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Magician-turned Trader: “Reality Doesn’t Matter” | Scott Foster, Dominion Capital Management | #27

“You can even argue that in the markets – reality doesn’t matter. Because when reality catches up, it will change perception.” – Scott Foster (Tweet)

Our next guest was a philosophy major and a magician before he ever considered trading in the stock market. In Part 1 of our talk, he describes how philosophy and psychology determine his firm’s decisions and the story of how he started trading in a small town in Pennsylvania.

Thank you for listening and please welcome our guest, Scott Foster.

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In This Episode, You’ll Learn:

  • On the 20th Anniversary of Scott’s firm, he looks back on how it all started.
  • Scott’s life as a magician and how the principals of magic influences his perspective on trading and the market.
  • How he became a philosophy major and how he applies philosophy to trading and everything his firm does.
  • How he started trading in the market, getting a group of his college friends to take out cash advances on their credit cards and investing it.

    “I tripled the account size and from that point on I knew I was never going to make it to graduate school. I was hooked. It was the best thing since sliced bread. But I didn’t know anything about money management.” – Scott Foster (Tweet)

  • The Austrian perspective on economics that his college was well known for.
  • How he educated himself in futures trading and invested long before he ever met another trader.
  • Scott’s initial lessons learned from trading in the stock market; how he lost almost all of his capital in one day and had the first sleepless night of his life.

    “I went from high in the sky to very very low in a matter of hours.” – Scott Foster (Tweet)

  • How he made the mistake of investing in coffee and cocoa in the late 1980s and what he learned from that experience.

    “There’s a great trading maxim that says ‘ you should never trade anything that you can eat for breakfast’” – Scott Foster (Tweet)

  • How he started his first firm in 1989.
  • How Scott traded while living in rural Western Pennsylvania.

    “You don’t realize the pain side of it, and how much more you’re going to feel that pain then the euphoria.” – Scott Foster (Tweet)

  • How a philosophy major with no connections to the financial world used his network to find a mentor.
  • The story of Scott becoming a principal at one of the biggest short-term CTAs in the world.
  • The story of Dominion Capital Management, which he started in 1994 by moving to Chicago.
  • Why he is based in Traverse City, Michigan.
  • How his firm is a bit different and why they don’t have any mathematicians or scientists on their team.

Resources & Links Mentioned in this Episode:

  • Learn about the Square of Opposition that Scott explains in the episode.
  • In Scott’s first job at a firm, the company hired people belonging to Mensa.
  • Learn about how trading was conducted and firms operated before the use of personal computers and the Internet. Scott’s firm had a VAX computer.

This episode was sponsored by Saxo Bank:

Connect with Dominion Capital Management:

Visit the Website: www.DomCap.com

Call Dominion Capital Management: +1 (231) 995-4400 

E-Mail Dominion Capital Management: dominion@domcap.com

Follow Scott Foster on Linkedin

 “The psychology of the markets is my universal affirmative: in other words how people make decisions is not going to change the next day or the next day.” – Scott Foster (Tweet)

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