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To RealTraders:
Here's a column that appeared in a South Florida business publication. I
think you'll get a kick out of it.
Mike
Daytrading
When You Need All The Protection You Can Get
There was something wrong. There I was at Mr. Joe's, a friendly sports
watering hole where, for years, I had stopped after work to quench my thirst.
Many of the faces were the same. There were yuppies, generation X'ers,
Armani suits and flannel shirts, old codgers and young punks, males, females,
and a few I wasn't sure about.
Something was missing. It was 6:30 and I didn't hear those bar sounds - the
sounds of clinking glasses, arguments, gossip, and dirty jokes. Where was
the laughter? The familiar sound of guys getting shot down? The sound of
anything on ESPN? It was just too damn quiet.
Suddenly a hush fell over the bar. In unison, heads turned toward the
televisions. A voice on the TV said, "And in business news, technology
stocks powered the market ahead as the Dow was up 113 points and the NASDAQ
was up 24. The S&P advanced 14 points in reaction to this afternoon's
announcement by Alan Greenspan's announcement that the Fed will not raise
interest rates."
The crowd clapped and cheered. I hadn't heard a reaction like this since
the Marlins won the World Series.
Things have changed. We're in a bull market. It started many years ago,
but only recently have people recognized the power of the stock market.
People of all ages and backgrounds are now invested. Their life savings are
on the line every day and their moods swing with the volatility of the
market.
The American pastime has gone from baseball to monitoring your stock
portfolio or mutual fund positions. Some people have taken it a step further.
I saw Leonard as he approached. He used to be an electrician. Always a
class guy, Leonard's business card read: Let Us Remove Your Shorts. He was
smiling. "I made $5,000 today, let me buy you a drink." Considering what
electricians charge, it seemed reasonable to me.
It looked like he had put on a few pounds so I mentioned that he appeared
prosperous. Leonard said, "Oh, this?" as he opened his jacket to expose a
bulletproof vest. "I'm not an electrician anymore. Now, I'm a daytrader.
This is just part of the uniform. Ever since that guy went nuts in Atlanta
and killed all those people, we wear these vests," explained Leonard. "We
even have to go through a metal detector. It's almost as dangerous as
working at the post office."
I asked him how he learned. "They give you a two week training course,
four therapy sessions and then we're on our own." he said. "These guys get
pretty personal. The first day some guy took me aside and told me he was
short. That was a lot more information than I cared to know about him."
According to articles I'd read, only about 15% of daytraders actually make
money. "It's basically a matter of ego and self-discipline," explained
Leonard. "Most daytraders were professionals in other fields. They were
doctors, lawyers, and big shot executives who aren't used to admitting
they're wrong. The secret to making money daytrading is to cut your losses
and preserve your capital. To do that, you have to admit you're wrong.
Every bad trade is a blow to their egos and they have no one else to blame it
on. They get hooked on 'hopium.'"
"What's that?" I asked.
"Hopium is a daytraders disease. It's when you hold onto a bad trade and
hope it comes back. Before you know it, they'll fill up a whole wing of the
Betty Ford Clinic to it and Jerry Lewis will be doing telethon."
The patrons were still fixated on the TVs. "A merger was announced this
afternoon," the reporter said. "Knott's Berry Farm and the National
Organization for Women will merge to become Knott NOW."
I don't think I'll be buying shares of that company - not NOW or later.
Me? I can't even afford a bulletproof vest.
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