For those of you who haven’t heard of James Altucher, you are missing out on having access to insights and ideas from one of the brilliant thinkers and writers of our time. The link below will take you to his “About Me” page to learn more about him.
As you can see, James is “unique.” I’ve followed him for years and have always been a fan of his blog and the way he writes. James has a way of making himself seem “simple” although his genius is undeniable. I feel like he is the type of guy I’d want to hit a dark lounge with, and tell the waitress to keep them coming until James wanted to leave. He’s done so many things, reinvented himself countless times, and has a wealth of life experience I’d love to absorb. Anyway, I bring James up because I am going to try and use his special style of prose to talk about myself. I’m a conceited bastard like that as you will come to find out. 🙂 In all seriousness, I received an email recently from a subscriber to my blog who wanted to “know more about me because my About Me Page is weak.” I don’t have that many blog subscribers so I am happy to appease those who do read it. I’ve always found that talking about myself is difficult, but using James’s unique style I think I can manage to do better than my weak About Me Page.
Here Goes…
The guy on the left in the blog picture above is me. I was with my friends in Las Vegas.
I love the markets and everything about them. A close friend and mentor, Matt Bradford is to thank for that.
In college I had a hard time deciding what I wanted to be when I grew up. I had a near 4.0 GPA so people said I was smart and should go to medical school. I took a number of pre med classes. Not a great fit. I don’t like blood and hospitals make me sick to my stomach. I am in awe of nurses, they do God’s work and are underpaid for it.
My Mom is a nurse. She is a really special lady with a huge heart. You’d love my Mom.
Back to me, since this post is about me. In college I also took the LSAT to study with a girl I was interested in. I had no idea what the LSAT even was when I signed up for it. Law school is not anything I ever had any interest in and still don’t, but I married the girl I studied with so I guess it worked out.
I got sidetracked again. I do that a lot. Back to Matt. The summer before I graduated college, we met for lunch and talked about possibilities post graduation. I have a brother 12 years older than me, and him and Matt are best friends of about 30 years. My brother wanted Matt to talk to me since I was ” a smart kid who was all over the place.” Matt ran the trading division of a company where I live and mentioned I could work for him for a year while I figured out what I really wanted to do. At the time it seemed better than going to get an MBA or working at the mall.
Two days after I graduated I started working for Matt. I knew nothing about investing, trading, stocks, futures, etc. Not unlike the majority of freshly minted B.S. degrees unfortunately.
I had no clue what was going on at first. I remember asking guys around me what “Globex” was, and why a stock went up or down. My accounting, calculus, and economics classes failed to teach me these things.
But Matt gave me a job I was in no way qualified for, and I wasn’t about to let him down. Letting people down isn’t something I make a habit of.
Here is Matt and myself, he’s the guy in the middle. He has a calculator super chip type brain. I got rid of the earrings a long time ago. 🙂 The guy on his left is his younger brother Aaron. Aaron was kind enough to let me in his MMA class while I was in college. Training with guys that went on to the UFC and VFC was an experience. I guarantee I have lost more fights than most of you have ever been in. 🙂
I wasn’t very good at fighting. I hit this new kid and apologized mid match to which he replied “That’s what you are supposed to do fu*kstick.” Then he hit me back. I still felt bad for days after punching him.
I took a liking to the markets right away and began learning as much as I could. I thought I’d use my accounting background and analyze some financial statements, making my trading decisions based on the balance sheets and income statements of companies. That didn’t work well. Especially since I started in 2007…
I started watching CNBC during the Financial Crisis of 2007 and 2008. I never missed Fast Money or Mad Money for probably a year or more. I remember seeing Cramer’s market meltdown live on air:
I had no idea yet the gravity of the financial situation, but had it not been for that disaster I don’t know if I would have developed an interest like I did. So many smart people were talking about it and I didn’t understand what they were saying. I had to get up to speed.
I began devouring investing and trading books, starting with Cramer. Then I bought Series 7, 65 etc study programs, and read those. For fun. CFA Level I body of knowledge, read for fun. I was on a mission to teach myself what was toppling the global markets. It was hard at first, a new language. I’m a really fast reader though, and was ripping through these books. I couldn’t get enough.
Our clients taught me a lot. I talk everyday to sophisticated traders, and in those early days they talked circles around me. I listened intently, took notes and had Investopedia on my screen all day so I could look up words I wasn’t familiar with. I didn’t want my own customers to think I was a rookie. Which I was.
Once the dust started to settle, I took 5k of money I had in a money market and put it into a brokerage account. I remember buying Ford stock in the $1.75 area, Las Vegas Sands under $10, and Intel around $12. I watched them start to go up day after day.
Sometime in 2008 after my account had grown, I was working in Chicago and remember someone talking about options. Back to Investopedia.
