Jerry Parker, CEO of Chesapeake Capital, talks about a day in which decisions he made led his fund’s equity value to decrease by over 60%. Coming up as one of Richard Dennis’ “Turtles,” Parker’s story includes a lot of success as well, and he discusses several instances in which his successful timing led to profits. This video is excerpted from a piece published on Real Vision on May 6, 2019 entitled “Top Turtle’s Trading Tips.”

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Winning and Losing Like a “Turtle” (w/ Jerry Parker)
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Transcript:
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JOE PERRY: Right. What would you say is the largest drawdown that you've ever had?
JERRY PARKER: Well, definitely Richard Dennis. I lost 60% in one day. 1986, we were just
making so much money, and I know we were up to 200%. And I went home on Friday at peak
equity, and my bonus was a million dollars and I was just on top of the world. And Monday was
just this day of all the markets going against us. We had made so much money so quickly. And
just like, oh well, such is life. Rich approves of it, you know, he's telling us to do, we think we're
doing the right thing, that it must be right.
But I quickly figured out 1988 when I started Chesapeake, that maybe 200% was not what I
should go for in order to have a stable business. But I do remember being jealous and hearing my
other Turtle friends who had not made that transition quite yet are doing really well in that green,
the drought in 1988. But yeah, it's an evolution over time. A lot of positive from the Turtle
program and a lot of things that you have to get out of your head when you trade sort of client
money.
JOE PERRY: Is it a lot easier now with computers as compared to like 1980s, where you had to
execute everything by hand and pick the phone up and make a phone call down to the pits? Now
you have these algorithms and you don't necessarily have to make the decisions right there,
because they will do it for you in a sense. You program them, but in a sense, you don't have to
actually go and physically do it. Does that take a little bit of pressure off of you?
JERRY PARKER: I think it makes us more disciplined. And probably the traditional CTA firm would
have a research department that creates the models, a committee that approves the models, and
then you run those models each day on the new data. And then you have a separate department
that executes the trades. So these guys who are executing, their only job is to get a good fill.
JOE PERRY: Right.
JERRY PARKER: And everyone else's hands are tied. They can't walk in there and say, hey, do a
Jerry trade or do a Joe trade. I'm getting freaked out. So I think this division of duties gives
people more consistency and discipline. There are still ways to what I call, systematize discretion.
It's really easy sitting in front of the computer and say, I'm really nervous about this coffee trade.
The coffee skyrocketed in 1988 as well or maybe '89, and I remember sitting there going, I really
want to get out of this coffee, it's just going up too much.
So now I think more than, a lot of people just program that in.