The Incredible True Story of the Real Life 'Trading Places'

Tracy Alloway (0:09)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:14)

And I'm Joe Weisenthal.

Tracy Alloway (0:16)

Joe, what is the best financial movie of all time?

Joe Weisenthal (0:20)

Well, the best financial movie also happens to be the best movie period, which is Trading Places, of course. There's no question.

Tracy Alloway (0:29)

I am so glad you said that. I was worried you were going to go with something else.

Joe Weisenthal (0:33)

The best movie, the best financial movie, and the best Christmas movie are all the same thing. It's all Trading Places.

And anyone who hasn't seen it needs to press pause right now and watch it, and then come back to this.

Tracy Alloway (0:48)

All right. So Joe, you're clearly a fan of this movie. You remember the basic premise of it, right? There's two really wealthy commodities traders, and they make a bet about whether or not trading is something that you're born with, or something that your upbringing kind of gives you, or whether anyone, any man on the street, can be taught how to trade.

SPEAKER_3 (1:12)

We're lucky to have him managing our firm for us. Oh, hogwash.

Exeter, Harvard, he's the product of good environment. It's got nothing to do with environment. With his genes, you could put Winthrop anywhere, and he's going to come out on top. Breeding Randolph, same as in racehorses. It's in the blood.

Joe Weisenthal (1:30)

Right. It's sort of a classic story. There's two very patrician heads of this commodity brokerage in Philadelphia, the Duke brothers, and they have this star trader who's played by... What's his name? Dead actor?

Tracy Alloway (1:46)

Dan Aykroyd.

Joe Weisenthal (1:47)

Anyway, Dan Aykroyd. And then one of them says it's a result of his genetics, that he's really just sort of naturally gifted. And the other one says nonsense. It's pure upbringing, and anyone could be trained to do what he does. And so they, of course, find Eddie Murphy, who they find on the street, basically.

And they train him to be a great trader.

SPEAKER_3 (2:10)

Given the right surroundings and encouragement, I'll bet that that man could run our company as well as your young Wintoff. Are we talking about a wager, Randolph?

Tracy Alloway (2:23)

Okay, so that movie came out in 1983 What if I told you that around that same time, there was a real life trading places experiment going on?

Joe Weisenthal (2:35)

I would be completely fascinated, and I would love to know what the results of that experiment was.

Tracy Alloway (2:41)

Well, there was. And I'm so excited because we've been trying to do this podcast for about a year now, and I'm really, really happy that it's finally happening. Now, when I say there was a real life trading places, I am not kidding. There were two commodities traders that essentially made the same bet as in trading places.

One of them was Richard Dennis. He thought that trading skills could be taught. Another one was Bill Eckhart. He thought that people were just bored with these sort of innate intrinsic skills. And they ended up finding a group of wannabe investors, wannabe traders, and seeing whether or not they could successfully trade. And we are going to today not just talk to one of those former traders, we're also going to talk to the author of a book, a very good book on this complete saga. He is Michael Kovill. He is the author of The Complete Turtle Trader, How 23 Novice Investors Became Overnight Millionaires.

Joe, you can sense my excitement, right?

Joe Weisenthal (3:47)

I am just as excited as you are.

Tracy Alloway (4:00)

Michael, thanks so much for joining us.

Michael Covel (4:02)

Hey, thank you for having me.

Tracy Alloway (4:04)

So, Michael, shall we start with that intro? Did we get the gist of that bet right? And is the Trading Places analogy the right way to think of it?

Michael Covel (4:14)

There is conflicting stories, but the best of my research over the last 20 years is that Rich Dennis and Bill Eckhart went to that movie.

And essentially, Rich said to Bill, I can do that, I can take them off the street, I can train them.

And you know, Bill Eckhart said, no, impossible. And I don't think there was a monetary bet like in the movie, but they placed ads in the Barron's Wall Street Journal. Thousands of people responded. I mean, at this time, the biggest trading names on Wall Street were George Soros and Rich Dennis. So even though Rich Dennis has not been in the public eye for a long time, he was huge at this point in time, having made several hundred million dollars by the age of 37 in 1982, 1983 So essentially, you know, really, really successful. They took thousands of resumes. They hired about 20 people, gave them a couple of weeks training, spread out over two years, and really pretty much out of the gate, using what they would call a trend following system, these students, ranging from like 19 to late 30s, all started to make money, huge money, a lot of money. In fact, millions of dollars.