By James Murray, an American living permanently in Ajijic, Jalisco, Mexico. After having owned a business for 27 years, he now spends his free time musing on the world.
I Used To Be A Stock Trader. There. I’ve admitted it. I feel better.
I claimed it was a “profession” but it was really an obsession. I even moved from the Eastern Time Zone to the Mountain Time Zone so the hours suited me better.
For a long time, I denied what I did. Part of that was because a trader in Atlanta, where I lived, lost $300,000 of inheritance money in 6 months. He got up one morning, shot all his family, then went to the place where he had been trading and shot several more. Eventually, he shot himself.
If you met someone who didn’t know you and told them you were a trader, they would start backing away and start checking to see if you were packing heat.
I started telling people that I was the towel boy down at the local house of ill repute. Seemed more reputable than being a trader. This went on for almost a decade. Then, one day I looked at what I was doing, decided it was a crazy way to make a living, and stopped, cold turkey.
It wasn’t that I wasn’t successful, I was. I made more money in a decade that I’d made in the previous 50 years of life. Lots more.
I took what I was doing seriously and worked at it seriously. Up at 5 a.m., smoking cigarettes and drinking coffee, digging thru the stories on the web, looking for an edge. By the time the market opened, I was on the second pot of coffee and the second pack of cigarettes. Breakfast at my desk, lunch also. Afraid that if I took a few minutes off, I might miss something.
I had a friend that went to pee and lost $600 while she was away from her desk. She was thinking about catheters, and I didn’t find that to be a crazy idea.
I was totally out of reality….
I might still be trading, but one day in late 2007, reality hit and it struck me that I was trading things that had no value other than to sell to someone else, preferably at a higher price than you paid.
A lady friend of mine has 4 stock certificates nicely framed and attached to the ceiling of her bedroom, right over the bed. Each certificate is for 250,000 shares of a tech company. During the late 1990s, she worked for that tech company, getting a small salary and a big stock bonus every quarter. At one point, the company had an offer to be bought out at $1 a share. The employees voted it down and 6 months later, it was bankrupt. She framed the worthless certificates and put them on the ceiling so she saw them every morning as a reminder not to be greedy and to only take cash in payment.
If stock actually had any value, there would be no market. You could look at the quarterly financials, find the net worth, divide by the number of shares out, and have the value of a share. Obviously, it doesn’t work that way. Look at Twitter, a company that lost $60 million last quarter and may never make any money!
In 2007, reality struck and I quit trading. I put my money in interest bearing investments and retired. Now, I sleep late and eat leisurely breakfasts with friends. Occasionally, I look at the market and want to trade a little. I go drink a beer with friends until the feeling goes away.
If anyone asks me what I do, I tell them that I’m retired. If they want to know what I did before I retired, I tell them that I was the towel boy down at the local house of ill repute. I have to protect my reputation.By James Murray.
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.