Jan

11

They say that the greatest regrets people have at the end of their lives are not what they did, but what they didn't do, especially when you have another chance (James).

That might be true for those who are 'they.' My experience is lamenting what I did do. I could also lament what I did not do. I suppose a psychologist, psychiatrist and mental health worker would say I am guilt-ridden and over-taken by sorrow.

To the point of the discussion, however, I can attest to the value of gratitude. Mrs. Smith smiles a hundred times a day, and most of those smiles are in our conversations, in our togetherness. I've witnessed her in social circumstances among other people and observed the frequent smiles there too.

Mrs. Smith, my spouse of 36 years, begins every day with a meditation period, part of which is to write down 100 things she is grateful for. She says I am at the top of the list every day.

According to Mark, her smiles are in part a result of her daily practice of listing what she is grateful for. This is worth a try for anyone who wishes for a better experience of life.

I don't do the morning list but I do it mentally, and silently express gratitude whenever I embrace Mrs. Smith. This practice saves my life perhaps.

You could say I am dependent on the smiles Mrs. Smith brightens the world with. In that way I am sort of a co-dependent. I used to think co-dependency was for people who were not able to be independent. I think the pop-psychology that brought on the tarnish to dependency in relationships is a symptom of deterioration in all societal interchange of this era.

I am actually grateful for my co-dependency. And as Michael Savage said in one of his books, "I am grateful for my parents' co-dependency, because that gave me a stable childhood." (Maybe not an exact quote, see his books for clarification)

For list members, please know I am grateful to be here among those who share many of my interests; interests that have kept me sane through many years of troubling circumstances.

Dec

6

Economic geography plays a major role in world affairs. Geography is critical to whether a group can survive independently.

Water in quantity, during specific seasons that coordinate with sunshine, is extremely important to whether sufficient grain can be grown to support a group, a tribe, a nation.

Soil is another component to consider in the survival equation. Soil quality is not equally distributed around this planet.

So for Russia to have leverage over other geopolitical entities in regard to grain exports Russia must have the necessary conditions to grow grain in the quantities necessary. The geography of Russia puts the lie to any story maintaining that Russia can use grain as leverage in political and economic areas.

Soil, rainfall, sunshine, these are the ingredients in cereal. Russia does not have these in an efficient mix.

America does.

On the oil issue, I have no idea what our native reserves are. But Russia can’t operate oil and gas fields on an empty stomach.

Dec

3

It’s a Crime What We Don’t Know About Crime

If last year’s crime increase represents the start of a trend and more incarceration is the only available response, by 2014, one in ten Americans would be locked up every year.

That’s a brief look at the crime data for the present and future. Written by those who study crime with an academic viewpoint. From ivory towers.

At the street level where I see the grand picture, down here where people live, there is dirty linen not viewable from the windows in those high academic towers. “What we don’t know about crime” is inferred to be a crime in itself. But we do know things about crime which we claim not to know.

We have crime in business. And we live in denial about it. The local media will focus on crime committed by the underclass and ignore crime by business, unless it is a very giant scheme by a corporate entity which so many already know about that it cannot be left unpublished.

The AARP has published articles about scams that take money away from senior citizens. As a senior of almost 78 years I know I would be more safe in a security retirement center than in a city neighborhood. But we are not in danger so much from thugs as we are from people who wear the garb, the attire, of business and professions, and speak fluent English.

The automobile industry is replete with scams, frauds, deceptions, and I have found no agency monitoring this industry. An auto repair garage has a license to steal. These are business licenses given to entrepreneurs for a small fee. In one hour of scheming they earn the fee back.

“Repair garage” owners have the attitude that since they are regarded as “businessmen” this status gives them impunity from the ordinary rules of ethics. Of course, since the state takes no interest in their nefarious practices they are emboldened to stretch theft to extremes.

Since cars have evolved mechanically to become cyborg machines, with a miniature computer built into two dozen components of the vehicle, I have been unable to do my own repairs and thus have been subjected to fraud and rip-off for many years.

