Aww. U mad bro? Haters gonna hate. If you haven't put two and two together by now as to my natural writing style and generally nuanced level of communication, you never will. As for "hell of a lot of time on an internet forum," everything I post has personal benefit. Going through my trading library and reflecting on things -- coming up with the questions etc -- provides new insight and reinforces the old. The only thing I do that could arguably be construed as a waste of time is occasionally giving too much response to mental midgets and trolls who don't have the good sense to keep from embarrassing themselves... by picking fights they have zero hope of winning... may I suggest brushing up on the Dunning-Kruger effect, 'cause you're a walking case in point.
Considering I'm the one that started this thread, and there have been multiple expressions of appreciation for its content, you should once again be considering your own advice. Go pollute somewhere else. Pretty please. You too.
I can take plenty of heat and I'm happy to josh and joke in a genuine spirit of camaraderie. I'm just getting bored with the banal, go nowhere nature of our interactions -- which tend to lean toward blatant attention seeking on your part -- and I suspect others who come here for the thread's purpose (the trading wisdom excerpts) are growing weary of it too. As for your question on Mercenary, that aspect of the business model is more a friendly gesture, designed to facilitate connections and help out fellow traders, than anything else. The revenue generating aspects are minor. I only answer your question for the sake of others who might benefit from the answer, as I doubt you ask with any other intention than drawing more spotlight on yourself and causing more trouble. (And stop with the faux innocence bullshit, nobody is that gullible.) As far as Mercenary goes we are traders who eat large helpings of our own cooking, and as natural communicators we have found a synergy in the rigor and discipline of communicating views and sharing research we were doing for ourselves anyway. We have already made some excellent contacts on a global level that would have come about no other way -- including upcoming fund managers and potential investors in Europe, Australia and Asia -- who we otherwise would never have come across. The relationship we have cultivated with our good friend Peter Brandt is a shining example of why Mercenary Trader came into being in the first place. We are traders, pursuing long-held trading goals: Everything else grew organically from that as a natural extension of synergy and logical cash flow generation to stabilize the ups and downs of trading returns and OPM returns (thus lending the ability to be both perfectly aggressive and perfectly zen in our money management decisions, unconstrained by the need to pay bills out of trading capital -- as such we can better pursue excellent opportunities as we see fit, and also sit tight or trade small in the absence of such opportunity as we see fit). Again, I don't really answer this question for you, because I don't think you asked for any reason other than to instigate. Your insinuation that I don't understand the difference between good-natured ribbing and trolling is further evidence of bad analysis (read: dumbness) on your part that backfires in your ham-fisted attempts to apply it. You are a troll, or at least actively play the role of one here, and protestations to the contrary fool no one (or at least fool very vew). You have worn out your welcome with me, Surf -- something that happens via repeated instances of acting in bad faith -- and while I can't keep you from posting here I'd like to think you would give the courtesy of not polluting someone's thread when they ask (particularly if it is the thread originator doing the asking). I would certainly extend the same courtesy to you, and guarantee I will never show up trying to get attention by asking lamely loaded questions or posting snark in your market call journals or whatever it is you do. p.s. If the final paragraphs are too subtle, here's the short and sweet version: Fuck off.
