6 - The The Wheels Fell Off
Hey thanks for tuning back in...Here’s a quick recap…
It’s 1994, I’m married to Lisa, and I’m officially a trader.
I’m actually earning a damn good living at this and it’s blowing me away.
My golf handicap stands at 17.
I now decide that earning a living, a good living, just isn’t enough.
I want more… a lot more..
And to do that I need to widen my reach.
I need to trade more products.
I subscribed to every newsletter and alert service I can get my hands on..
The Gartman newsletter, The Hightower report and several others.
Between the hours of 5 and 7 am, my fax machine (remember those) prints steadily.
I spend at least 45 minutes every morning flattening out that annoying curled fax paper..
Still aggravates me when I think about it
And then… I start to do 2 things I’ve never done before... 2 really stupid things
1 - I started trading based on other peoples recommendations without doing my own research
2 - I traded products that I knew nothing about. …
I traded, corn, wheat, lean hogs, pork bellies etc…
If you started reading from my original post, you’ll recall that I studied Macro Economics in college.
The effect of currency fluctuations based on changes in interest rates, was something I studied and understood.
What the hell did I know about corn! Absolutely nothing
What in g-ds name made me think I could trade against a farmer with hundreds or even thousands of acres of corn..who regularly hedged in the futures markets?
I called my broker and told him I wanted to place a trade on Lumber.
LUMBER! he barked back at me.. You know who trades LUMBER …. NOBODY!
He was right, they market was so thin .. I clearly had not done my research
He refused to take my trade, told me I was off the rails ..
And he was right.. Corn, wheat, hogs etc… I was losing money hand over fist.
My system that worked so well on currencies was not transferable and it cost me a whack load to figure that out.
To this day I have a big hand written note on the pegboard in my office.
It just says LUMBER.. I know exactly what it means ..
And I heed that warning every day
Oh..by the way, I have several other notes and warning on my pegboard.
Want to know that they are?… you’ll have to tune in tomorrow to find out