What is worse, community colleges with technical schools have been teaching students how to increase the income for owners when they are graduated to wage-producing positions.

The techniques for increasing profits are not ingenious inventions but are old trade practices developed by criminally-minded garage owners in the beginning of the repair business in America.

But now these techniques are mainstream. Ubiquitous. They exist everywhere, from the gas station guy who only does spark plugs to the cyborg, computerized, technologically perfect spacious garages attached to major automobile dealerships.

The schemes, frauds, deceptions are in small details which can easily be enumerated. Anyone reading this report has been scammed many times by auto repair people, by car dealerships too.

However ubiquitous these scams are - just as ubiquitous is the denial that they exist. They are not monitored by any agency with sufficient staff and power to discipline and shut down.

This theme began with the notion we have crime that we do not know we know about. In just one area I can show crime that goes on unobserved daily, right under the noses of everyone, including the police. And nothing is done about it.

When the underclass takes this all in I suspect many individuals see that crime pays. You can make a lot of money and what’s more you can get away with it. We’ll never reduce recidivism in the underclass with examples of business “crime for profit” staring us in the face every day.

Newspapers are in on the auto scams in that a big chunk of advertising income is derived from the automobile industry. In my view, guilty by association.

Of course, advertising is not causing the ripoffs at the repair garages; but the papers are not going to touch an article about these, nevertheless.

Nov

30

Vocabulary brings the world to an individual. Without words we are reduced to surviving by non-verbal signs and gestures, primitive. Basic survival.

Some have expressed irritation when I write about incarceration, convictions, and whatever is associated with penal servitude, but any convict can vastly improve his life if while serving time he takes up the task of building his vocabulary.

My grandmother sent me a Webster’s Dictionary and a thesaurus at my request when I entered Walla Walla State Penitentiary without more than a 9th grade education. I took a liking to words and began reading just the dictionary.

In adult life I carried a pocket thesaurus, in my shirt pocket, and whenever a moment was idle I would read it.

A pocket thesaurus, maybe leather bound, would be perfect gift for any occasion, as a birthday for a child with some basic language skills to evolve with.

One word can lead to another, to an association. One association leads to another, until the student has gone into another dimension and left others behind.

I did not however, leave my street vocabulary behind and I cherish the way it can embellish a conversation with exclamatory frills.

Stefan Jovanovich comments:

Ken would have been right at home in 1780. In the 18th century nine out of ten Americans could read and understand the King James Bible, and all who could afford it owned a copy. (Today only an optimist would argue that the number was higher than three out of ten.) The extraordinary exception of the American Revolution and the Federalist Papers comes from the fact that the “average” American of that time had a larger vocabulary than present day college graduates. That fact also explains the lethality of Continental marksmanship that the British Army so justly complained about. The use of rifled barrels has been the conventionally accepted academic explanation, but the far more likely one is the extraordinary literacy of the “ordinary” American soldier, who carried a musket (not a rifle). The ability to read and write and think correlates directly with the ability to shoot, as Scott Brooks’ postings and hunting skills amply demonstrate.

Those of us who hate the draft do so for two simple reasons: it is a reminder of how far we Americans have gone on the road to serfdom, and dumb conscripts make lousy soldiers. The two best memoirs of “ordinary” American soldiers were written by Joseph Plumb Martin and E. B. Sledge. The first was an 18th century farm laborer; the second a 20th century biology professor. Both were volunteers.

Nov

15

Religion is good for most people. Others with logic on their mind do not take to it well. Philosophers and big brain people scoff. Let ‘em. It’s not for them so why do they make an issue of it?

Religion is for people who need it. And why deprive people of a valuable resource, both spiritually and materially since life is so, so short and happiness is so so difficult to come by?

If Randians praise happiness and are atheists they surely ought to understand why others also seek happiness. What difference does it make how one comes to happiness?

Philosophy is nonsense. Leave people alone in their happiness. I recommend this book: The Power of Kindness by Piero Ferrucci. Be kind to fools and thinkers alike. It won’t hurt a bit.

