Making Money Should Hurt. Learn To Like It Rough.

High pressure, intense, almost feel like your losing your mind is what the grind feels like. When you see a bottle of liquor when the days over you should definitely think “I need a drink” because your day took a piece out of you that you wont ever see again. That means you are doing it right. If you are not your leaving money on the table. Don’t believe the kindergarten teacher that you can do it, listen to the naysayers who say you can’t because if you convince yourself you aren’t good enough, then you are inspired to become good enough. Then at that point, you will separate yourself form everyone. You will rise up. Just remember every moment of your life if your not trying to do something that betters yourself somebody else is and they are beating you to the punch while you sit there and jerk off.

The Godfather of Trading

My next installation in what I deem to be an epic moment  in investing and trading, the story of Jesse Livermore.  This man was the first of his kind and put together the playbook of how to trade. Also, his story teaches us that when you put money to work, why you should never break your rules.

” The stock market is never obvious. It is designed to fool most of the people, most of the time.” Jesse Livermore

 

While working, he would write down certain calculations he had about future market prices, which he would check for accuracy later. A friend convinced him to put his first actual money on the market by making a bet at a bucket shop, a type of gambling establishment that took bets on stock prices but did not actually buy or sell the stock.

By the age of fifteen, he had earned profits of over $1,000 (which equates to about $23,000 today. In the next several years, he continued betting at the bucket shops. He was eventually banned from most bucket shops for winning too much money from them. He then moved to New York City and devoted his energies towards trading in legitimate markets. This change would lead him to devise a new set of rules to trade the market.

During his lifetime, Livermore gained and lost several multi-million dollar fortunes. Most notably, he was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively. $100 million in 1929 would be over $125 billion today if put into Dow Jones Index with dividends reinvested.  He subsequently lost both fortunes. Apart from his success as a securities speculator, Livermore left traders a working philosophy for trading securities that emphasizes increasing the size of one’s position as it goes in the right direction and cutting losses quickly.

Livermore sometimes did not follow his own rules strictly. He claimed that his lack of adherence to his own rules was the main reason for his losses after making his 1907 and 1929 fortunes.

Livermore first became famous after the Panic of 1907 when he sold the market short as it crashed. He noticed conditions where a lack of capital existed to buy stock. Accordingly, he predicted that there would be a sharp drop in prices when many speculators were simultaneously forced to sell by margin calls and a lack of credit. With the lack of capital, there would be no buyers in sight to absorb the sold stock, further driving down prices. After the crash and its aftermath, he was worth $3 million.

He proceeded to lose 90% of that 1907 fortune on a blown cotton trade. He violated many of his key rules; he listened to another person’s advice (he preferred working alone) and added to a losing position. He continued losing money in the flat markets from 1908–1912. He was $1 million in debt and declared bankruptcy. He proceeded to regain his fortune and repay his creditors during the World War I bull market and resulting downtrend.

He owned a series of mansions around the world, each fully staffed with servants, a fleet of limousines, and a steel-hulled yacht for trips to Europe. He married his second wife, Dorothy, a beautiful Ziegfeld Follies showgirl, on December 2, 1918, when he was 41 and she was 18.

Livermore continued to make money in the bull markets of the 1920s. In 1929, he noticed market conditions similar to that of the 1907 market. He began shorting various stocks and adding to his positions, and they kept declining in price. When just about everyone in the markets lost money in the Wall Street crash of 1929, Livermore was worth $100 million after his short-selling profits.

Business Is An Art, Not A Science

andy-warhol-being-good-in-business-is-the-most-fascinating-kind-of-art-by-billy-name

I am always enamored my whole life by the art that is business. It seems so interesting and exciting to me. It has always had its own lingo, decorum and code. I always have seen it as the ultimate skill because if one is able to master it, you become a master at life in a way.  It becomes so many things wrapped into one. I feel like in today’s bizarre out of touch world we live in certain events which are landmark moments that capture what I am saying here are looked over, ignored and forgotten.  I am a huge fan of these historic moments because there is so much to be learned. It is a sense of style and class. That is why I would really like to stress the idea that it is an art. More so, today it is a lost art. All these people prancing around today considering themselves men of business when they are the furthest thing from good business. They wouldn’t know good business if they saw it. People shurged and say “It business”. No.

