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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

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