Gary Rogan replies:

Religion does bring happiness to many people, that’s undeniable. Studies in behavioral psychology have indicated that human beings are genetically predisposed towards religious beliefs. Evil ideologies have in the past tried to control religious thought because it interfered with their attempts at mind control, therefore one always has to be suspicious at such attempts. Religious freedom is a litmus test of free societies.

Nevertheless, by definition religious beliefs are not rational. People are trained from childhood not to exercise the same level of skepticims towards “facts” associated with religions as they would towards most other subjects. Therefore, when a significant number of people acquire similar religious beliefs, religion often stops being just a force for personal fulfillment and becomes an organization force to achieve some real-world ends. Since religious beliefs cannot be argued with on a rational basis, if they happen to contain elements of intolerance or imposition of one’s will on others, they can and have led to great injustices imposed on those who don’t profess them. Even today, it’s a real possibility for whole cities and contries to be blown up in the name of religion.

The shifting lines between rationality and “magical” thinking patterns is something that has been with us since the dawn of our species. There are obviously no easy answers. People should be left alone in their happiness, but any attempts to impose their “happiness” on others need to be stopped.

Oct

26

This is real life stuff from someone I met a few years ago. It's a sad story of the downward spiral of a trader — but there are lessons here:

Dear Mr Williams,

Of course I don't know if you remember me. In 2003 we wrote some emails to each other. I'm the now nearly 28 year old man who wanted to raise a fund at that time. I was very passionate at that time and had a date with a special lawyer to take this initiative. He told me that this would take €120,000 to get it ready for real sales. Because I've not had this money I forgot the project and also forgot replying this to you.

Another result of our contact three years ago was that I bought your book "Right Stock at the Right Time" and was so convinced of the "Darlings of the Dow" system, that I bought the book another three times and presented it to people I like and recommended it much more often. Unfortunately I didn't follow the system, because I wanted to make "fast and more money" than 25% per year!

So I've lost and my portfolio has had a drawdown from €50,000 (much money for a 25 year old, I think now) at that time to now €30,000! I became a victim of banks and lost €10,000 with options. I wanted to make fast money and this try had to fail, I think now. The drawdown of the Turkish ISE Index two years ago cost me another €3,000. I invested €2,000 in two-day-individual-coaching by a top German trader who specialized in Fibonacci. If I had bought myself a good cigar and lit it with a bill I would have had a better return!

My last try to make fast, good money and maybe to live from my profits was, that I opened an account with a Swiss forex broker. In theory it worked, which means I ended the first two month with profits of 140% and 80% respectively. Unfortunately, this was a demo account! With maybe too much confidence in myself and the broker I opened a live account, and need I say that this Swiss broker plays customer tricks. So there is no comparison from demo to live! Although I thought I was prepared, well, this try failed too and I lost a further €5,000!

Now, I'm the disappointed owner of a €30,000 account and don't know what to do now. My goal is to live from my profits. In accordance to that I established contact with ###### (you probably know this Hong Kong system developer). He was so kind as to provide me with a performance report on one of his fully automated trading systems! Immediately I was convinced by a system which made 400% last year with a drawdown of only 10%.

In my opinion ###### is nice, but when I wanted to open a trading account with the only German broker who uses his strategy-runner, they warned me urgently. In their opinion he also plays tricks on customers. I phoned another German investor who bought one of ######'s systems and is trading a "big account" on it, and he also subscribed to the bad opinion of him.

Honestly I don't know whom to believe. I don't know what ######'s advantage would be, besides the leasing fee of $120 per contract per month, providing customers with non-working trading systems. All think that his systems are "optimized" on past data and will not be profitable with real money!

Sincerely, ###### ######

Mr. Albert replies:

This type of story is so prevalent in the day trading shops I've been in. Not having to listen to these anguished tales is the primary reason never to go back. I still blame myself for not shaking my friend as he froze and let a $5,000 loss turn into a $100,000 loss in the space of an afternoon in the fall of 1998. He lost his account — all funded on credit cards in his wife's name — and I never saw him again.