Today in institutions of higher learning such as college and in books they treat business as if it is a science. It takes the soul and art out of it which strips the core completely out. Business is the complete opposite of a science it is an art. There are countless examples of this over the past 30 years with the bombardment of economics, finance and accounting MBAs/ PhD’s ravaging the business world. There is no soul or creativity in any of it. It is a soulless amount of formulas and methods applied with one outcome that is suppose to be the answer. This has frankly stagnated, wrecked and destroyed companies over time.  There is no room for ingenuity, the unknown, foresight or “if” in their formulas or management programs. No room for abstract thinking. It has resulted in a penny wise dollar foolish mentality in the business world which is a rock bottom place to be.

It restrains companies or puts them out of business. These style lead to Steve Jobs from being ousted at Apple, IBM poo-pooing any of the ideas their employee’s brought to them, firms on Wall St. selling their souls for today and reputation hell later.  This causes a massive dislocation which destroys any sense of community and collaboration needed to create more wealth.  Short run over long run mentality. If someones brain is infatuated with the short run eventually the music stops playing and there is no chair to sit down on and you are out. One of my favorite all time quotes “The art of good business is being a good middle man.” That is the essence of collaboration and opposite of dislocation.

 

The Caregines, Rockerfellers, Mellons and Morgans of the world would look at today’s businessmen with disgust. Today you have companies with balance sheets that are too good. They hoard cash and penny pinch. They only care about margins and the bottom line rather than taking capital and putting to work in order to grow the top line increase that revenue. You cannot cut your way to prosperity. People today call that capitalism, which is pathetic. The father of Capitalism Adam Smith would spit at them. He often said largest margins of profit result in poorer society’s and growing society have smaller margins.

And lastly, its going to be a new tradition here on this blog, which I consider my journal or diary that I want to share with the world, if they care to read it, a snippet of history in the art of business. It is going to be tidbits of moments I feel are great and grand that set everlasting precedents. This time it is the Buttonwood Agreement.

The event took place on May 17, 1792, started the New York Stock & Exchange Board now called the New York Stock Exchange. This agreement was signed by 24 stockbrokers outside of 68 Wall Street New York under a buttonwood tree. The organization drafted its constitution on March 8, 1817, and named itself the “New York Stock & Exchange Board.  The agreement read

“We the Subscribers, Brokers for the Purchase and Sale of the Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever, any kind of Public Stock, at a less rate than one quarter percent Commission on the Specie value and that we will give preference to each other in our Negotiations. In Testimony whereof we have set our hands this 17th day of May at New York, 1792”

This set the stage for businesses to dream, spur competition and provide access to capital so those agendas could be nourished for success. A place where a middle man would find a buyer for a share of stock , sell it to another gentleman for sizable but small markup. A concept which is looked at today with such degradation because of some  bad seeds.

The World Is Not Fair Get Over It

pawns-2

I’m tired of hearing people point fingers.  The amount of folks walking around old and young, much worse with the latter, that feel they’re entitled to fair treatment is absurd. It is so crazy all these maniacs believe the world is suppose to be fair when nothing about nature is fair.  You can just look across nature and see that the world in which we live is the furthest thing from fair. It operates on being unfair. The world cannot just be sunshine and rainbows all day every day it doesn’t work like that. Everything is a about balance. Magnets have positive and negative sides. There cant  good be without evil because good would then just be nothing. People will get the short end of the stick that is just the way it is. Chance and probability determine that.

Some people are born with disabilities and some people develop disabilities they didn’t ask for. Its nature taking its course.  Some people are born into poverty or a terrible society of tyranny. People who complain if something isn’t fair just breeze right over these simple observations. Instead of embracing the value of not having these head winds thrown upon them from birth. The idea that something isn’t perfect is mind blowing to them. Its ridiculous because for majority of human existence people had zero chance of changing their fate. The two most important factors were where and when you were born, and you couldn’t change anything about. In today’s world people have the chance to alter the course.

