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Celebrating Minyanville's 10th Anniversary: Wall Street Selector Interviews Todd Harrison


In this one-on-one, Todd Harrison discusses his book, his trading psychology, and the US economy.

Todd Harrison: It was interesting heading into that fateful day where there had been numerous occasions when I would wake up at God's hour at three o'clock in the morning in a sweat. I would go to the bathroom to splash water on my face, thinking to myself this is no way to live your life. You know what's the social value here? They're going to put "he's a good trader" on my headstone? I think you have to ask yourself those questions, particularly when you get to a place where you thought you wanted to be your entire life.

I was 30 years old, making seven figures. I was president of a $400 million hedge fund, at the top of my game. Then you see what I saw on 9/11 and you really know it's a fight or flight mechanism. I was unaware that I was as emotionally damaged as I was. You know I didn't realize that until a few years afterwards. I think there are just probably a lot of people out there who are in denial about how 9/11 affected them. But I think, for my part, the single most predominant feeling was guilt for many years.

John Nyaradi: Yeah.

Todd Harrison: I felt guilty feeling bad when so many other people lost so much more and that guilt manifested in a lot of ways and I turned off. You know I went dark socially and professionally and then thankfully discovered the corridor that was Minyanville and that corridor was an animated world that was void of politics and pain and agendas, things that I just probably couldn't handle anymore.

You know I've always said, John, I've always said the definition of professional nirvana is to do what you love with people you respect while serving the greater good. I don't make the money I did once, far from it, but I'm very lucky to work with the people I do and The Ruby Peck Foundation and to be able to do out of love what you know is right and to help people make better decisions. To be able to get up in the morning and look yourself in the eye and like the person you see is something that I don't take for granted and something that hasn't been familiar for all that long.

John Nyaradi: That's great. I'd like to take a minute and talk about your big picture for the economy right now in the US.

Todd Harrison: It's an interesting juncture for the market right now. There are two sides here. The corporate credit market is suggesting that stocks go higher. In a vacuum, that in and of itself would be awesome. But unfortunately we don't live in a vacuum and you know we here at Minyanville see a debt sandwich, where you have the consumer debt below and the sovereign situation above.

I think that the risk has not mitigated since the financial crisis, I think it has just changed shape. It's amorphous. It has gone from the financial to the economic to the social sphere. And we talked about the two paths in the midst of the crisis; on one you have debt destruction and/or debt reorganization, and that's a bitter pill, for sure, but in my view that's the medicine that will cure the disease and lead us on the path towards legitimate globalization. And maybe the US is not out in front leading but certainly participating and so this globalization is most certainly attainable.

I look at it very much like the dot-com situation. Everything they said in the dot-com boom about what the Internet could be, proved true, but not without the technology crash first. I think everything that they say about globalization will prove true but not without debt destruction. So that's the path I think we ultimately have to take. But instead, we've been given drugs to mask the symptoms rather than medicine that cure the disease. We'd been giving the drunk another drink with hopes that he doesn't sober up.

John Nyaradi: Yeah.
No positions in stocks mentioned.

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