One lesson I've taken from my own recovery, and from watching too many guys lose much much more than they could afford to, is to have a back up non-trading plan and pick a loss number after which to stop trading for a while.

Of course, it seems like most successful traders have had at least one period of total ruin and several of massive loss. In fact there are very few great traders that I can think of who have had long term success without at least one total blowup. Often this story is the first chapter of a guy's figuring out a new method. If he can come back and find something that will work for him, then this first experience will be invaluable to him later on.

Ken Smith adds:

Thousands perhaps are in the backwaters of life because of the debacles in 1997 and 1998. These stories should be a lesson to those trading today, with the same systems enlivened with better kinds of flashing lights.

It was some kind of miracle that I took $25,000 and turned it into $115,000 back in the heydays. The market just went up and up and I could not pick a bad stock. I would make $10,000 in a few days.

Then the market turned and I did not recognize it, played the same game, did not change my style, kept reading web pages from the bulls. But the bears had taken over.

Then by the time I recognized my error the bulls had taken charge again and by that time I was listening to the bears. I lost both ways.

Oct

24

Every day when I walk into the soup kitchen in Blythe, CA, it’s like opening a Louis L’Amour novel where I learn a dozen useful facts of life. On today’s “menu”:

1. How to hang a door: Better hang it before you frame it, like the legal system, to ensure no cracks.

2. How to straighten a newborn chick’s legs: Peel back the shell of the abandoned egg, put the chick in the sunshine and dose it with a drop of vinegar and water every hour until it walks.

3. How to become an Indian for $100: Locate someone on a reservation to get the name of a recently deceased Indian and his birth certificate.

4. How to enter jail: Preclude hardships by entering with a full stomach, empty bladder, laceless shoes and beltless trousers (laces and belts are confiscated), warm shirt, memorized phone contact for bail, and cigarettes sewn into your clothes for barter.

5. How to make better soup: Join a food line.

Ken Smith adds:

I was in that kitchen with Bo Keely for a noon meal, on the house. All the throwouts from local restaurants went into a huge soup kettle then were ladeled out the local members of indigent society who shuffle around the town, sleep under abandoned houses, camp under bushes by the nearby Colorado River.

I was not able to figure out how Bo differentiates himself from these bums, but his mind is compartmentalized, with these bums in one compartment and himself in another. The main difference is Bo acquired an education, was once a national paddleboard champion, racquetball player, and knows how to artificially inseminate cows. And he walked across 95 countries around the world.

Why he ended up eating in a free kitchen soup house and sleeping in his car is a mystery. I visited him twice with to discover how I might affect his life. Alas, such intentions are common to fools. Moses couldn’t change his tribe; as soon as he turned his back they reverted to character. Jesus failed also, nothing has changed in human nature since he ascended to the heavens. I guess he’d had enough for a couple million years and will renege on his promise to return.

Bo has been out of work for years, to my knowledge. His last occupation was substitute teaching in the local high school. Out of work so long he has no employment record from which to draw unemployment benefits. In times past could be arrested for “no evident means of support.”

One thing likable about Bo is he doesn’t give a hoot what anyone thinks about how he eats or dresses. Truly he has created his own life.

Oct

18

I want my foreskin back. It’s gone forever though. I did not ask anyone to take it off. That violated my person. Religious ideas took away a precious part of the most sensitive organ in my body. They should go to jail for that, for life.

I was not asked about it and in fact could not have understood the language because I was too young to have a language. Religious criminals took away the skin that nature provided for protecting and acting as a cover for lubricant to the tip of my organ.

Rabbis and priests should have to suffer for the millions of foreskins that have been tossed into a hospital garbage can. These are crimes of abuse against infants.

And don’t blame my mother for being a simple dupe who believes religious crimes are justifiable. She was a good woman, acting in accordance with superstitious articles of faith passed down to her from the dark ages of ignorance.