Anyone who has something to complain about, the world has someone in it who is worse off than you. That person would die to be in the situation the complainer is angry about. The world also has a person who was in a worse off scenario, and over came it. There is no reason to complain. The idea to attempt a progressive change at creating a completely fair world is ignorant.  No matter what people will get screwed, some how some way. There will always be a company that does something wrong no matter the rules. There are always bad people. What we call the world was here first. Who are we to think we can change the dynamics? It will be here when we are gone and the wise decision would be to understand how the world works, and accept it for what it is. Act accordingly.

You take advantage of said setting.

Laying The Law Down: You Must Invest

there-will-be-blood-banner

I’m all for purchasing nice things. I love quality items. I purchase items of high quality because I enjoy them passionately or its something I will need to last.  Some times spending a large sum of money is the proper decision, because that course of action in life, is worth the large sum.

However, today day in and day out, you see people dropping large sums of money on ridiculous unnecessary items. Of course they like them, but that’s such a fake answer.  They do it for one reason and one reason only, to impress other people.  Over the past 30 years America’s economy has morphed into this massive consumption based economy. You hear politicians and economists on the television set talk of this all the time. They say things such as “we need to put more money in people’s pockets so they can go out and spend.” Economists even created a chart that the consumption stage is the most advanced part of the economic growth cycle past manufacturing.  That is kind of ridiculous because the idea of capitalism, in a historic sense, is relativly an infant still.  The jury is still out yet on what this period is for us. People who speak with such certainty on this topic need to be slapped more than once.

Now people might say whats wrong with people consuming. Purchasing stuff at the mall people make money that’s got to be good, no? Well what happens is consumption is what becomes the growth engine, so the economy, becomes extremely dependent on consumption increasing.  That is completely unsustainable or unreasonable to keep up consistently. This is so obvious in policies implemented such as extremely low interest rates enticing people to borrow so they can purchases homes, cars, and tons of clothes for which they have not earned the money to purchase.

People are competitive ion nature. One must  out do the other. In this case its disastrous. It creates a culture focused on material goods.  Now the amount of money in your bank account doesn’t matter because the world cant see that. They see whats on your body, wrist, where you live and what you drive. Weather is a cash transaction or borrowing people squander their money. Consumerism ,taken a stranglehold over Investment and Savings.

People need to leave the insecurity at the door. The best medicine is knowing you can look at everyone and know you have more power than them and they have no idea. Your wallet, your bank account, your portfolio makes them insignificant. Sooner or later these flash folks you know will have shot their load. Their worshiping of material goods is the equivalent of the young college girl blowing her load the first night she goes out drinking, getting carried out by 11:30 because shes dumb. You are sophisticated person sipping the cocktail of your choice working on that nice buzz plotting where the parties going to next.

When you buy things don’t get caught up in fads. When you drop a ton of cash on some items you like, picture how they work into the person you are going to be when your enjoying all the money you saved and invested.  Purchase things that are you, not things that make you blend in.

The winning scenario is to be liquid. The value of items is fleeting and evaporates at staggering rates. Pure junk. Everyone will find themselves waking up one day with the weight of the world on their shoulders. Wishing for that chance to do things different but it is too late.

Its absolutely necessary that you set up trust accounts, IRA’s, invest, buy property before you buy that new Range Rover, the Jordans, the Breitling and all that bottle service.  Be smart and try not to live your whole life now, for it’s going to last a long time. It is smart to live in the moment but you need to do it wisely. Life is short and could end in the quickest of fashions. That is why its important to cherish the time you have. The great paradox is, as precious and vulnerable that time may seem, we human beings have a distinct way of surviving the most traumatic and intense experience. We overcome bizarre odds and the moments thereafter, are when you need that money.

Fortune Favors The Bold | 10 Things Highly Confident People Do

1. They don’t make excuses.

Own it. Highly confident people take ownership of their actions. They don’t blame people or traffic for being late; they were late. They don’t excuse their short-comings with excuses like “I don’t have the time” or “I’m just not good enough”; they make it happen.

2. They don’t run from fear.

Fear is a liar. Plain and simple. Highly confident people don’t let fear dominate their lives. The things they are afraid of doing are the very same things that they need to do in order seize the day

3. They live close to the edge.

Let it ride. Highly confident people avoid the comfort zone or safety net, because they know this is where dreams go to die. They actively pursue a feeling of discomfort, because they know leaning over the edge is mandatory for their success.

