Reminiscences of A Stock Trader

My journey started in 1987 and it spanned until 2004. I entered the stock market industry with the dream of getting rich quick, this was the era when "greed Is good" made famous by Gordon Gekko and he eventually went to prison because of it.
I started out as a novice, with no money and went on to make 6 figure monthly profit trading for my clients and myself during the heydays of the 1990s. This is the time of my life that I thought that Money Really Never Sleeps, I was single and don't have the baggage of a family to shoulder. I would chill out in the evening at glamorous places in the City and be surrounded by beautiful people, wine and beers just flow like no tomorrow and usually end during the wee hours . So I 'm having a good life then and why do I quit the stock market ? Well, you 'll soon find out as you read further.
During my career in the industry I experienced many booms and collapses, which is a norm for people within the industry. What people outside the industry don't know is the "mood swings" experienced by people involved in it. I experienced the highs and lows of these roller-coaster rides which spanned 17 years. This feeling of insecurity and emptiness inside me provide a spark for me to start looking outside the industry, I dug deep figuring out what I want to pursue in the coming years ahead. Though this is one of the reasons but by no means the only reason for me to leave the industry.
There were four major crashes that I personally encountered during the course of my career in the stock broking industry. The first is the "Black Monday" of October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong, spread west through international time zones to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1738.74 (22.61%).. I remembered vividly the fiasco the financial communities reverberated throughout the world that particular day, because this is the first time I encountered such a major sellout in tandem. The Black Monday decline was the largest one-day percentage decline in U.S. stock market history then. This was blamed on the "excesses" caused by leverage buyouts funded by Junk bonds. The original "Wall Street" was based on the events that characterized Wall Street in the 1980s where it exposed two of the infamous Wall Street personalities of the time; such as Alan Milken and Ivan Boesky . Ivan, who went to jail for insider trading, made the original “greed is good” speech.
Michael Milken, the inspiration, in part, for the Gekko character, financed the hostile takeover by excessive leverage buy-outs . In real life Mr. Boesky secretly taped conversations with Mr. Milken, which helped send Mr. Milken to jail. Mr Milken, the so called "junk bond king" was eventually fined $800 millions and he gratefully paid without blinking an eyelid !
The "Gulf War" crash of 1990. The invasion of Kuwait by Iraqi troops that began 2 August 1990 was met with international condemnation, and brought immediate economic sanctions against Iraq by members of the UN Security Council. I remembered trading on that day, the market was making new high in the morning but by the time news of the Iraq invasion hits CNN, the market tumbled and closed substantially lower. My trading position in the morning was positive and by the time the market closed, not only my profits were completely gone but instead turned into losses ( luckily I still keep my shirt). Just imagine how vulnerable you can be if you over exposed your trading position.
The "1997 Asian Financial Crisis". This was blamed on the international hedge funds which aggressively hammered the Asian currencies down to their knees. This dis- stabilized most of the Asian Countries's financial systems. The stock markets across Asia collapsed wiping out trillions of dollars . This collapse was a blessing in disguise to these countries, which gradually fix up the weaknesses in their economies. That was one of the factors why these countries recovered much quicker (besides having high saving rate) than many developed countries after the September 2008 crash.The markets in the region gradually recovered, which eventually followed by the "Dot Com" bubble of 2001.
The boom that led to the Dot Com debacle.. Every listed company then that ends with a Dot Com (also refers as tech stock) was closely monitored. Any upward movement in price on any of these companies will usually follow by a huge increase in the volume of transaction and ultimately a huge surge in prices. Just when I thought the bulls are dead after the Asia Financial crisis, once again I was experiencing a fantastic ride to the bank. Fundamentals relating to stock valuation on technology stocks were flung right out of the window, internet related companies barely in their infancy with no earning records and usually still in the red were valued at least 50 times over their earnings. Insanity and greed eventually gravitate to the infamous "Dot Com" bubble.
I soon became disillusion with the stock market industry after the Dot Com collapse when trading activities became very negligible . In Wall Street 2 "Money Never Sleeps," Gekko says "It easy to get in but hard to get out". Well, I prove him wrong, I got out and never look back !
While stock trading and internet marketing may not have much correlation on the face of it, they do have some similarities. Greed which is prevalence in the capital market, is also presence in the internet (or network) marketing industry, just look at the hypes we are getting over our mails. Just how many times we felt for the quick-rick schemes and programs that promise to run on autopilot and make you instant riches. There are things that will never go away ; quick-money scams will always be around the internet and so will market manipulations in the stock market. To be successful whether you are in stock trading or marketing online, your must not focus on such distractions as the expense of your long term goals. Continuous education is a must for both industries if you want to stay in the game. You must be willing to learn new skills. Benjamin Barber, an eminent sociologist, once said, “I don’t divide the world into the weak and the strong, or the successes and the failures… I divide the world into the learners and nonlearners.”
Leverage has different meaning; in network marketing it refers to maximizing the efforts of both your upline and downline but in the stock market it means the number of times you can purchase equity stocks over and above the original amount you originally deposited with your broking company. While leverage is a positive buzz word in network marketing, it is often views negatively in the capital market especially when the market collapses. A big-time London money manager, Olar Rogge, who presides over Rogge Global Partners told Oliver Stone(the director of Wall Street Money Never Sleeps) “Leverage is the mother of all evils.” The crash of of 2008 which exploded between September and October was blamed on excessive leverage. Mr Rogge said, " we were minutes away from the brink of anarchy." I remembered the Dow hits bottoms after botoms technically speaking, even the financial gurus were caught with their pants down. When do we ever learn afterall greed is still good!
Just a quik note : Robert Kiyosaki is predicting that the mother of all stock market crashes is destined to happen within the forseable future. So guys and gals be warned and be on the right side of the coming "wealth cycle." Join Mike Dillard's EVG if you haven't done so.
Here are some comments from Jesse Livermore ( a legendary eccentric US stock trader himself:) on trading ih the stock market :
"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor."
"...the fruits of your success will be in direct ratio to the honesty and sincerity of your own effort in keeping your own records, doing your own thinking, and reaching your own conclusions."
"There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again."
"There are times when money can be made investing and speculating in stocks, but money cannot consistently be made trading every day or every week during the year. Only the foolhardy will try it. It just is not in the cards and cannot be done."
"Speculation is far too exciting. Most people who speculate hound the brokerage offices... the ticker is always on their minds. They are so engrossed with the minor ups and downs, they miss the big movements."
* Watch out for the impending stock market crash of this century*
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