Oct

13

As an experiment, I swallowed a 10mg Paxil tablet a few days ago and now feel ready to report on this aspect of the demise of American society. I begged the little green pill off a manic-depressive to better understand him, his so-called anxiety, and the smiling Paxil faces'I see walking around the high school where I teach.

This is the most common prescription in the world for depression, anxiety, bipolar disease, my favorite post-traumatic stress, premature ejaculation, and gambling disorder.

One daily 40mg tab was my adult friend's starting dose that I cut in 1/4 for the trial. I took it with a glass of water on a half-filled stomach to dull the effect. I kept a pen and notebook in pocket to record the effects and went for a walk in his garden.

An initial mild euphoria took hold in twenty minutes as I continued to smell the roses. I sensed the medication's smooth absorption via the gastro-intestinal tract and insidious entry into the CNS. I hadn't tainted the results with prior research to self-administration. Everything felt free and easy, not a care on earth. Yet I could still make notes and identify plants.

The Paxil high got heavier an hour into the trip, with the thought: Are you anxious? Depressed? Obsessive? Uneasy with people? Then Paxil's the drug for you. One problem: You may never quit.

The absolute worst feeling I got from the drug, that is perhaps what most users embrace, was becoming an Eloi. The sensation was distinct and lasted for two hours. The Eloi are one of the two post-human races in H. G. Wells' 1895 novel The Time Machine. In the year AD 802,701, humanity has evolved into two sub-species: the Eloi and the Morlocks. The Eloi are the attractive upper crust living on the surface of the earth, while the Morlocks live underground, working and tending machinery that provide food, clothing and infrastructure for the Eloi. The Morlocks continue to support the world's infrastructure and serve the Eloi who have undergone drastic physical and mental deterioration. Having solved all problems that required strength, intellect and virtue, they have slowly become miscellaneous dingbats. It is revealed that the Morlocks are tending to the toiless Eloi's needs as a farmer tends cattle — because the Eloi comprise most of the Morlock diet.

My next thought along the Paxil journey was to cry out. Just imagine a legion of Happy Faces drooling down the school sidewalks and into the SED (Severe Emotional Disorder) classroom that I once taught for Riverside County, Ca. Their so-called Paxil Faces are rounded, waxen with thickened lips and dreamy eyes reflecting a happy, soulless mind. I anguished at that stint before being dismissed for insubordination and arguing against kid drugging and withholding of my salary.

Finally, six hours after the first taste, I came down from my Paxil high. An annoying aftereffect was wanting more for the remainder of the day. Paxil Paxil Paxil. I took my notebook and feelings to my buddy who commiserated. He had tried to stop. He had twice tried to stop and each time had felt so physically wretched that 'the continued addiction was preferable to the withdrawal'.

I would not have to withdraw from this small, experimental dose, but sense that it can be done with a charismatic physician's advice, at a bangup clinic, by geographic distancing from the drug, or best of all with the support of a recovered peer. There should be a Paxil's Anonymous. It may take weeks, one milligram at a time, and with all that I've said, plus exercise, good diet and water, and plenty of work or hobbies, it shall be done.

One recovered from the Paxil habit should feel so accomplished that depression or anxiety is never an issue, just a bright future.

That's the short report of Paxil on trial. I've experimented similarly with a couple dozen other prescription drugs in the name of altruism. Paxil, and the stable of like SSRI (selective serotonin reuptake inhibitors) antidepressants, are hands down the most pathetic therapeutic craze I've witnessed since earning a Psych Tech Certificate two decades ago. By rendering a patient or citizen unwilling to make judgments and incapable of taking stands, there is no role for them other than in the vegetable garden of life.

It's the most amazing, most common prescription in the world. So many millions more could be dangerous if they get pointed in the wrong direction.

Ken Smith replies:

What are they in Denial about?

1. That the same political class that has been in office for decades will ever change anything.

2. That the ministers, rabbis, preachers, priests they listen to will ever tell them the truth about life; that religion is big business and nothing else.

