As stated earlier in my blog, I once held a series 7. Not that that means anything. To be honest, I had series 7, and I didn't know my ass from a hole in the ground.
The stock market is extremely complicated. Not only is it extremely complicated, it has the tendency to illicit extreme punishment on stupid and smart people alike.
That said, I watched Wall Street Warriors Season 1 and thought it was interesting but not very remarkable. I couldn't really relate to any of the "characters" in the stories.
However, I just watched Season 2 and the dudes, who were selling Sandisk inspired me to write this.
They spent the entire Season pumping Sandisk, patting themselves on the back before watching that stock tank and seeing all their profits fly out the window.
I can only relate because I can definitely tell you I'm guilty of being that overconfident and stubborn, which is what I saw in these 2 dudes, who totally got fucked up. They broke one of the cardinal rules of being a stock operator. They married SNDK, and said "till death do us part." They actually took SNDK on a gay cruise. They were counting their money all the way to $54 a share and wept as they watched profits disappear into thin air. As it tanked, their clients lost a lot of money, they had to make the dreaded "I'm sorry I lost all your money" phone call.
As a broker, I pumped an IPO for about 4 months that was never even released. While there, I participated in a very similar activity to what these guys, who were selling Sandisk, were doing. This was back in 2000 when the bubble was in full bursting mode. I would call guys trying to sell Fudgepacker.com [not the actual name] and traders would laugh in my face. They would say shit like, "Are you fucking kidding me? Give me the ticker symbol so I can put my short in now."
But, some people, who I had never met before, would actually send me money.
Good times.
I worked for a small boutique firm that went bankrupt. I was one of the last one's to jump ship. In fact, I was the only smart ones to leave with office furniture, which was nice.
So, I'm not going to say those guys pumping SNDK were total idiots because I've been there-done that, and it would be like calling myself a douche. (I am a douche though for several reasons of which my ex-girlfriends can attest to.)
Clearly, the guys selling Sandisk just ran out of ideas. They didn't sell because they hadn't found their next Sandisk. They became their own self-imposed one-trick-ponies. Bush league. Mistakes like that kill most stock brokers.
Bulls and Bears make money. Sheep, pigs, and idiots get slaughtered. The allure is there because everyone thinks they have a big swinging dick only to find out their dick is just long enough to fuck themselves in their own ass. [sorry to be so crude]
But, here's a tip: Tiger Woods can shoot 65 in major and walk away pointing to some facet of his game that he feels he's struggling with. In other words, we are all striving for perfection, and that's only reflected by the rules and standards we set for ourselves. (Yes, that's a golf metaphor, and it relates to trading because trading takes practice.)
These guys on Wall Street Warriors made their big mistake back in Nov 2007. SNDK closed Friday at $15.69 a share. I enjoyed watching these guys because even though the market's atmosphere is completely different, it's nice to see the people playing the game haven't changed.
It would be interesting to know if these guys were able to shift gears enough to get out of their predicament. They were fucked then, but it would be interesting to see how they unfucked themselves. Did they sell? Were they able to rebound? My guess, they're selling used cars.
Successful traders find their next SNDK while closing out their current SNDK and banking profits. The cycle begins all over again. Their are more than a few guys driving Ferraris who trade this way. You build up a position and you sell without being too greedy. That's definitely a trading model that's workable. When the market's moving good, even retarded monkeys can make money.
Again, build a huge position, watch it go up, sell it off, move on to the next SNDK. It's funny how many people can screw up this up.
As seen in WSW 2, it doesn't always work out ideally because it's tough to time. When it doesn't work out, the stress and pain can cause a sprained vagina. Usually, people try to move on to some other job related to the market, "that's less stressful," which is a fucking joke because all work is stressful and risky. ...even jobs where you sit on your ass doing data entry are like this.
At the end of the show, these dudes tried to analyze, "what went wrong." They came up with a too simple answer, "We need to diversify," which is true.
They were victims of overconfidence. The moment they were absolutely positive SNDK could not be stopped, they should have realized that was the time to sell. There's group psychology at work in this scenario, and people were viewing Sandisk in a completely different light despite Sandisk's bright prospects. Fear set in. Investors sold. The stock fell. These guys, without stops, watched all their hard work fade away.
So, there's a lot of the same old classic lessons to be learned from their mistake:
•Exit stocks gracefully. Don't wait until the jugular is severed. "Averaging down" is good if your in a bull market, but in case you hadn't noticed, ever since George Bush has been in office, the market has moved sideways. Realize, no one's going to turn on a flashing neon sign that says, "It's time to sell."
•The market is always right. Don't waste time on stocks that aren't changing the way you want them to.
•Instead of counting profits, start taking profits off the table because that's what your competition is doing.
•If you don't have a profitable idea, don't do anything. Sit in cash. Learn how to short sell.
•A little bit of fear each day is a good thing. Don't get too confident, but don't be a fucking pussy either.
•Always, always use stops.
•Keep your head on a swivel so you can spot your next good idea." Personally, I won't have a good idea for an entire year. I've had some lengthy droughts before finding that golden opportunity. I'm currently experiencing one. In fact, the only good ideas I've had lately have been shorts.
Last, but not least, "Have fun!!!!"
This is information is just what I'm learning to believe: Learn how to make every single type of trade there is. Know short, medium, and long term trading strategies. Learn bull, bear, and stagnant market strategies. Don't be afraid to use them, and don't become obsessed with one particular idea because the market constantly changes.