Essentially what I gathered was I could buy contracts on stocks giving me leverage. Since my account was still fairly small, this sounded great. I wanted to grow my account faster afterall. I remember asking someone for a good book on Options and they told me the one below.
This one took me some time. Options are again, a different language. A powerful one once you understand it.
I powerfully did really well with them, extremely well. I was sure I had the market figured out. While some were bragging about their stock positions up 20% for a year, I saw my option positions up more than that, often in a week’s time.
I also came across a guy on YouTube named Nick Fenton. I haven’t ever met Nick in person but he had a really genuine way of explaining many of the option strategies I learned in the book. I was making money. This was easy!
And then it wasn’t. I paid my trader’s tuition. And then some more. I got “gambly.” I had no system other than picking stocks. It worked before, but wasn’t anymore. I got emotional. Overtraded and my position sizes were too big relative to my account balance. I bet bigger to make my money back.
The ups and downs were real. It took a toll one me outside of market hours. I made a mental note of the high water mark in my trading account and watched it decrease daily.
Don’t ever watch your trading account balance. Turn it off.
After a long period of frustration, I thought about getting out of the industry altogether. I hadn’t ever really failed like this. If someone in school was smarter than me, I’d stay up all night and out work them to get a better test score.
With markets I’m not sure if that helps. I don’t think so.
In summer of 2013 I came across Jeff Kohler at Trading Addicts. It’s a trader education site, not like AA addict. Although there were times I may have needed that too when trading wasn’t going well. Jeff helped me. Changed my way of thinking about markets. Slowly I came around, got sophisticated.
I didn’t know much about technical analysis when I met Jeff. It seemed silly. Prices make these patterns and prices have memory? Cool story bro. Doubt it. But then his trades seemed to work. More often than not. I asked him questions about free cash flow and stories about stocks in the news and unusual option activity. He asked me “how’s trading like that had been working for you?”
Good point Jeff.
I started picking up on this technical analysis thing. I started with basic trendlines, moving averages and loading up my charts with indicators. I had a screen full of shit and looked like I knew what I was doing. The more indicators the better. You can make them all different colors too.
I come to find out Jeff isn’t much of a fan of indicators. His charts seemed so simple and boring.
Mine were crashing hard drives when trying to load them. There is a right and a wrong way to approach technical analysis. Less is more. I know this to be true.
I went on and got fancy with Technical Analysis. Took some tests, got 5 plus years of experience, and was referred by three very kind mentors to the MTA Board of Governors. They sent me this in the mail:
It’s an honor to be a part of a society that has so many great members. Really established investors and traders. I’m the new guy, like I was back in 2007 when I started for Matt.
My approach to the market these days gets more and more quantitative.
David Aronson wrote a book called Evidence Based Technical Analysis. Pairing system testing and design with TA is very powerful. Plus I’m a math guy anyway. I love numbers. And if you get a handle on market sentiment, you are approaching having that “secret sauce.”
Market sentiment can’t be taught out of any book. You need hundreds of hours of screen time. I am getting closer by the day.
I spend way too much time doing this. I love it that much.
I am also getting more sophisticated in Elliott Wave, thanks to my buddy Todd Gordon. He runs TradingAnalysis.com and is a CNBC regular. Hell of a nice guy. Helped me a lot. He’s busy but patient with me.
I remember reading a tweet some time ago where one of the finance twitter guys said something like,
“If someone asks me to teach them about the market and he says how much he loves trading I know he’s an idiot.”
My eloquent response to him was, “You can fuck yourself.”
I shouldn’t have said that to him. I didn’t even have a question for him. I just wanted him to know what I thought of his comment. The same guy I come to find out was a member of several trading rooms, stole a lot of educational material and took it elsewhere, probably starting a service of his own. So many do that. Sad!
It upset me. There is no need for your ego driven macho response. Be nice to people. Maybe that person just wants to learn. We don’t all have all the answers yet. The market will smell his ego, and slap him across his pretentious face with it.
I promise.
I fell into this industry by accident. Along the way I have been fortunate enough to meet with people I truly look up to. Some of the people I converse with daily, I can’t even believe they give me the time of day. Industry heroes who have and continue to achieve levels of success that amaze me.
Maybe it’s my midwest background. I always strive to connect with successful people that have a story. That are real, genuine and hard working. I try to learn from them. I consider many of them friends. I want my friends to be more successful than me. Many of them are.
We are the average of the 5 people we spend the most time talking to. My friends probably notice me bringing down their averages, but I’ll always work my ass off to bring that average up for all of us. I love seeing people succeed.
Andy Swan does this thing every Monday on Twitter where he tweets, “TGIM.” He means of course Thank God It’s Monday. What a cool way to look at things. I feel the exact same way. I’d take it a step further and say Thank God it’s today. Thank God it’s everyday.
I fell into the industry by accident almost 11 years ago.
One of the best accidents I’ve ever been in.
Have a great weekend.