3. That they can save money by spending money.

Dr. Janice Dorn replies:

The worst lies are the lies we tell ourselves. We live in denial of what we do, even what we think. We do this because we are afraid - Richard Bach

Why do we run from the truth? What makes us close our eyes and bury our heads in the sand rather than face what appears to be a harsh reality? Why are we compelled to cling to dysfunctional relationships and losing stock positions in the midst of increasing drawdown of our mental, emotional, physical, financial and spiritual capital?

We act this way because we are driven by hope. We behave in a certain manner because we want to believe that, somehow, somewhere, sometime, things will get better. We refuse to cut losses in our personal lives and portfolios because it is an admission that we are wrong, that we can't make good decisions and we will have to say goodbye again. The final saying goodbye to someone or something for which we yearned, lusted and made our own is painful. We cherished this as a possession, believed that everything would be fine if we were a little more patient, held on just a little bit longer and kept doing everything we could to make it right while, every day, we were dying slowly inside.

People have been coming to me with "problems" for nearly 30 years. Bad jobs, hideous and abusive relationships, childhoods from hell, depression, self-destructive behaviors, addictions, compulsions, anxieties, phobias and the devastating consequences of undisciplined and massively risky trading. It's always about what's wrong. After all, why go to a shrink or a trading coach if things are wonderful? Why celebrate the positive aspects of one's life when there is so much misery and despair? Why bother to take personal responsibility when it is easier to remain in victim mode?

My monthly Trading Doctor Newsletter was born out of these experiences, strengths and hopes…both yours and mine. No matter what, we are always determined to "fix" the problem, to make the pain go away, to stay with the losing relationship or the underwater position because we "know" that everything is going to be fine if we just keep working on it. It will be OK. The person we love will change and the stock will come back. Forget about the fact that it is ruining our lives, that we can't eat, sleep or exercise properly and can't remember the last time we felt any semblance of serenity or joy. Just deny that the whole thing is happening and everything will, like some magic trick, turn out just fine. Won't it?

Denial ain't just a river in Egypt - attributed to Mark Twain

Years ago, I bought many thousands of shares of a low-priced stock because I became convinced that it was the next best thing to sliced bread. I paid no attention to anything I read or heard because the stock was being touted by someone whose opinion I respected. It made no difference to me whatsoever that the company had less than competent management, massive debt, no revenues and one of the ugliest charts on the planet. For reasons which I will explain in more detail in The Trading Doctor Newsletter, I had grown, fostered and nourished a BELIEF that this was going to be the big win for me. I truly believed that I would get in on the ground floor and then watch with delight as Wall Street finally noticed what a groundbreaking product this company had and the stock would start going up and up. Visions of a ten or twenty bagger infiltrated my brain and made themselves perfectly at home in my limbic system. I started having personal feelings about this four letter stock.

I loved it, knew it was going to live up to every expectation I had about it, read every piece of news I could about it, told friends that this was the next biggest and best winner and it was only a matter of time before everyone would see the beauty and power that I knew. I was there first, so no worries at all. My belief system was so skewed and distorted that I could not see the truth. I did not want to read or hear anything negative about the stock since I was now in love with it to the tune of tens of thousands of dollars. I owned it. It was my prize possession and I felt like, in some way, I needed to defend it against all naysayers. Kind of like a marriage or a new relationship, I didn't want to hear anything bad about it. My brain was filled with the neurochemistry of new love and attachment, so please don't bother me with reality. Just like every other new relationship, stocks are entered on hope.

Please let me know if any of you can relate to the following quasi-delusional stinking thinking and denial of reality that took place in my brain over a period of two excruciatingly painful years. Please share with me if you can identify with the panoply of thoughts and feelings that ran through me day after day. Please tell me if you have ever felt like this, if your mood for the entire day was dependent on what was going on with one or more of your holdings. Please talk to me about this type of vertiginous, tortuous, torturous, neurotic brain scramble and how that is working for you:

