to do it for a living.
Over the long-term, he said that 10% of traders maybe make a little money, but less than 1% make enough to make a living. Who could muddle through 5+ years of trading and learning before truly breaking through to the point where he could do it for a living? Peter was able to because he engineered his situation from a place of strength.
Before going off on his own, he made an agreement to be able to come back to his current position after a year with a pay raise. They accepted because he was one of their best. This allowed Peter the flexibility and mindset to approach trading the right way without the stress of "needing to make it" cloud his judgement & decision-making.
Peter attributes his investing success to his own mentors, as well as putting himself in a position of strength and security to actually give it enough time to see it through.
Faith. Peter doesn't work closely with anyone who is not a man/woman of faith...it's what he has done from the start and has treated him well over his 50+ years in business, investing, and life. I love how Peter said that he is unapologetically open about his faith, and that while some people may shy away from that, it has done so much more for good in his life.
He plays pickleball 6 days/week and has ridden over 1,000 miles on his bike this year. What is interesting is that pickleball has grown in sport and popularity, and Peter notices how the younger generation has really taken hold of the game!
When asked about his wisdom on building wealth for most of us, he said that almost everyone should dollar cost average into the S&P 500, get the big expenses under control (he drives a car that is 15+ years old), and do this from the get-go; and you will be wealthy at 50+. Peter said it's not mandatory for building wealth, but he owns a % in Bitcoin as a hedge with the understanding that it is equally likely to go up in price as it is to go to zero. For the majority of us, 2% of your investable assets may be a good starting point (again, understanding that this investment may go to zero).
Looking back, he didn't optimize for building wealth. He was focused on the cash flow from his trading business to live his life. Peter said that if he optimized for building wealth (using cash flow from his trading business to invest in the S&P 500, rental real estate, etc) he would be worth much more than he is today.
I asked about investing in the stock market and its volatility, and how to manage our emotions when we are seeing our investments fluctuate. He said to just continue to buy for years and hope for a downturn because then you are buying at lower prices. Peter referenced Warren Buffet (perhaps the most well-known investor of our time) and how Mr. Buffet says that most people should buy the S&P 500 over time and that's it...nothing more anyone should need to do. Buffet and Brandt, two world-class investors saying that 99% of us should just buy the S&P 500...I think it would behoove us to listen.
Peter has written two books and says that he has a couple more in him before he goes. My goal is to have The Wealth Letters published into a book down the line, along with live readings of the letters in a community / theatre format. Peter gave advice to me on the publishing process, as well as who he works with on his own publishing at Harriman House.
I was able to confirm the idea that collecting insights from the highly successful to the ordinary folks on the keys to living a wealthy life is a mission that can truly help others.
To summarize, Peter said to tune out the noise of this world and everything/one screaming for your attention, and focus on faith, family, and excellence in what you do.
If these are your true north, then true wealth, excellence, & legacy will be a byproduct of those things.
Thank you for reading, and thank you Peter for being willing to be vulnerable and share your story!
- Jordan Olmscheid
More from Peter
The Diary of a Professional Commodity Trader
SHOUT-OUT
A special shout-out goes out to Chenell Basilio, who has referred 17+ people to The Wealth Letters!
Chenell writes a newsletter called Growth in Reverse, where she reverse engineers how top creators grow from 0 to 50,000+ readers. Even if you are not a creator, I think you will appreciate how much time & effort she puts into her deep dives.
Chenell took some time to look at my project and gave some outstanding insight as to how to go about reaching more people, time management strategies, etc. I did a write-up of everything I learned from her that you can read here.
Chenell gets a shout-out in this edition, is now listed on the Leaderboard (currently holds the #1 spot), received book summaries of my top 3 books for living a wealthy life, and will be listed as a supporter in the future published book of The Wealth Letters.
These perks were given to Chenell as she took advantage of referring friends to this project, which you can do as well! If you go to the Leaderboard, you can share the custom link with your friends and get some sweet rewards!
Would you be awesome like Chenell and share with a few friends?
Thank You for Your Support
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Please reach out via email: support@thewealthletters.com or by commenting on this post.
I look forward to hearing from you!
Jordan
Nice work man.