Trading Recipes

Written by Michael Bigger. Follow me on Twitter.

 

 

My wife and I were recently invited to a dinner at a friend’s house. This friend has a beautiful home with a nice pool, which is to be expected in our neighborhood. However, when he showed me around the house, I was quite surprised to find a beautiful Ferrari in his garage and a wine cellar stocked with stellar wine. Bottom line: this gentleman has created super wealth.

 

What did he do to achieve this? He built a vitamin manufacturing business.

That got me thinking about why his vitamin business rocks and how it is creating value. 

 

I concluded that vitamin manufacturing is a recipe business: the proprietary potion drives the creation of wealth.

 

This is no different from Innovative Fibers, the fiber-optic business my partners and I sold to Alcatel in 2000 (Link to the story). Innovative Fibers owned some potent recipes (technological processes) to make dense wavelength-division multiplexing, the backbone of high bandwidth. Alcatel needed these technologies and gladly paid $175 million in cash for them.

 

Some other recipe businesses you know:

 

● Coca-Cola

● Crocs

● McDonald’s

● Tempur-Pedic

 

So, the bottom line to this story is this: one way to become stinking rich is to own a recipe people need.

 

For traders, that means owning proprietary trading methods and algorithms. Do you own trading recipes?

 

If you don’t, you can start by overlaying pre-built algorithms over your strategy (I show you how here). Start working on your concoction now. Why not? 

 

 

 

Recommended reading: Nerds on Wall Street: Math, Machines and Wired Markets (Amazon Affiliate Link).

Comments

[How To Cook Fish]

what about people who alreade expert ?