"Risky Business"
A Profile of David Mack

From drag racing, to serving in Viet Nam, to trading – weekend tools salesman Dave Mack has lived with risk all his life. He tells Larry Levy about the thrills and spills. 

David Mack

Hearing about the life of David Mack is like entering an adventure novel. Mack grew up in the conservative US Midwest in the 1950s. Life was relatively strict however in the Mack household and the kids were brought up with a sense of honour, patriotism, service and discipline. From the time he fixed a broken Jacobsen gasoline lawnmower his Dad had bought so that they could ‘mow the lawn easier’ he was a real petrol-head. ‘I was highly competitive and I started drag racing in the 70s,’ he says. ‘My parents thought I was going to kill myself – it drove them mad. ‘Once I had a clutch explosion that blew the car clean in half. I came away with a bump on my ankle.’

‘The last time I raced in the 70s, I ran a quarter of a second under the national record in my class. That same competitive challenge has driven me throughout my life and has also extended across into my trading later on.’

In 1968, Mack was drafted into the US Army, which at that time meant you were probably headed for Vietnam. He considered himself lucky to be ‘selected’ for communications until a buddy informed him that Charlie (aka the Viet Cong) always concentrated their first fire on the field radio operator with a big comms backpack and huge antenna.

During his tour, Mack had several close calls with death including a narrow miss with an F4-Phantom fighter jet and being left to make his own way back to base through enemy territory. In July 1969, he was named Soldier of the Month.

After returning home to Iowa, Mack started his own Sunoco gas station, which he sold during the oil crisis in 1973. He went on to work for tractor giant International Harvester and started to dabble in real estate on the side, first by buying a ‘fixer-upper’ house in 1976. By the early 1980s, he owned a portfolio consisting of two hotels and a number of homes.

But then, he recalls, ‘property values took a huge bath.’ The local economy imploded, Mack lost his job and work was almost impossible to find. In 1991 he declared bankruptcy and, in desperation headed south on interstate 35 towards Dallas, Texas, in search of an opportunity.

Mack landed a job in a Dallas department store warehouse and lived out of his car for six weeks. He liked Dallas and prospered there. In 1992, he began selling Sears Craftsman tools all over the US at weekend motor events. During the week he had little to do so answered an advertisement and took a basic commodities trading course under Ken Roberts.

He placed his first trade in October 1993, when he bought two copper call options for $800. He sold the two call options for $4300 in January 1994, having made five times his money on his first trade. He then acquired a BMI realtime quote feed and for the next few years traded a variety of index and currency futures using basic indicators. For example, he liked to trade Japanese yen futures using a three-minute bar chart and a simple stochastic, often taking 20 to 25 ticks at a clip.

Mack has one piece of basic advice for all traders, one he has learned the hard way: never trade without a stop.

In 1998 a salesman called, trying to sell him Vantage Point software. Initially skeptical, after talking with several VantagePoint users Mack took the plunge and spent $3,000 to purchase two market modules. The daily software gives a number of simple predicted outputs for markets, such as next-day predicted highs and lows and predicted moving averages, using its neural net (or pattern-recognition) technology.

Mack claims he started making money in the first week simply using the Vantage Point predicted highs and lows. Over time, he acquired the remaining market modules.  He looks at a number of factors governing the relationship between Vantage Point’s predicted moving average and the real moving average to assess a turn in market direction, in order to prevent whipsaw trades. He has also developed a number of bespoke Fibonacci-based counting methods.

Mack has put a life of struggle behind him. Trading has come along as a competitive challenge and a source of sustained income. These days he still occasionally heads out across the USA selling his Sears Craftsman tools at weekends, but has gradually made the transformation so he makes his real money from trading out of his home.