This book is about a rogue day-trader who was making millions of dollars per year trading from his parents bedroom and ended up kickstarting a chain of events that saw a trillion dollars vacuumed out of the market in about five minutes.

It was a great read. Highly recommend it to anyone who follows the markets.

Flash Crash: Electronic trading gave birth to the “day-trader”. Popularized during the dot com bubble, these computer nerds were able to make (and lose) huge sums of money trading stocks from the comforts of their homes. 

People who came from “gaming” backgrounds tended to fare better than others given their ability to concentrate for long periods of time and because of their insanely quick reaction times.

Couple those skills with an understanding of the markets and you could make yourself a nice chunk of change without having to commute or get dressed every day.

However, over time the markets got more sophisticated. Banks and hedge funds invested in software that allowed them to scour the markets for the best opportunities. Then they took it a step further and invested in infrastructure that gave them faster internet connection which gave them an even bigger advantage over the mom and pop traders, as chronicled in the book Flash Boys by Michael Lewis.

Nav hated these guys and didn’t think it was fair that they used their money and influence to “rig” the system. He believed it should be meritocratic and the best man should always win.

So, he was able to ingeniously create his own software with the help of computer programmers that allowed him to compete with the top hedge funds and HFT’s. 

At his pinnacle, he was making millions of dollars per year. 

His tactics weren’t exactly legal though. He did what was known as “spoofing”. Creating fake and buy and sell orders that were never intended to be filled. Thus creating artificial supply and demand that fooled other algorithms into placing bets on the misleading information.

He wasn’t the only one doing this. He was just doing it better than everyone else. And one day he did so well that it tricked everyone into placing so many sell orders that it set off a cascade of selling a trillion dollars to vanish.. in five minutes.

The US government did not appreciate this. So they went for his head. 

Nav’s Elite Performance

A few weeks ago I wrote about Siddha Performance. There were some parts of this book that illustrated Nav’s thought process and showed the type of mindset it took for him to succeed. There were a lot of parallels between Nav and the type of mindset Kapil Gupta believes is needed to reach the pinnacle in a given field.

Here are a few quotes that stuck out:

“Nav tried his best to impart some wisdom, but much of what made him special couldn’t be taught.” -

As Kapil says, there are no “prescriptions” that will get you to the top. If you want to be the next Tiger Woods or Tom Brady, there are no how-to manuals that will get you there. The only way is to follow your instincts and do everything you can to get out of your own way so you can enter the proper flow states that bring out your best abilities.

“Both prided themselves on the conviction of their calls and hated discussing trading with anyone else lest their instincts be contaminated.” -

Kapil also preaches the importance of solitude. You should dream big and shoot for goals that scare the hell out of you. The second you open your mouth and tell your family and friends about these aspirations you’ll be met with negativity. You shouldn’t fall victim to delusions of grandeur but you also shouldn’t allow others to discourage you from achieving greatness if that’s what you truly believe you’re capable of.

“All I wanted is to be the best I could be,” he said, unlocking his Lambo from a lamppost. “As long as I reach my own potential, why does it matter what everyone else is doing?” -

I think my favorite thing about Dr. Gupta is that he thinks every human being should seek to unlock the part of him or her self that allows them to achieve everything they are capable of as a human being. That’s all Nav was trying to do. Yes, he broke some laws along the way but I give him a lot of credit for pushing the boundaries and proving to the world that he was just as smart and talented as the Ivy League suits who run Wall St.

I’m not advocating for breaking the law in order to maximize your potential. But I do think that there is a lot to learn from Nav on the type of mindset and behavior that is necessary in order to become a legend in one’s chosen vocation.

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