Richard Dennis: The Prince of the Pit, the Turtles and the 1988 Losses

Richard Dennis is the Chicago commodity trader known as the "Prince of the Pit", who made his fortune as a trend follower and, in the early 1980s, trained the Turtles to prove that trading can be taught. In October 1988 Time estimated his fortune at $200 million, after his two public funds had lost about $50 million in a year, and reported that he was leaving trading for politics. His current status and net worth are not published by any source we could verify.

This page sticks to what is dated and sourced: his rise, the Turtle experiment, the losses of 1987 and 1988, and what traders can still use from his approach. The Turtle rules themselves are on our Turtle Traders page.

From runner to Prince of the Pit

MarketsWiki gives his birth as January 1949 in Chicago (Time called him 39 in October 1988) and says he earned a bachelor’s degree in philosophy from DePaul University, briefly accepted a scholarship for graduate study in philosophy at Tulane University, then returned to Chicago to trade full time. Dennis began his career as a runner at the Chicago Mercantile Exchange at 17 and, a few years later, traded for his own account from the floor of the Chicago Board of Trade building. Much of his early success came from following "the Great Russian Grain Robbery", when the U.S. government secretly agreed to sell grain to the Soviet Union and prices rose over an extended period. He reportedly made his first million by the age of 25. His approach was trend following: buy rising markets, sell falling ones short, and stay with the trend.

The Turtle experiment

Dennis believed that trading could be broken down into rules and learned, not inborn. To test it, he and his partner William Eckhardt placed a newspaper ad in the early 1980s, recruited about 20 people, about half with no business background, and trained them in two groups for two weeks. The recruits traded his money for a share of the profits; one of them, Jim DiMaria, told WBEZ he got an $18,000 draw, a payment advanced against future earnings. The name came from a turtle farm Dennis had visited in Singapore: he said he could grow traders as fast as turtles were raised there. Several recruits were dropped early; the FIA notes that many of the traders went on to successful careers in the industry.

1987 and 1988: the losses

According to Time, Dennis took a bath in financial futures after the October 1987 crash and in grain during the 1988 summer drought, and his two public commodity funds lost an estimated $50 million in a year, nearly 50% of their value. In September 1988 he decided to stop and turn to politics, to support causes reflecting what he called "an idiosyncratic mix of economic free markets and liberal social policies". The 1989 book Market Wizards titled its chapter on him "Richard Dennis: A Legend Retires".

A loss of nearly half is harder to repair than it sounds, because the gain needed to recover is measured from the smaller balance.

After 1988: the return to fund management

The retirement did not last. MarketsWiki reports that Dennis returned to fund management in the mid-1990s and closed those operations after losses in the summer of 2000. We did not find the original press reports of that period, so we give no figures for it.

Net worth: what is documented

Precise starting sums and later fortunes that circulate online had no source we could find, so they are not repeated here. The FIA lists him as president of the Dennis Trading Group and vice-president of C&D Commodities, and he was inducted into the FIA Futures Hall of Fame in 2009.

How Dennis traded, and what to keep

Dennis built on the trend following ideas that Richard Donchian pioneered, but he did not use moving averages for entries and exits and relied much more on money management than Donchian. For a trader today, three points survive: follow the trend rather than predict it, define the rules before the trade, and size positions so that a bad year, like his 1988, is survivable. A written trading plan is where those rules go. Other careers are compared on our list of the most successful stock traders and in the famous traders section.