Trading Wisdom 43: Billionaires and Poker "Several billionaires got their first stakes in poker games. Kirk Kerkorian funded his first business, the charter airline Los Angeles Air Service, with poker winnings. H.L. Hunt bet everything he had in a poker game and won his first oil well. Bill Gates, John Kluge, Texas oil mogul Clint Murchison, and corporate raider Carl Icahn all played poker for large stakes before they got rich. It's not just billionaires: Richard Nixon paid for his first congressional campaign with poker winnings and parlayed that into the presidency, where he continued to make risky bets but with less success. History is filled with people who began their routes to success with gambling winnings. You won't find as many equally successful people whose first stake was a bank loan or money raised from issuing securities. Even the losers can benefit. Writers from Dostoyevsky to Mario Puzo credited gambling losses for both the inspiration and the motivation to complete some of their greatest works." - Aaron Brown, The Poker Face of Wall Street JS comment: Barring the inheritance of a substantial family fortune -- or being handed the reins of an extremely lucrative business -- it is hard to become exceptionally wealthy without taking aggressive calculated risks. Knowing how to position for upside while managing the downside is thus a highly desirable skillset. In that light, why might poker figure prominently in the biographies of billionaires? Did the game hone and shape their instincts... or did their natures instinctively draw them to the game... or both? Calculated risk is the mother's milk of poker and trading -- two zero sum (actually minus sum) games in which variance dominates short term, but skill dominates long term. Do you remember the last aggressive calculated risk you took? Do you think about trading in these terms? Buy The Poker Face of Wall Street on Amazon Get Trading Wisdom via e-mail
Trading Wisdom 44: Stocks Can Go Anywhere "Yahoo! was one trade that I tend to remember from about 10 years ago, back when internet stocks were going to the moon. I came in one morning short the stock and some positive news came out, taking it up 20 points. Then it went up 30, 40, 50, and I was scaling out of the short, cutting losses as others were initiating shorts or adding to their losing short position. When the stock held at +50 points, I actually reversed my short and went long. By the close that day Yahoo! was up 100 points and I had made back my losses. I always remember this one because it beautifully illustrates that stocks are driven by supply and demand, and can go absolutely anywhere regardless of what you think they are worth." - 'The Equity Trader', Invisible Hands JS comment: "Pounding the table" for fundamentals on a stock holding, whether long or short, can lead to absolute disaster when price action aggressively disconfirms. The converse example of stocks like Yahoo! in the dot com boom -- where the float was so small that true believers had total control -- were various "cash box" value stocks in 2008, when the impact of forced liquidation selling was so extreme, companies saw share prices decline to market valuations below cash on hand in the bank. (These names eventually became fantastic buys -- just as Yahoo! eventually became a fantastic short -- but only after the supply / demand deluge subsided.) Why do so many traders become enamored of a valuation case, bullish or bearish, in absence of respect for powerful supply/demand drivers that may have nothing to do with the fundamentals fixated on? What are some ways to counter this mentality, or buffer one's risk of succumbing to it? Buy Invisible Hands on Amazon Get Trading Wisdom via e-mail
Trading Wisdom 45: The Search for Reality "The search for Reality is the most dangerous of all undertakings for it will destroy the world in which you live." ~ Nisargadatta Maharaj JS Comment: Becoming skilled at any sufficiently competitive and complex endeavor -- such as trading -- is, almost by definition, an evolutionary process. That means it is hard... sometimes very hard... Misconceptions have to be stripped away; gaps and flaws exposed; core lessons learned and relearned, sometimes to the point of extreme frustration; new competencies developed through meaningful investment of blood, sweat, and tears, all over an endless-marathon-like period that can stretch out for years and years. Is it any wonder, then, that so few evolve to levels of true mastery -- which, in alternative terms, can be described as knowing and embracing Reality on an intimate level via exhaustive dedication, passion and devotion? In an endeavor such as trading, the experience of pursuing mastery (i.e. conscious competence and functional intimacy with Reality) can be "world destroying" in the sense of brutally breaking down previously held beliefs and biases (particularly in respect to how things 'should' be)... requiring an unflinching gaze, day after day, upon truth laid bare. So much easier (less hard on the ego) to stay in perpetual delusion... to live with the lukewarm comforts of marginal success, halfway understanding, and limited bragging rights born of small-scale sporadic victories, than to reach deep down, push for the burn, and walk through the fire... Do you seek Reality (with a capital R) in your trading journey? Do you perceive the rewards (remarkable growth and long-run trading success) as worth the (from a personal investment perspective) potentially substantial risks? Get Trading Wisdom via e-mail
