People have been asking/calling/writing me about whether or not I'm ready to jump off of a bridge because my main source of income is the stock market. This post is to put to rest any fears that you might have for me. Yes, I trade stocks for a living. However, because most of my market activities are of the day trading varieties, I am not hurt by a falling market. The joy of day trading is that I don't have to care what stocks do as long as they move. If they go up I buy and if they go down I short. The worst markets for me are the ones that do not move at all or are turbulent all day (i.e. up, down, up, down, etc...). I would love for all of the stocks to go up so that everyone makes money, but I am more than protected when they are down. It's really a luxury to have no emotional attachment to the stocks that I trade. However, if you are still worried about me, feel free to send me money.
People have also been asking/calling/writing me about what they should do. I personally think that now is a great time to be buying stocks for the long term. Yes, the stocks will continue to go down, but you nor I am smart/lucky enough to get the lowest price before a stock starts its ascension. In my opinion, there are more good companies getting beaten up for no other reason than fear than there are companies getting taken to the wood shed because they conducted bad business. If you are going to buy stocks and look at them everyday and worry, then maybe you should stick with a mutual fund. However, it would be wise in my opinion to do your research, find the undervalued good companies (it's not hard), buy stock in them, forget you even have stocks, and then look at your account in a few years and see how much money you've made.
These are just my opinions. I could be dead wrong. However, if I am wrong, I'll be the guy salting the french fries that you just pulled up out of the vat of oil. Maybe we can carpool to work together to save some money.
John Yam was nice enough to send me a link to an article on the Bloomberg website the other day. He's crazy, but this guy just might be our new hero:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLmRPHKZLYmY&refer=home
Lahde Quits Hedge Funds, Thanks `Idiots' for Success (Update1)
By Katherine Burton
Oct. 17 (Bloomberg) -- Andrew Lahde, the hedge-fund manager who quit after posting an 870 percent gain last year, said farewell to clients in a letter that thanks stupid traders for making him rich and ends with a plea to legalize marijuana.
Lahde, head of Santa Monica, California-based Lahde Capital Management LLC, told investors last month he was returning their cash because the risk of using credit derivatives -- his means of betting on the falling value of bonds and loans, including subprime mortgages -- was too risky given the weakness of the banks he was trading with.
``I was in this game for money,'' Lahde, 37, wrote in a two-page letter today in which he said he had come to hate the hedge-fund business. ``The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.
``All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God Bless America.''
Lahde, who managed about $80 million, told clients he'll be content to invest his own money, rather than taking cash from wealthy individuals and institutions and trying to amass a fortune worth hundreds of millions or even billions of dollars.
``I do not understand the legacy thing,'' he wrote. ``Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.''
Request for Soros
He said he'd spend his time repairing his health ``as well as my entire life -- where I had to compete for spaces at universities, and graduate schools, jobs and assets under management -- with those who had all the advantages (rich parents) that I did not.''
He also suggested that billionaire George Soros sponsor a forum in which ``great minds'' would come together to create a new system of government, as the current system ``is clearly broken.''
Lahde ended his letter with a plea for the increased use of hemp as an alternative source of food and energy that segued into a call for the legalization of marijuana.
``Hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products,'' he wrote. ``Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term.''
`Innocuous Plant'
He added, ``The evil female plant -- marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country.''
Lahde said the only reason marijuana remains illegal is because ``Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other addictive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers.''
Lahde graduated from Michigan State University with a degree in finance and holds an MBA from the University of California, Los Angeles. He worked at Los Angeles-based hedge fund Dalton Investments LLC before founding his own firm two years ago with about $10 million.
Lahde wasn't available for comment. A woman at his firm, who asked not to be identified, confirmed the authenticity of the letter.
To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net
Last Updated: October 17, 2008 16:27 EDTJohn also turned me onto http://sadguysontradingfloors.tumblr.com, a site with pics of market traders and their captions. It's pretty priceless.
Nikkei, please.
2 comments:
i had a feeling you would be ballin' out of control shorting. thank you so much for posting that article. i am still laughing.
that dude is my hero too!
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