The stock market is extremely complicated. Not only is it extremely complicated, it has the tendency to illicit extreme punishment on stupid and smart people alike.
That said, I watched Wall Street Warriors Season 1 and thought it was interesting but not very remarkable. I couldn't really relate to any of the "characters" in the stories.
However, I just watched Season 2 and the dudes, who were selling Sandisk inspired me to write this.
They spent the entire Season pumping Sandisk, patting themselves on the back before watching that stock tank and seeing all their profits fly out the window.
I can only relate because I can definitely tell you I'm guilty of being that overconfident and stubborn, which is what I saw in these 2 dudes, who totally got fucked up. They broke one of the cardinal rules of being a stock operator. They married SNDK, and said "till death do us part." They actually took SNDK on a gay cruise. They were counting their money all the way to $54 a share and wept as they watched profits disappear into thin air. As it tanked, their clients lost a lot of money, they had to make the dreaded "I'm sorry I lost all your money" phone call.
As a broker, I pumped an IPO for about 4 months that was never even released. While there, I participated in a very similar activity to what these guys, who were selling Sandisk, were doing. This was back in 2000 when the bubble was in full bursting mode. I would call guys trying to sell Fudgepacker.com [not the actual name] and traders would laugh in my face. They would say shit like, "Are you fucking kidding me? Give me the ticker symbol so I can put my short in now."
But, some people, who I had never met before, would actually send me money.
Good times.
I worked for a small boutique firm that went bankrupt. I was one of the last one's to jump ship. In fact, I was the only smart ones to leave with office furniture, which was nice.
So, I'm not going to say those guys pumping SNDK were total idiots because I've been there-done that, and it would be like calling myself a douche. (I am a douche though for several reasons of which my ex-girlfriends can attest to.)
Clearly, the guys selling Sandisk just ran out of ideas. They didn't sell because they hadn't found their next Sandisk. They became their own self-imposed one-trick-ponies. Bush league. Mistakes like that kill most stock brokers.
Bulls and Bears make money. Sheep, pigs, and idiots get slaughtered. The allure is there because everyone thinks they have a big swinging dick only to find out their dick is just long enough to fuck themselves in their own ass. [sorry to be so crude]
But, here's a tip: Tiger Woods can shoot 65 in major and walk away pointing to some facet of his game that he feels he's struggling with. In other words, we are all striving for perfection, and that's only reflected by the rules and standards we set for ourselves. (Yes, that's a golf metaphor, and it relates to trading because trading takes practice.)
These guys on Wall Street Warriors made their big mistake back in Nov 2007. SNDK closed Friday at $15.69 a share. I enjoyed watching these guys because even though the market's atmosphere is completely different, it's nice to see the people playing the game haven't changed.
It would be interesting to know if these guys were able to shift gears enough to get out of their predicament. They were fucked then, but it would be interesting to see how they unfucked themselves. Did they sell? Were they able to rebound? My guess, they're selling used cars.
Successful traders find their next SNDK while closing out their current SNDK and banking profits. The cycle begins all over again. Their are more than a few guys driving Ferraris who trade this way. You build up a position and you sell without being too greedy. That's definitely a trading model that's workable. When the market's moving good, even retarded monkeys can make money.
Again, build a huge position, watch it go up, sell it off, move on to the next SNDK. It's funny how many people can screw up this up.
As seen in WSW 2, it doesn't always work out ideally because it's tough to time. When it doesn't work out, the stress and pain can cause a sprained vagina. Usually, people try to move on to some other job related to the market, "that's less stressful," which is a fucking joke because all work is stressful and risky. ...even jobs where you sit on your ass doing data entry are like this.
At the end of the show, these dudes tried to analyze, "what went wrong." They came up with a too simple answer, "We need to diversify," which is true.
They were victims of overconfidence. The moment they were absolutely positive SNDK could not be stopped, they should have realized that was the time to sell. There's group psychology at work in this scenario, and people were viewing Sandisk in a completely different light despite Sandisk's bright prospects. Fear set in. Investors sold. The stock fell. These guys, without stops, watched all their hard work fade away.
So, there's a lot of the same old classic lessons to be learned from their mistake:
•Exit stocks gracefully. Don't wait until the jugular is severed. "Averaging down" is good if your in a bull market, but in case you hadn't noticed, ever since George Bush has been in office, the market has moved sideways. Realize, no one's going to turn on a flashing neon sign that says, "It's time to sell."
•The market is always right. Don't waste time on stocks that aren't changing the way you want them to.
•Instead of counting profits, start taking profits off the table because that's what your competition is doing.
•If you don't have a profitable idea, don't do anything. Sit in cash. Learn how to short sell.
•A little bit of fear each day is a good thing. Don't get too confident, but don't be a fucking pussy either.
•Always, always use stops.
•Keep your head on a swivel so you can spot your next good idea." Personally, I won't have a good idea for an entire year. I've had some lengthy droughts before finding that golden opportunity. I'm currently experiencing one. In fact, the only good ideas I've had lately have been shorts.
Last, but not least, "Have fun!!!!"
This is information is just what I'm learning to believe: Learn how to make every single type of trade there is. Know short, medium, and long term trading strategies. Learn bull, bear, and stagnant market strategies. Don't be afraid to use them, and don't become obsessed with one particular idea because the market constantly changes.
1 comment:
Awesome read Jeff, couldn't have said it better myself.
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