4. They don’t put things off.

Keep it moving. Highly confident people know that a good plan executed today is better than a great plan executed someday. They don’t wait for the “right time” or the “right circumstances”, because they know these reactions are based on a fear of change.

5. They don’t obsess over the opinions of others.

Highly confident people don’t get caught up in negative feedback. They don’t get caught up in negative opinions that they can’t do anything about. They know that not everyone is loyal. The devil was once an angel. Not everyone is going to be your friend forever.

6. They don’t judge people.

Highly confident people have no tolerance for unnecessary, self-inflicted drama. They don’t feel the need to insult different opinions. They are comfortable in who they are that they do not feel threatened by different people or things.

7. They don’t let scarcity hold them down. They embrace it.

Resourcefulness. Highly confident people find a way to make things work with what they have. They know that all things are possible with creativity and a refusal to quit. They don’t agonize over setbacks, but rather focus on finding a solution.

8. They don’t make comparisons.

Highly confident people know that they are not competing with any other person. They compete with no other individual except the person they were yesterday. They know ff you do tomorrow what you did today, you will get tomorrow what you got today.

9. They don’t fear telling people what they don’t want to hear.

Highly confident people have no problem being the bearer of bad news. They are aware that not all people get along, and that’s just how life works. They focus on the quality of their relationships, instead of the quantity of them.

10. They don’t avoid life’s inconvenient truths.

Highly confident people confront life’s issues. They nip it in the bud. They know that problems left to fester have a way of multiplying as the days, weeks and months go by. They would rather have an uncomfortable conversation with their partner now. Bigger the top, bigger the drop.

I plan to slaughter, not today, not tomorrow, but the future

12-angry-men-pic-6

My thoughts on the past couple weeks is what this is about. I manage money, investments, or conceptualy people’s financial futures. Personally I feel managing money for folks is tightly linked to how one conducts life itself. In simpler terms it is completely psychological.  Compare it to a game of chess or poker it is all about strategy and decision making.

The masses always overreact and panic. It is what they do. The bigger something becomes the more dumb and slow it becomes. Feeble becomes the mind. Money is emotional for people and my job in handling their assets to strip the emotion from it. When emotion is introduced into decision making it becomes skewed. Remaining objective is always key. The media and masses have been calling for a market top. Comparisons to the internet bubble, crash of 87 and 1929 are made.  Regular people tell me in conversation “this market has to be topping out” and I waiver my head. I choose my words wisely because I do not want to insult and come off to brash. The answer to them in simple though. If everyone expects an outcome, that is not the outcome they will receive.

The truth is I do not believe this. What has changed? I have bought this blood over the past two weeks and have had to add because it has kept bleeding. I will not deny this is ugly. Its borderline horrific on my end. I am what professionals would say is a “bagholder” at the moment. In conversation some of these stocks I mention deliver looks as if I told people I have the AIDS.

The truth is most of companies that participate in the blood bath are the very best companies of the future with business models that keep growing. Its almost a crime or rather gift this has happened in these stocks.  Your prerogative.  I am normally an active guy constantly rotating in and out of names taking nice sized gains parlaying them into something new and fresh ready to move. Taking risk off the table selling into strength to find more strength to sell into.

However, I am of the cloth that you trade the tape in front of you. There is no trade on the long side here. The trade is short and I do not do that for my clients. I am in standing strong. Pounding my fist on revenue growth, enterprise value, cash flow and future prospects. I am harnessing my inner Rothschild and buying all of the weakling blood that is filling up the streets.  To sell here is to give in. To sell means you have been had. That’s what the average Joe would do. Hedge funds got caught over leveraged and are dumping the stocks they own. Its atrocious and I need to ride the wave out of it. I am not a bitch and I know these stocks which are being slaughtered will go higher. If every fighter quit when they got punched in the face there would be no champions.

Multiple algorithms I use say we are oversold. Just simple math on percentages say we are oversold. Fuck naysayers they can lick my ass cheeks and the sick bastards that call this healthy are liars and do not have money in this market. Its a bloodbath of hedge funds. They want to shake the weak hands out.

I am positioning myself and clients for greatness.  Sour puss people are looking for negativity in the best of businesses. They harm these stocks but do not realize when it is all said and done these stocks will have there vengeance ten fold.

Haters gonna hate. Haters will be slaughtered.