Oops! What is going on? Almost immediately after I bought the stock, it started to go down. This can't be happening. I don't want to believe that it is going down even though I see it right in front of me. There must be something wrong. OK. This is just a teeny temporary correction and it will come back soon. Hmmm. I have a little loss here, maybe I made a mistake and should get out and watch it or read some more. No. That's not possible. I am smart and educated and this company is the next big winner, so I'll hold on and it will come back. What's up with this? It keeps going down every day and I can't sell now because I will be taking too much of a loss, so I have to hold on. Anyway, I know that the minute I sell, it will turn around and start going up. It happens to me all the time. I just know it. It's the market, and everything is being sold, not just my beloved four letters. I am a highly intelligent woman and I have made the right decision. I am not a loser and won't be a loser. I really want to win and this stock is going to come through for me.

As soon as the market gets a bid, it will come back. Anyway, I have decided that I am not going to trade it. I will just hold it for the long haul since the story is developing, good news is supposed to be coming next month, they are going on the road to get sponsorship and analysts will start recommending it. The chart now looks like death, but that doesn't matter because a lot of charts look like that and many have just turned themselves around into big winners. Maybe now that it's down 30% from where I bought it, I should buy more so that I can lower my cost basis. It wouldn't be that much money since the stock is cheap and just think how much I will gain once the Street "gets it right." But my rule says never add to a losing position. Maybe I should break the rule, just this once. Let me think about it and sleep on it and see how it acts tomorrow. WOW! It went up today. It went up 10% in one day, so things are starting to improve. Too bad I didn't buy more yesterday because I would have had that extra cushion and lower basis. Oh well. Not to worry, things are really perking up now and I was right not to take the small loss and even more right not to take the large loss.

Now I am back at break even and all I can say is "good for you for holding through". All that worry for months was worth it, and the market is now going to reward me for my excellent stock selection, patience and loyalty. Now that I am at break even, I no longer feel complacent, fearful or despondent. In fact, I am now a little anxious because I have to figure out how to sell the stock when it really starts to take off. Do I take a partial after it runs up another point or two, do I sell it all, do I just hold on to it as I see it run up even further? What if I sell it all and it keeps going? Ugh. That would really be a bummer, especially when I have waited so long for the breakout. Yes-it looks like it's breaking out, so I could actually add to it since it is now a winner—well, sort of a winner because it's just a little over break even. I know about buying breakouts because I read how so many people do it successfully and this looks like the time to buy more. But I already have enough and I am starting to feel increasingly uneasy since it is just a little over breakeven. Interesting how I didn't experience this when the stock was losing and I was down so much (on paper, of course). In fact, when I had the losing position it was easier because I didn't have to do anything. I just sat and waited and knew it would come back. And it did. Now I am starting to get really scared because I have a teeny profit and maybe I should take it. But–what if I sell it and it keeps going up? I won't do anything. I will just watch it and see what happens tomorrow. I'm a winner on paper so it is ok now.

There is the risk you cannot afford to take, and there is the risk you cannot afford to not take - Peter Drucker.

But it wasn't okay. The next week I sat in disbelief as the stock lost nearly 30% of its value. That was it. I simply could not take it any more. I was sick and tired of being sick and tired. I refused to endure one more minute of this. I was too good to suffer any more. I could no longer sit in misery and despair and wait for the market to throw me a bone so that I could get all excited and happy again. It was just simply too much torment and I was no longer taking responsibility. I was letting the markets dictate to me how I would feel that day. I was allowing the markets to exploit every aspect of my personality that would cause me to be weak, tricked and off balance. I had to get my head out of the sand, get out of denial and sell. Tens of thousands of dollars vanished into the market abyss. Two years of mental machinations and emotions which covered the entire range of any "feelings" chart I had ever seen. I bought with hopes and dreams and sold with despair and defeat. I ran screaming into the other room and then suddenly, I felt a sense of utter calm and tranquility. I was free from the daily suffering, the agony of thinking I knew something when it was really about how much I did not know. I was no longer a prisoner of brain scramble, endless tormenting of self and depletion of personal energy. By taking action I stripped through the denial and magical thinking. I took personal responsibility, empowered myself and gained great courage. Yes, I have scars and wounds which I cherish because they are there to remind me of hard fought times and lessons learned. It is idiocy to hold and hope, and bravery to admit you are wrong and get out before it's just gone too far. This experience is etched in my brain and written on my soul. I shall never forget so as not to repeat it.

