Zubin Al writes: 

Recently at a restaurant at lunch, two blue collar guys, one older, one
younger guy with a beard, both  in electricians uniforms sit down and  I
overhear the young guy explaining to the older guy about buying stocks,
and how if they double how much money he can make.  He says he doesn't
care how much it goes down, and that he will hold on.  The conversation
moves to Bitcoin, and the younger guy doesn't quite understand how it
works but that it keeps going up. To myself I'm thinking, "hmmm".  I
remember in late 1999 walking into the broker's office where I see a
young woman who I remember waiting tables there buying stocks.  I recall
taxi drivers during that same period talking stocks as conversation in
the cabs.

I wonder, is it different this time?

Dr Gangineni Dhananjhay writes: 

I have also got a similar experience in India. Near the brokerage
company where I regularly go to trade, I visit a Coffee stall. The
person running the coffee shop started giving stock advice. Which stocks
to buy and sell and general market opinion. I got afraid. Of course
this is an anecdotal evidence. I am seeing more of my relatives and
family members giving me stock advice. Time to be cautious ??

Jack Cook writes: 

For me, the Spring of 2001 'Aha Mr. Livermore, this is the top?  My
Masseuse was working on my lats and telling tales of retiring on all the
Cisco stock he had.

He is still my Masseuse.

Best in 2021


TikTok and Discord Are the New Wall Street Trading DesksCaitlin McCabe, Gunjan Banerji and Mischa Frankl-Duval-WSJ. A
new army of social media-enabled day traders is helping push stocks to
records and turning companies into market sensations. As trading by
individual investors boomed during the coronavirus pandemic, so has the
popularity of online communities where they gather. Platforms including
TikTok, Twitter, YouTube, Reddit, Instagram, Facebook and messaging
platform Discord have become the new Wall Street trading desks.
Individual investors gather to talk about hot stocks like Tesla Inc.,
boast of gains and commiserate about losses. These investors do more
than just talk, though. They piggyback on each others' ideas and trades,
helping fuel the momentum that has propelled some companies to
triple-digit or bigger gains in 2020.



BusI have found myself subconsciously applying my trading rules and experience to life events. Cutting losses early and getting rid of bad position without waiting or hesitation is one example. One small anecdotal example: My wife booked an ordinary bus ticket to see her sister. She is reluctant and wanted to go in a different, air-conditioned bus. But the reservation clerk refused to refund any money as the bus is about to start. I immediately decided to offer a 50% discount to the ticket collector of the bus who can sell it at full cost to any other passenger on the way. Thus I have traded my bad position and cut my loss while at the same time keeping my spouse happy. I think this is one of few times she appreciated my trading skill.



 My favorite excerpt and handout for all MBA (Finance) students before starting a class on Forex or Financial Markets is "The Old Speculator and the Yen" from EdSpec. The mind starts playing games once you are on long wait with the market. Particularly in India where I am forced some times to trade in the Brokers' office which is not very different from a poker table. The situation is exactly like the post "How not to run a trading Operation." No wonder public always loses more money than they have any right to. With unsolicited, free opinions flying around, cries and howls of a missed trade recognized by hind sight, reckless regret of past mistakes, criminal recounting of past price in comparison to present prices (as if price has an obligation to return with out regard for the operating context) losses are guaranteed to happen.



Ed SpecI discovered Victor Niederhoffer accidentally when I chanced upon his book Education of a Speculator in Indian Pavements, a seller of used books. I immediately grabbed with both hands at the ask price. Since then it's been a long process of education and self discovery. Even my nine year old daughter Gangineni Hita understands Victor and is fond of his stories, read to her occasionally at nights. As a teacher of finance, the first reading assignment on markets I give to graduate students is "The Old Trader and the Yen" from Ed Spec.

Constantly following Daily Speculations from 2005, I feel part of this soul searching revolution. I have read and re-read discovering new meanings in Ed Spec. The contribution of Victor to financial markets and his winnings outweigh any temporary trading losses.

Gangineni Dhananjhay continues:

I find it puzzling how so many market participants resist exposure to true knowledge. Is public willing to believe half-truths rather than facing facts? So much of what I try to teach from finance text books and theoretical models also goes against intuitive understanding of markets.

As the saying goes ”when the student is ready, teacher appears”. When I try to make analogies of the market as a dancing girl who becomes a witch and other effects of Vig & Spread, students are not ready and want to believe in the text book models of Fundamental & Technical analysis. How many students realise market owes no body anything and it’s a perpetual dance replenishing the market infrastructure itself.

As M!chael L#wis puts it in his article The Evolution of an Investor ”Your [the market intermediaries] job is to turn your clients’ net worth into your own”.  Victor speaks in PracSpec about how market will not allow public to access real knowledge so that they can keep contributing. The law of ever changing cycles always keep the form away from the public. One thing that strikes me is how deep and how hard these legendary speculators swim in the markets . Many can't sustain the draw downs to experience their winnings.

“Speculator” has been defined and given a true interpretation in EdSpec. I devote sufficient time to differentiate between ” Investing, Speculating , Gambling” when I teach or discuss with students & market participants. But the lines get blurred once in thick of action in markets.


Resources & Links