Trading the stock market is not the blood sport that many in the press portray it to be. That sentiment is just part and parcel of Wall Street’s sophisticated disinformation machine which preaches a familiar old sermon to individual investors. The market pitch goes something like this: “the market is too complex and you individual investors do not have the tools (or the smarts) to effectively manage your own money…so give us your money to manage for you” (so we can collect enormous fees). I think not, Mr. Market – I beg to differ.
Quite the contrary, it’s more like Salmon Fishing in the Yemen. I had the good fortune of stumbling across this wonderful movie (2011) starring Ewan McGregor. In one segment of the movie, Ewan’s character, Dr. Fred Jones, is standing waist deep in a river fly fishing with the sheik (played by Amr Waked) who launces into a poetic soliloquy about the egalitarianism of fishermen around the world. As he spoke, I couldn’t help but become captivated by the parallels to my world. What I came to realize is that I love the markets for both what they are and what they are not.
Beware: if you are a gunslinger, an impulsive rule breaker or an irreverent gambler, our arena may not be a comfortable place. If you tend to be the political type who constantly talks more about potential than actual performance, if you are more concerned about how your clients think about you than how their portfolios grow, or if someone has ever accused you of using smoke and mirrors, then trading the markets will expose you. The markets will not allow you to claim to have exceeded expectations or achieved superior results if such is not the case. The markets always root out the imposters eventually.
If, on the other hand, you are willing to be judged solely on the basis of your performance and you are motivated by a need and willingness to better yourself on an ongoing basis, I would enthusiastically invite you to join our fraternity of traders and investors.
I’ve been accused of being a romantic, but I believe the act of trading the markets is a uniquely pure experience. Our fraternity of traders simply embraces our charts and is passionate about our trades. Am I naïve if I believe this is a pure expression of capitalism? To some extent, don’t we all wish our corporations, our government, even our relationships were all this pure and well-defined?
At this juncture, I think it’s imperative to explain why I personally describe trading the markets as ‘pure’. The purity of my experience is based on these observations:
- As your own boss, you can choose whom you work with or you can choose to not work with anyone at all.
- You can pick the months of the year that you want to trade and to some extent the hours, too.
- You can choose where you work and choose your own work attire. The Hugh Hefner pajama pants look is totally acceptable.
- You can choose what you want to trade (stocks, funds, options, ETFs, etc.) and you can decide whether to be a buyer with an optimistic outlook or a bear selling short.
- The trading rules are clearly established and (usually) apply to everyone in the same manner regardless of how “individualistic” you might think you are.
- Your investing routines, tools and methodologies can be customized to fit you as comfortably as a fine Savile Row tailored suit.
- Finally, my favorite: you have the ability to take your “office” on the road. Show me a comparable job or hobby that allows you to earn a living while in Maui one month and in Philadelphia the next!
Your reasons for being passionate about the markets are different and no doubt your own, but I do challenge you to understand what they are and what explicitly motivates you. For the trader, the winning virtues are merely patience, humility and tolerance. In the end, the passionate and disciplined trader will be rewarded for his faith and consistency with a winning trade. Of this I am certain. My only hope is that the rest of the planet will become a little more like us over time.
The bottom line seems to be this: let’s all compete really hard, but just don’t break the rules. If you do, we kick you out and you are not allowed to play the game. Now if only the rest of the world would subscribe to our mantra.
Trade well; trade with discipline!
-- Gatis Roze