I committed every one of the "Ten Biggest Blunders Investors and Traders Will Make in 2006-2007". I drove myself into a state of almost complete mental, emotional, physical and spiritual drawdown. I broke my cardinal rule of Don't Lose Money. I held on because for some reason I could not get myself out of denial. It was only when the denial lifted that I felt both courageous and free. I faced the truth and got out of hope and fear. Through this brutal experience I learned lessons which I teach to others daily. I know what it feels like because I have been there. I know what courage it takes to play this great game and to rid yourself of false evidence, stop playing ostrich and deal with the absolute truth which is staring you in the face.

In the markets, as in life, the only way to grow and preserve yourself is to get rid of what is not working for you. It doesn't matter if it's your relationship, your house, your pet or your position in the markets. If you do not have the courage to cut your losses, they will fester and take you down with them. To see and know in your heart what is right and not to do it is complete lack of courage. To be courageous is to do, in the face of seemingly overwhelming obstacles, what must be done. Courage is getting out of denial, admitting you made a mistake and taking personal responsibility. Courage is freeing yourself from the shackles of lies, hopes, dreams and white picket fences which are built on shifting sands. Courage is listening to the voice inside of you and following your heart which never lies to you. Only in knowing what is false does one come closer to the truth. Courage is the eternal and heroic struggle to find and face your authentic self, look it squarely in the eyes, and know that you are now becoming the person you want to be.

Many of you spend your entire life running from the mistaken belief that you cannot bear the pain. But you have already borne the pain. What you have not done is feel and see everything you are beyond that pain - Kahlil Gibran

Sep

25

In his memoirs Albert Jay Nock always argued that a major purpose of politics, aside from the plucking of the geese with the least hissing, was to gain inside information for wealth building. Certainly the increases in fortunes of many politicians whilst in office would be consistent with that, to say nothing of the implicit gain in wealth from their post-political lives, what with their previous connections and reputation. An example is the $500,000 speech of the former Washington dignitary in the week after he retired from office, and the comparable book and speaking tours of the run of the mill politicians, as well as all the lobbying possibilities.

All this was brought home by the recent French media reports of Bin Laden's death. What's amazing is that the emphasis of the story was on how peeved officials in France were that the information was leaked — which undermines their ability to act first on inside information.

This leads me to reminisce on the first time I realized that news always follows the price, and more importantly, it reminds me that there are a million people who know more about the impact of news than the average layman or hedge fund manager or ghost or consultant. During the drive for independence in Poland, when Russian tanks were flowing in to maintain Russian control, I was short a huge line of silver. My partner; who was a very influential professor at an Ivy League school, specialized in raising money from mavericks who needed the prestige of the donation to said school and had lines in to every professor of policy at the university. Richard Pipes was then the world's foremost expert on Russia and the "Professor" was induced to make a personal call to Pipes to find out what would happen. "They can't let the revolt succeed because it would cause dominoes to fall," Pipes said. It had such gravitas, it was so inside, so salient, that I immediately covered my short. I lost more millions on that than almost anything else I have ever done, as silver promptly fell from $14 an ounce to $9 an ounce when the Russians did nothing.

Since then I have always tried to remind myself how many experts know much more about public policy than I, and how unlikely it is that I would be able to figure out whether the additional information that I can glean from a newspaper might be bullish or bearish in its ultimate effect on the market, relative to its already discounted nature.

Ken Smith replies:

Physicist Brandon Carter said about counting:

What we can expect to observe must be restricted by the conditions necessary for our presence as observers.

Therein lies the crux overshadowing any hope the little man with limited information has for success in the stock market. His position as an observer is restricted.

The news he gets is behind the price. The indicators he sees reflect his behindness. Thus it is he always falls behind.

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