Someone posted in the comments they were bothered by the appearance of new posters without an introduction. I am posting an interview from another site that explains my approach.
I am basically a maritime %ist. Any stock in a storm any direction, for me its all about the color (for deadwood fans). Beyond that the market has no meaning to me. It is a shell game that very infrequently gets me excited about an actual company.
For those bothered by the guest posts I suspect relief is coming. I am guessing that Senor Knight will do something like Zero Hedge with his content on the main page and guests on the side or header. In the mean time try and use nerf pitch forks and LED torches so we don't get too hurt.
What is your primary background?
My primary background is painting/sculpting/scribbling, which means I am free to interpret the world without pressure from hierarchy or medium. The disadvantage is no structure, funding, or consumers. I spend some of my time trying to invent a self inflicting pyramid scheme of product. I try to start with small idiot devices of little use in order to bankroll more complex useful devices. I have yet to fully file a patent or sell a product. I also work on theoretical ideas that are somewhere between crank/imagination and perhaps usefulness but with little math skill or presence in an academic environment I am just making anonymous noise.
How did you get into investing?
I am a gluttonous and perhaps degenerate gambler. I enjoy numbers, randomness, and risk. I was interested in casino gambling a long time ago but I recognized there was nothing about it that could be profitable unless you found a manufacturing flaw and exploited it. If you ever meet a gambler who says he has a system and makes money with it, hes lying. There is only one casino game you can play in the world and make money on the game itself and not the secondary systems around it, and that’s the stock market. The markets “odds” are exponential to your skill unlike casino gambling with the possible exception of poker.
Two events led me to investing many years ago. One is the death of my granny and the other are magical invisible boots I used to sell on ebay called J-boots. The boots made your metame run fast within the medium of Everquest. I noticed an emerging shadow market of the already shadowy economy within the game Everquest, and I thought I would take a crack at finding an area to exploit that I could dominate in. There were too many sellers already so I had to get very specific and sell one particular item. I chose the J-boot because everyone had to have them, and the major sellers were not bothering to sell it due to its complicated delivery procedure. So in a fairly short period of time I had amassed a decent amount of money from death and magic virtual boots. I then decided to take that money and push it into the markets. I knew nothing about stock markets, and the year I made my first trade was 2001. Both bad and good timing. Lost more than I would have if I had started in a more prosperous time but learned a lot in the process.
“How often do you trade? Daily? Weekly? Or less frequently?”
It depends on the market behavior. For me the market has two modes of operation. Unsafe and slightly more unsafe.
When the market is plain old unsafe, I will swing trade with hold times of a few days to a few weeks, to possibly but very infrequently, a few years.
If the market is even more unsafe I will day trade only with hold times of a few minutes to all day…. every once in a while I go overnight with something that has momentum.
“What is your investment style? Short-term? Long-term? Particular sector? Fundamental vs Technical?”
My trading style is illusion and momentum. Illusion is my basis for swing trading. Almost all value is an illusion, and I trade off people’s hopes as they relate to that illusion.
Momentum is for day trading, which is either behavioral in terms of pure price action or news driven. In the end the two blend together into a messy giant sundae, and I just try and get a few bites before it becomes a sloppy disaster.
“What are some of the main tools you use for trading the right stocks?”
Any decent real time screener that will print stocks as they make new high of the day will do. I prefer Trade Ideas Pro. I use Think Or Swim, and it is far and away the best trading platform, but sadly they were bought out by TD Ameritrade so I hope AT doesn’t destroy what is otherwise a beautiful product.I have a lot of other methods that are minor but do their part: message boards, a skype chat room that I am a part of, articles in any kind of magazine direct or abstract that might give a glimpse of future product or technology.
“What is the best and the worst trades you’ve had?”
Both of these trades happened in a period where I was purely reckless. It is an era I plan on resurrecting with one of my accounts because I miss the high stakes and high bets. I recently got a good chunk of money from selling a domain name so its free money that I am going to use for high risk trades. I made 37k on a BIDU trade in about 7 minutes. Relative to my portfolio size at the time it was a huge return. I used 4x margin. It was an absolute thrill watching the cash part of the trade go up in real time.
The worst was MGAM, which I held years ago on a trade based around an article and the words of the CEO on a conference call. It was also the most important trade I have ever made because its where I learned what a farce the stock market is. I lost 17k in MGAM over a 3 week period.
“What would be your advice to the investors out there?”
1. First thing to learn is how to take a loss. How do you react? If you fall apart and its on your mind 100% of the time, then quit or change investing styles. Once you learn to how to take a loss you are ready to try trading.
2. If you are 18 to 22 and considering becoming a financial professional you are making a huge mistake. The world is divided up between creators and destroyers and those in the financial world are nothing but destroyers, myself included. Luckily it is not my background nor does it consume 100% of my time. The other half of my life is spent trying to create things. I suggest you always keep something else in your back pocket if you choose to journey as a trader, something that matters to human beings.
3. There is little or no truth and little or no value. If the stock market were functioning properly, then stock prices woul
d not move very far and fast except in extreme cases and a public company would exist as an agreement between management and shareholders. All companies would pay dividends as soon as they achieved profit as a way of paying back those that financed their company. Sounds odd right? Thats how it should work but it doesn’t, so remember that all values are an illusion, and its your job to be a magician and make trades that profit off the best illusions.
4. Read Reminiscences of a Stock Operator. Its a great story and will make you feel like trading is akin to swashbuckling and piracy. It also lets you know who you are up against. Remember no one is on your side. Its you versus the world when you are trading for yourself. Don’t bother with any other financial books; just read novels, history, magazines, manga, cartoons, anything. Maybe check out Naseem Taleb, but his “luck” of finding a black swan makes him era specific, so his current books won’t be as useful in a few years. There is nothing worse than being a trader or a lawyer and going home only to talk about trading or the law. Fill your life with other things.
5. They always say don’t rely on luck, don’t hope, and use fact not intuition. I thrive on Luck, Hope, and Intuition, in fact I am hoping my intuition can find me a lucky trade tomorrow.