Trading Wisdom 46: Markets are Always... Wrong? "The prevailing wisdom is that markets are always right. I take the opposite position. I assume that markets are always wrong. Even if my assumption is occasionally wrong, I use it as a working hypothesis. It does not follow that one should always go against the prevailing trend. On the contrary, most of the time the trend prevails; only occasionally are the errors corrected. It is only on those occasions one should go against the trend. This line of reasoning leads me to look for the flaw in every investment thesis. My sense of insecurity is satisfied when I know what the flaw is. It doesn't make me discard the thesis. Rather, I can play it with greater confidence because I know what is wrong with it while the market does not. I am ahead of the curve. I watch out for telltale signs that a trend may be exhausted. Then I disengage from the herd and look for a different investment thesis. Or, if I think the trend has been carried to excess, I may probe going against it. Most of the time we are punished if we go against the trend. Only at an inflection point are we rewarded." - George Soros, Soros on Soros JS comment: "The market is always right" is one of the oldest trading cliches. As Soros shows, though, "the market is always wrong" can be just as useful as a standing hypothesis. Yours truly prefers to say the market is neither right nor wrong -- it just "is," in the manner of a mountain or ocean -- although prevailing opinion can be hugely wrong (misguided, irrational, delusional etc) at times. But any one view is tangential to the key points, which are as follows: * The lens with which you choose to view markets is personal, and to a large degree subjective. * The testing criterion of a market hypothesis, market metaphor etc. is not whether others agree with it or validate it, but how empirically useful it is in terms of generating real-world results. * If someone argues vehemently that their market lens is "right" and yours is "wrong," -- e.g. "If you don't agree that markets are always right you're a fool!" etc -- they are missing a key aspect of mental modeling, and oblivious to the fact that the utility of a model or hypothesis will vary from trader to trader, depending on numerous inputs. Which view do you gravitate towards? Do you see markets as always right... or wrong... or neither? Perhaps your paradigm invalidates the question? Buy Soros on Soros on Amazon Get Trading Wisdom via e-mail
Trading Wisdom 47: Intertwining Theory and Practice "Theory without practice cannot survive and dies as quickly as it lives..." "He who loves practice without theory is like the sailor who boards ship without rudder and compass, and never knows where he may cast." - Leonardo da Vinci JS comment: Theory without practice only survives in the suspended animation chambers of academia and government, where political survival skill, ideological purity, and self-perpetuating mediocrity (plodders promoting plodders) outweigh actual usefulness or merit. For theory to be useful, empirically observable benefit is required, via statistically valid real world result or confirmation by scientific experiment. Absent this qualification, future theoretical development is likely to bog down in false assumptions, starve for lack of food for thought, or otherwise wind up many miles off course. At the same time, those who shun theory in favor of practice -- just "getting out there and doing X" without bothering to reflect, inquire, and hypothesize -- give themselves much less opportunity to evolve and adapt. Practitioners who are "stuck in their ways" or partial to "the same old thing" eventually find themselves either 1) leap-frogged by innovative peers or 2) left stranded in a performance box canyon via shifts in the fitness landscape. The optimal path forward is a deliberate intertwining of theory and practice, in which roughly as much time is spent thinking about the process, articulating the process, and exploring potential improvements to the process, as executing the process itself. By paying close attention to real world results, questioning outcomes from multiple angles, and looking for incremental innovation / waste reduction / efficiency improvement at the margins, one gets the substantial evolutionary benefit of rapid real-time iteration and experimentation. Each trade, each investment, each reporting period etcetera becomes another opportunity for testing, adjusting, and improving as leaks are plugged, shortcomings are identified, and new capabilities are incorporated into the overall repertoire. Do you embrace the theory, as much as the practice, of trading? Do you see yourself as an empirical researcher as well as a trader? What deliberate steps do you take to intertwine theory and practice, for the sake of long-term investment in the trading process itself? Get Trading Wisdom via e-mail
theory of markets is dictated by the markets. Induction is never used. Taking the full offer by being in the market all of the time is a natural result. Practice is a derived rule set. There is no intertwining. I posted a "test of traders" it had 12 parts (T/F). I wanted anyone to be able to test the IQ/EQ of someone they were reading. It was deleted by moderators fairly promptly from a trader mining thread.